Real Estate Litigation 2025 Comparisons

Swiss tenancy law provides that the tenant must permit the landlord to access and inspect the premises to the extent necessary for maintenance, sale or future leasing. The tenant is further obliged to tolerate any works required to remedy defects or to carry out repairs or measures necessary to prevent damage. The landlord must, however, notify the tenant of any intended inspections or works in a timely manner and must duly consider the tenant’s interests in the scheduling and execution of such activities.

In addition to inspections and repair works, the landlord may also be entitled to access the premises to carry out renovations or modifications, provided such access is reasonable for the tenant and the lease has not been terminated. Should the tenant unjustifiably refuse access, the landlord may petition the competent court to compel the tenant to tolerate the inspection or the execution of the works. In the event of non-compliance with a court order, the judge may impose criminal sanctions, fines or coercive enforcement measures through the police or public force.

An unjustified refusal to grant access also constitutes a breach of contract and may entitle the landlord to claim damages. In cases of persistent failure to grant access, the landlord may also have the right to terminate the lease contract.

In the event of an emergency, the landlord may request the issuance of provisional injunctive relief or interim measures of protection. These proceedings are expedited but limited in effect, serving primarily to protect the leased premises against imminent damage or risk when there is no time to wait for the outcome of an ordinary procedure. Such actions are often combined with enforcement measures – eg, the intervention of the police or public force. In cases of particular urgency, the court may issue ex parte relief without prior hearing of the tenant.

In situations of extreme urgency where legal recourse is not sufficiently swift and any delay would result in serious risk or damage, the landlord may enter the premises without the tenant’s consent, provided such entry is justified under the doctrine of necessity. However, such action must be exercised with caution. A landlord who enters the premises without (or against) the tenant’s consent and outside the legal grounds risks criminal liability for unlawful entry into private premises.

The tenant must show due consideration for other tenants of the building and neighbours, and must in particular refrain from any conduct that interferes with other tenants’ lawful use and enjoyment of their premises.

Neighbours whose use of their units is unlawfully impeded may be entitled to initiate legal proceedings against the failing tenant, seeking injunctive relief or interim measures of protection to compel cessation of the impairment and/or compensation for damages suffered.

As the landlord is contractually liable for both material and legal defects affecting the leased premises, it is common for affected tenants to direct their complaints to the landlord, asserting their contractual rights – such as rent reduction, deposit, or other remedies – based on the impairment. In such cases, the landlord will take appropriate action against the defaulting tenant in order to recover any losses incurred.

The landlord is under a legal and contractual obligation to make the leased premises available to the tenant and to maintain them in a condition suitable for their contractually designated use. A leased object is deemed defective if it lacks characteristics expressly promised by the landlord, or if it fails to meet features that the tenant could reasonably expect from an objective standpoint, taking into account the designated use of the premises.

If the landlord frustrates or impedes the tenant’s use of the premises, such conduct may, under certain circumstances, be qualified as a defect within the meaning of Swiss tenancy law. In such cases, the tenant may invoke the legal remedies available under tenancy law in respect of defects (Article 259 et seqq of the Swiss Code of Obligations (CO)), including the right to:

• request rectification of the defect (eg, cessation of harassment);
• demand a reduction of the rent;
• claim damages;
• require the landlord to assume responsibility for litigation against third parties; and
• deposit rent with the competent authority instead of paying it directly to the landlord.

If the landlord does not cease the harassment and their behaviour qualifies as lease defect, the tenant is also generally entitled to terminate the lease contract.

Depending on the nature and severity of the harassment, additional legal remedies may be available under Swiss general contract law, the provisions of the Swiss Civil Code governing the protection of personality rights and the Swiss Criminal Code (CC).

The legal classification of a residential rental unit – eg, as a rent-controlled unit – does not, in itself, affect the tenant’s right to seek remedies against a landlord who interferes with their lawful use and enjoyment of the premises.

Under Swiss law, no administrative agency or regulatory body is vested with the authority to make determinations regarding allegations of landlord harassment. Such matters fall within the jurisdiction of the competent civil or criminal courts in the context of formal legal proceedings.

