Should landlords be able to give notice more easily?

Voters will decide separately on two changes to tenancy law on November 24th. One of the voting proposals deals with the framework conditions for termination options by landlords if they need their residential or business premises themselves.

For a better understanding, some context on the applicable law is needed. In the case of open-ended rental agreements, ordinary terminations are generally possible at any time without any contractual provisions to the contrary. But under certain circumstances, tenants can successfully challenge a termination. According to the Federal Court, this applies if the termination violates good faith – for example in the case of terminations “purely for harassment”.

Special rules in case of urgency

The statutory minimum notice period is generally three months for residential premises and six months for business premises. Unless the contract states otherwise, different statutory or local termination dates apply in each canton. In the canton of Zurich, for example, these are March 31st and September 30th.

The landlord’s own needs are generally considered a valid reason for an ordinary termination. The current law also contains special provisions in three constellations if the landlord has “urgent” personal needs “for himself, close relatives or in-laws”. First: If the property is sold, the new owner can terminate the contract within the statutory notice period to the next legal (local) date – even if the rental agreement contains other provisions. However, the new owner is liable to the tenant for any damage resulting from this termination. This special provision is particularly important for rental agreements with a longer term, which often occurs with commercial premises.

Secondly: Normally, terminations during ongoing tenancy law proceedings between landlord and tenant are considered abusive. This also applies within three years of such a procedure being successful for the tenant. However, these grounds for challenge do not apply if the landlord has urgent personal needs. And thirdly: When tenants request to extend the rental period after termination, the responsible authorities must take into account the landlord’s own needs and their urgency.

The voting proposal only changes one point in this legal framework in the special provisions for the three constellations mentioned (change of ownership, termination in the context of tenancy law proceedings and requests to extend the rental period). In order to apply these special provisions, the landlord’s own needs no longer have to be “urgent”, but only “significant” and “current” – and this “when viewed objectively”.

This should make the hurdle for termination by the landlord a little lower. How much deeper would ultimately have to be decided by the courts. Within the framework of applicable law, the Federal Court has interpreted the term urgency as follows: In the event of a dispute, the landlord must prove that foregoing personal use of the rental property is unreasonable.

The origin of the voting proposal was a parliamentary initiative from 2018. This called for the procedures for dismissals due to urgent personal needs to be accelerated. According to the initiative’s justification at the time, if tenants make use of the legal remedies, legal procedures for termination due to urgent needs could extend over many months and even several years – this long duration is not compatible with urgent personal needs.

“Very rare, but staggering”

As an illustration, Monika Sommer from the homeowners association refers to “a court decision in a case in which an older couple had to wait several years before they could move into their own apartment.” However, the voting proposal will hardly prevent such cases, as Sommer admits: “The homeowners’ association is only moderately satisfied with this revision of the law, because the revision does not change the lengthy legal proceedings if the tenant takes advantage of the entire appeal process.”

Sommer has been a member of the Zurich district arbitration board as a landlord representative for twenty years. How often do problem cases arise in connection with urgent personal needs? “Such problem cases are very rare, but shocking for those affected.”

“Maybe 30 to 40 cases”

The tenant side identifies problems from the opposite perspective – where the landlord’s alleged own needs are for the purpose of renting the apartment to a new tenant at a higher price or to throw out an unloved tenant. Lawyer Sarah Brutschin says she has seen a few dozen cases with suspected revenge terminations. As a tenant representative, she has been a member of the arbitration board of the Canton of Basel-Landschaft for 24 years. By revenge termination she means that the landlord terminates the contract during or shortly after a dispute over tenancy law with the tenant under the pretext of urgent personal needs.

In general, Brutschin says he has seen “perhaps around 30 to 40 cases” over the last 25 years in which the apartment was rented out again after pretending to have personal needs. If such behavior comes to light and a court has already decided that the termination for personal use is not abusive, the former tenant can do little, according to legal analyses. According to a Federal Court ruling, claims for damages are also unlikely to be successful in such cases.

Mini audit

According to the tenants’ association, the voting proposal would make it even easier for landlords to abuse their property with pretextual personal needs. “The revision of the law does not change the framework conditions for ordinary terminations due to personal use,” says Monika Sommer from the homeowners association: “This is only about the possibility of an extraordinary termination due to urgent (new: significant/current) personal needs.” And: “I have never seen or heard of a case in which a landlord’s urgent personal needs were recognized and the landlord then did not move into his apartment.”

But what would the presented mini-revision really change? A parliamentarian and lawyer from the yes camp illustrates the difference between “urgent” and “current/important” with an image from medicine: In the event of a heart attack, there is an urgent need; if there is a feeling of pressure in the chest, the need is current/important.

But which type of termination, which was not accepted in previous case law, would now be permitted with the revision of the law? Monika Sommer gives an example to illustrate this: if the landlord were to suffer financial damage without moving into his apartment, which would be reasonable.