In Switzerland, rental relationships are governed by a strict legal framework that meticulously defines the rights and obligations of landlords and tenants. Among these provisions, those concerning subletting and lease assignment occupy a special place in the Swiss Code of Obligations. These legal mechanisms enable the principal tenant to temporarily or permanently transfer his or her occupancy rights to a third party, subject to various conditions. The practice of subletting has intensified in recent years due to increased professional mobility and pressure on the real estate market in urban centers such as Geneva, Zurich and Lausanne. Faced with this reality, Swiss courts have developed a nuanced body of case law that attempts to balance the sometimes divergent interests of lessors, principal lessees and sub-tenants.
Swiss law deals mainly with subletting in article 262 of the Swiss Code of Obligations (CO). This provision forms the fundamental basis for relations between the lessor, the principal lessee and the sublessee. According to this text, the tenant may sublet all or part of the leased property with the consent of the lessor. However, this consent is not discretionary, as the lessor can only withhold his agreement in three specific situations.
Firstly, if the tenant refuses to disclose the terms of the sublease. The landlord is entitled to know the identity of the sub-tenant, the intended duration of the sublease and the financial terms of the sublease. Secondly, if the conditions of the sublease are abusive in relation to the main lease. This includes cases where the main tenant seeks to make an excessive profit by setting a sublease rent significantly higher than the main rent. Thirdly, if the sublease presents major inconveniences for the lessor, such as a significant change in the use of the premises or concrete risks of deterioration.
In its case law (ATF 134 III 446), the Swiss Federal Supreme Court has specified that the landlord must justify his refusal explicitly on one of the three legal grounds. A refusal that is not justified or is based on other criteria is considered abusive. Furthermore, the lessor’s consent may be tacit if he is informed of the sublease and does not object within a reasonable period, generally set at 30 days by case law.
It should be emphasized that subletting does not alter the original contractual relationship. The principal lessee remains the sole contracting party with the lessor, and continues to assume all obligations arising from the principal lease. In particular, he remains liable for payment of rent and charges, as well as for any damage caused by the subtenant. This liability continues even if the subtenant fails to meet its own obligations to the principal tenant.
At the same time, a separate legal relationship is created between the main tenant and the subtenant. This sublease is itself subject to the provisions of tenancy law, with a few special features. For example, the duration of the sublease cannot exceed that of the main lease, and termination of the main lease automatically entails termination of the sublease, without the subtenant being able to claim any protection against dismissal.
Requests for authorization to sublet must follow a formal procedure to guarantee their legal validity. Although the law does not prescribe any particular form, it is advisable to proceed in writing, ideally by registered mail, so as to retain proof of the process. The request must contain several elements:
The lessor then has a reasonable period in which to respond. Failure to respond within this period may be interpreted as tacit consent, according to the case law of the Swiss Federal Supreme Court. If the landlord refuses consent, the tenant may contest this refusal before the competent conciliation authority within 30 days. The burden of proof then lies with the landlord, who must demonstrate that his refusal is justified on one of the three legal grounds.
Subletting in Switzerland is governed by a number of conditions designed to protect the interests of all parties concerned. These limits relate to the duration of the lease, the rent charged and the use of the sublet premises.
As far as duration is concerned, subletting is generally conceived as a temporary solution. While case law has not set a precise time limit, the Swiss Federal Supreme Court considers that a long-term or even indefinite sublease may constitute a valid reason for the lessor to refuse. In a landmark decision (ATF 138 III 59), the Federal Court ruled that a two-year sublease was already considered long. However, each situation is assessed on its own merits. A tenant leaving temporarily abroad for professional reasons could justify a longer sublease than a tenant simply wishing to reduce his financial burden.
As for the sublease rent, it must not be excessive in relation to the main rent. Case law generally allows a 10% to 20% mark-up to compensate for the additional risks assumed by the main tenant and the provision of furniture. Any significant overrun of this margin may be considered abusive and justify a refusal by the lessor. The Swiss Federal Supreme Court has specified that the lessee must not seek to make a commercial profit by subletting. If the sublease is deemed abusive, the subtenant can contest it before the conciliation authority and request a reduction.
Theuse of the premises is another important limitation. The sub-tenant must respect the use stipulated in the main lease. Transforming a dwelling into commercial premises, or vice versa, would justify a refusal by the lessor. Similarly, a use that is likely to cause abnormal wear and tear on the premises or nuisance to the neighborhood may be legitimately refused.
One aspect that is often overlooked concerns rental guarantees. The main tenant can demand a guarantee from the sub-tenant, separate from that which he himself has paid to the landlord. This guarantee must comply with the same legal limits, i.e. a maximum of three months’ rent for residential premises, and must be deposited in a blocked bank account in the subtenant’s name.
The complexity of subletting lies in the articulation of responsibilities between the three parties involved:
This configuration sometimes creates tricky situations. For example, if the sub-tenant causes damage to the building, the main tenant is liable to the lessor, even if he or she can then take action against the sub-tenant. Similarly, if the landlord terminates the main lease for non-payment of rent, the sub-tenant may find himself deprived of housing through no fault of his own, with only an action for damages against the main tenant as recourse.