With the exception of state-subsidised housing according to Article 253b, paragraph 3 CO, rent in Switzerland is not subject to any form of official or judicial approval. In principle, the contracting parties are free to agree upon the amount of rent, provided that it does not constitute an unfair rent within the meaning of Article 269 et seqq CO.

State-subsidised housing refers to residential property supported by public funding within the framework of housing and real estate assistance measures – such as subsidy programmes, initiatives for housing promotion in mountainous regions or broader social housing schemes whose rental pricing is subject to control by the relevant public authorities. 

Depending on whether the housing project is promoted at the federal, cantonal or municipal level, regulatory differences may apply. In principle, however, the provisions of Swiss tenancy law also govern rent-controlled tenancies, including their renewal, which is subject to the same legal framework as that for non-subsidised leases.

Rent-controlled housing is subject to different regulatory frameworks at the federal, cantonal and municipal levels. The removal of such units from rent control and their conversion to market-based conditions is governed by the applicable legal provisions, which may for example require the reimbursement of public subsidies granted for the implementation of the subsidised housing project.

Subsidised housing projects may be implemented at the federal, cantonal, or municipal level and are governed by various legal and regulatory frameworks, depending on the competent jurisdiction. Rent control mechanisms may differ across these levels and may be entrusted either to the subsidising authority itself or to a designated body, such as an administrative court or the local conciliation authority.

Where the subsidies are granted under federal programmes, rental monitoring is carried out by the Federal Office for Housing (Bundesamt für Wohnungswesen) and, ultimately, by the Federal Administrative Court (Bundesverwaltungsgericht), pursuant to the Federal Act on the Promotion of Residential Construction and Home Ownership (Wohnbau- und Eigentumsförderungsgesetz, WEG) and the Federal Act on the Promotion of Rental Housing at Moderate Prices (Bundesgesetz über die Förderung von preisgünstigem Wohnraum, WFG).

In principle, both parties are obliged to fulfil their contractual obligations and to remedy any default within the period prescribed by law or stipulated in the agreement. Legal or contractual provisions may specify the curing period in case of breach or default. Where neither legal provisions nor the contract specify a cure period, the non-defaulting party must grant the defaulting party a reasonable period to cure, taking into account the nature and seriousness of the default, the level of urgency, the complexity of the remedial action required and all other relevant circumstances. As a general rule, the more serious the default, the shorter the cure period may be.

If the cure period granted is too short, the defaulting party is nonetheless required to initiate remedial action and must formally request an extension. The defaulting party may not simply disregard the request for cure. In the absence of any reaction, the cure period proposed by the non-defaulting party is deemed to have been accepted.

Under Swiss law, injunctive relief may be granted if the applicant shows credibly that:

• a right to which the applicant is entitled has been infringed or is imminently at risk of being infringed;
• the infringement is likely to cause harm that cannot easily be remedied (ie, there is a risk of irreparable harm);
• the applicant has, on a prima facie basis, legal grounds supporting the claim;
• the matter is urgent and does not permit the applicant to await the outcome of ordinary proceedings; and
• the relief sought is proportionate in light of the circumstances.

The injunctive relief may take any form suitable to prevent imminent harm, including but not limited to:

• an injunction;
• an order to remedy an unlawful situation;
• an order directed to a public register or a third party;
• specific performance; and
• payment of a sum of money, where provided for by law.

The procedure for obtaining injunctive relief is of a summary and expedited nature. In cases of particular urgency – especially where there is a risk that enforcement of the measure could otherwise be thwarted – the court may order the interim measure ex parte (ie, without prior hearing of the opposing party). However, before issuing ex parte measures, the court may, ex officio, require the applicant to provide appropriate security.

If the tenant fails to remedy the default within the period granted by the landlord, and the notice of the landlord is justified, the latter is in principle entitled – depending on the nature of the breach and the specific contractual or statutory obligations violated – to terminate the lease, claim damages and/or undertake remedial measures at the tenant’s expense (eg, in the event of defects or maintenance failures). 

Failure to obtain an injunction within the cure period does not automatically imply acceptance of the landlord’s allegations or waiver of rights. However, if the landlord relies on the alleged default and subsequently terminates the lease for cause, the termination may become effective and enforceable, unless contested in due time (see 1.4.3 Landlord Bad Faith regarding the challenge of a termination). If the tenant did not react within the cure period, this could be interpreted (factually) as an implicit acknowledgement of the alleged default, unless clear evidence of good faith protest exists (eg, written objections).

