Business rent and COVID-19
Short answer: This question has not yet been conclusively clarified in legal terms. Please read the following comments [as of 25 March 2020].
Legal assessment by the Tenants' and Homeowners' Association of Switzerland
The Tenants' Association of Switzerland clearly regards the current ban on operation as a rental defect within the meaning of Art. 258 of the Swiss Code of Obligations. It is important to know that a rental defect must be reported to the landlord. In addition, a requested rent reduction does not exempt the landlord from paying the rent. Otherwise you risk termination.
HEV Switzerland does not share this view. It argues that the official measures do not constitute a defect in the rental property, as the term defect must always refer to the specific property and the specific contract, which would not be the case with the ordered operating ban.
"As the legal situation is still unclear at the moment, it is advisable to talk to the landlord."
Our legal assessment
In our view, a defect can certainly be legally justified on the basis of the measures ordered by the authorities. A defect is any deviation of the condition of the leased property from the condition owed under the contract which impairs the agreed purpose of the contract. A lease contract for a business premises will usually include the contractual purpose explicitly in the text of the contract, namely the granting of space for business purposes. If the agreed contractual purpose as mentioned above can no longer be fulfilled, it must be a defect according to the definition. The landlord must be notified in writing of the defect (up to 100%) and at the same time a request must be made for a reduction in rent. The problem here is that the landlord has no power to remove the defect. He cannot remove the defect himself, but he is liable for the defects in the rented property regardless of fault.
A further starting point would be to treat the officially ordered closure of the business as a case of application of a partial impossibility through no fault of the landlord. Since the rent is a continuing obligation, the officially ordered ban causes a temporary impossibility of the landlord to fulfil the contract, for which he is not responsible. As a consequence, the tenancy can be continued, e.g. by adjusting the remuneration (amendment of the contract). If the tenant no longer wishes to continue the tenancy because it is unreasonable for him, he can terminate the tenancy extraordinarily on the basis of Art. 266g CO.
The question of whether the rent is still owed has currently not been clarified either by the authorities or by case law. It is therefore highly recommended to start discussions with the landlord at an early stage and to seek a joint solution.
Taskforce to clarify the issues in tenancy law
On 24 March 2020, Federal Councillor Parmelin convened a round table to seek solutions to the unresolved tenancy law issues. There are still many unresolved issues, which is why a task force consisting of various landlord and tenant organisations will be set up with immediate effect. What is certain is that a flood of court cases would like to be avoided. It is therefore to be expected that many tenancy law issues will be clarified in the near future. We will keep you informed here about the latest developments.
This article was written by Rebecca Isenegger, lawyer.
Arife Asipi will be happy to answer any questions you may have on this topic.