In both residential and commercial tenancies, timing is of the essence. Courts generally expect a professional tenant to react promptly to unfounded cure notices or other unjustified demands. While injunctive relief is not always required to preserve the tenant’s rights, a timely and substantiated written objection is essential. Such protest serves to preserve the tenant’s legal position and mitigate the risk of adverse inferences, and may be decisive in contesting a potential termination based on the alleged default.

If a landlord repeatedly serves default notices or notices to cure in bad faith – ie, without valid grounds or with the intent to harass or pressure the tenant – the tenant may have several remedies available under Swiss law.

As a general principle, the manifest abuse of a right is not protected by law (Article 2, paragraph 2 CC). A pattern of repeated and unfounded notices may constitute such an abuse, particularly where it can be demonstrated that the landlord’s intent is to coerce the tenant into vacating the premises, to create a pretext for termination or otherwise to act in violation of the principle of good faith. This can be asserted as a defence in proceedings.

If the landlord’s behaviour becomes harassing or abusive, and particularly if it threatens to cause irreparable harm (eg, unjustified termination or reputational damage), the tenant may seek injunctive relief before the competent court to prohibit the landlord from issuing further unjustified notices (see 1.4.1. Injunctive Remedies for Tenants Facing Insufficient Cure Periods regarding the requirements of an injunctive relief).

If the landlord proceeds to terminate the lease contract in bad faith, for example based on a fabricated or exaggerated claim, the tenant may dispute the alleged default and challenge the termination. Pursuant to Article 271 CO, the tenant may request the landlord to state the reasons for termination and contest it if it is contrary to good faith. According to Article 271a CO, a termination is considered abusive in particular where it is given:

• because the tenant is asserting rights under the lease in good faith;
• with the aim of unilaterally amending the lease to the tenant’s detriment or increasing the rent;
• solely to induce the tenant to purchase the leased premises;
• during ongoing conciliation or court proceedings relating to the lease, unless such proceedings were initiated by the tenant in bad faith;
• within three years following conciliation or court proceedings in which the landlord (i) was largely unsuccessful, (ii) withdrew or substantially reduced their claim or action, (iii) declined to pursue the matter in court, or (iv) reached a settlement or compromise with the tenant; or
• due to changes in the tenant’s family circumstances that do not cause any significant disadvantage to the landlord.

In addition, if the landlord’s bad-faith conduct results in actual harm – such as legal costs and financial loss – the tenant may assert a claim for damages against the landlord based on contractual or tort liability.

Under Swiss tenancy law, only guarantees in cash or negotiable securities are expressly regulated, as set forth in Article 257e CO. The provision is of a statutory nature and may not be derogated from to the detriment of the tenant. Cash guarantees are most common for residential tenancies, while bank guarantees are most common for commercial tenancies.

Pursuant to Article 257e CO, where the landlord requires a guarantee in cash or negotiable securities, it must be deposited in a blocked bank savings or deposit account opened in the name of the tenant. In the case of residential tenancies, the amount of the guarantee in cash or negotiable securities may not exceed three months’ rent. No amount limitation applies in the context of commercial leases.

A guarantee deposited in accordance with Article 257e CO may only be released by the bank with the express consent of both parties or pursuant to a legally binding payment order or a final court decision. Upon the expiry of one year following the termination of the lease, the tenant may request the release of the security if no legal proceedings have been initiated by the landlord.

In accordance with the principle of contractual freedom, Swiss tenancy law does not exclude the use of other forms of personal or collateral guarantees, such as:

• promise of payment and bank guarantee (Bankgarantie);
• joint and several debt liability (Solidarhaftung and Schuldbeitritt);
• surety (Bürgschaft); and
• lien or mortgage (Pfandrecht).

However, pursuant to Article 257e, paragraph 4 CO, the cantons are authorised to enact supplementary provisions and, in particular, to subject such alternative forms of guarantees to the same statutory regime applicable to guarantees in cash or negotiable securities. As a result, the legal framework of guarantees in tenancy agreements may vary between cantons.

For the sake of completeness, reference is also made to the landlord’s special lien (Retentionsrecht) pursuant to Articles 268 et seqq CO. This constitutes a particular form of security right granted to the landlord of commercial premises over movable assets belonging to the tenant and located in the leased premises. If the tenant intends to vacate the premises or remove such assets, the landlord may, with the assistance of the competent authority, retain those objects necessary to secure his claims. The retained objects may be realised in order to satisfy the landlord’s outstanding claims. 

If a guarantee is provided in cash or negotiable securities and deposited with a bank account in accordance with Article 257e CO, as is typically the case in residential tenancies, the bank may not release the funds in favour of either party unless one of the scenarios referred to in 1.5.1 Types of Guarantees in Tenancies applies – namely, the mutual consent of both parties, a final payment order or enforceable court judgment, or the expiry of one year following termination of the lease without any legal action having been initiated by the landlord.

Where a guarantee is provided in another form – more common in commercial lease agreements – the guarantor is generally not entitled to revoke the guarantee prior to its agreed term without the landlord’s consent.

Should the lease agreement require the tenant to provide a guarantee and the tenant fails to do so or the guarantee is revoked, the landlord may be entitled to refuse delivery of the leased premises. If possession has already been transferred, the landlord may, depending on the circumstances, be entitled to terminate the lease or conduct legal action to obtain a security in accordance with the Swiss Debt Enforcement and Bankruptcy Law (Bundesgesetz über Schuldbetreibung und Konkurs). 

Each form of guarantee is governed by specific legal provisions and may require the creditor to conduct distinct enforcement procedures to recover.

In the case of cash or negotiable securities pursuant to Article 257e CO, no expedited recovery mechanism is available. The guarantee may be released to the landlord only in one of the situations outlined in section 1.5.1 Types of Guarantees in Tenancies – ie, upon mutual consent of the parties, based on a definitive payment order or an enforceable court decision, or following the lapse of one year after the termination of the lease without any legal proceedings having been initiated by the landlord.

Generally, no expedited recovery procedure is available for other forms of guarantees either. In the event of a dispute – whether by the tenant or by the guarantor – the landlord must assert his claims through ordinary legal and enforcement proceedings.

An exception applies to promises of payment and bank guarantees issued on first demand. In such cases, the issuing bank is obliged to honour the landlord’s claim without examining its merits, provided the conditions set out in the guarantee are met. Consequently, such instruments may offer a more expedited recovery mechanism compared to other types of guarantees. However, the enforceability and treatment of such guarantees may vary depending on whether the relevant canton has enacted supplementary legislation pursuant to Article 257e, paragraph 4 CO – such as subjecting first-demand guarantees to the same legal regime applicable to cash and negotiable securities guarantees (see 1.5.1 Types of Guarantees in Tenancies).

In the first step, a provisional receiver is appointed by the competent court. If, based on the provisional receiver’s findings, it becomes apparent that there is a prospect of restructuring, the competent court will appoint ex officio a receiver for a certain term. The process is governed by the Swiss Debt Enforcement and Bankruptcy Law.

Receiver is most likely to be sought/appointed when bankruptcy looms.

There are no specific requirements or special limitations on the bankruptcy of single-asset entities in Switzerland.

In case of bankruptcy of a debtor, the claims secured by mortgages have priority over non-secured claims – ie, the secured claims are paid in advance from the proceeds of the realisation of the pledged real estate. Mortgage-secured claims are classified according to ranks, and the proceeds are distributed according to ranks. In case mortgage-secured claims cannot be covered by the proceeds of the realisation of the pledged real estate, they are treated like non-secured claims and covered by the proceeds of the bankruptcy estate to the extent there are sufficient proceeds to cover all claims, which is usually not the case.

Enforcing an abstract and independent third-party guarantee is not generally affected by the bankruptcy of the debtor, and the creditor can in principle pursue the guarantor for payment even though the debtor filed for bankruptcy. Of course, the wording of the guarantee must be considered. An enforcement of the guarantee might not be possible to the extent that the guarantee has been provided as part of a scheme to carve liquid assets out of the bankrupt company to the detriment of the other creditors.