Lease assignment represents an alternative to subleasing, and is governed by a distinct legal regime, defined principally by article 263 of the Swiss Code of Obligations. Unlike subletting, which creates a triangular relationship, lease assignment involves a genuine transfer of the lease’s rights and obligations. The assignee (new lessee) fully replaces the assignor (original lessee) in the contractual relationship with the lessor.
This fundamental difference has several practical consequences. Firstly, the assignor is released from his obligations as soon as the assignment takes effect, unless otherwise stipulated. He is no longer responsible for payment of rent, nor for any damage caused to the property after the assignment. Secondly, the assignee acquires all rights under the original lease, including any renewal options or pre-emptive rights. Finally, the assignment is in principle definitive, whereas the sublease remains temporary.
To be valid, the assignment of a lease requires the written consent of the lessor. Unlike sub-letting, where the lessor can only withhold consent on specific grounds, the law does not limit the grounds for refusal in the case of assignment. The lessor therefore has greater latitude to oppose an assignment, although such refusal must not be abusive according to the general principles of Swiss law.
However, the case law of the Swiss Federal Supreme Court has introduced a number of nuances. In an important ruling (ATF 125 III 226), it held that the lessor could only refuse consent to the transfer of a commercial lease on objectively justified grounds, such as the insolvency of the transferee or his intention to use the premises for an activity incompatible with their intended purpose. However, this restriction does not apply with the same rigor to residential leases.
One particular aspect of assignment concerns the rental guarantee. In principle, the transferee must set up a new guarantee, while the transferor’s guarantee is returned. However, the parties may agree to maintain the existing guarantee, subject to the agreement of the depositary bank. In practice, this transfer of collateral is often complex and requires precise coordination between all parties.
The lease transfer procedure involves several formal steps:
The assignment takes effect on the date agreed between the parties, after obtaining the lessor’s consent. Unless otherwise specified, it becomes effective upon signature of the assignment agreement. An often overlooked aspect concerns individual meters (electricity, gas, water), which must be read and transferred to the relevant suppliers.
Unlike sub-letting, the assignment of a lease is not subject to the obligation to provide the assignee with a copy of the main lease. Nevertheless, we strongly recommend that you do so, to avoid subsequent disputes over the exact terms and conditions of the assigned lease.
The implementation of subleases or lease transfers frequently raises practical difficulties that the parties need to anticipate to avoid subsequent disputes.
When it comes to subletting, one of the most common problems is the inventory of fixtures. It is strongly recommended that a detailed inventory of fixtures be drawn up between the main tenant and the sub-tenant, separate from the one drawn up with the landlord. This document clarifies responsibilities in the event of damage occurring during the sublease period. Without this precaution, the main tenant runs the risk of being held responsible for any damage caused by the sub-tenant, without being able to prove it.
The question of service charges deserves particular attention. In a sublease contract, it is important to specify whether the rent includes charges, or whether these will be calculated separately. In the latter case, the contract must detail the method of calculation (monthly flat rate with annual adjustment, direct payment by the sub-tenant, etc.). For individual charges such as electricity or internet, a meter reading on the subtenant’s entry and exit will help avoid disputes.
The furniture made available to the subtenant is often a source of dispute. A precise inventory, accompanied if possible by photographs, must be appended to the sublease contract. This inventory should mention the condition of the items and their approximate value, to facilitate the assessment of any damage. Jurisprudence accepts that the presence of furniture justifies a reasonable increase in the sublease rent, generally between 10% and 20% depending on the quantity and quality of the goods made available.
For lease transfers, the practical difficulties mainly concern coordination between the three parties. The time of transfer must be clearly defined, as must the allocation of rent and charges for the month of transfer. In addition, the transferee must verify the existence of any rent or service charge arrears that may be claimed by the lessor after the transfer. Although the lessor cannot, in principle, refuse to reimburse the assignor’s guarantee for arrears incurred prior to the transfer, conflict situations can arise.
The emergence of short-term rental platforms such as Airbnb has considerably altered the subletting landscape in Switzerland. This practice raises specific legal questions that do not always find clear answers in current legislation.
From the point of view of tenancy law, the provision of accommodation on Airbnb does indeed constitute a sublease subject to the lessor’s prior authorization under article 262 CO. The Federal Court confirmed this characterization in a recent ruling (4A_451/2019), clarifying that even very short-term sublets, repeated with different subtenants, require the lessor’s consent.
Landlords can legitimately refuse this type of sublease for several reasons:
Some real estate authorities and landlords now include specific clauses in lease contracts explicitly prohibiting subletting via platforms such as Airbnb. These clauses are generally considered valid by Swiss courts.
The practice of subletting and lease assignment is undergoing significant changes in response to socio-economic transformations and tensions on the Swiss real estate market.
The shortage of housing in urban centers has a direct impact on these legal mechanisms. On the one hand, it encourages more tenants to sublet to ease their financial burden. On the other hand, it strengthens the position of landlords, who can be more demanding when examining requests for subletting or assignment. Faced with this situation, some cantonal authorities have developed more protective approaches towards tenants. In Geneva, for example, case law tends to interpret more strictly the grounds for refusal to sublet laid down in article 262 CO.
Increased professional mobility is another factor. More and more tenants are leaving their homes temporarily for assignments abroad or in other cantons, while still wishing to retain their long-term rental rights. This trend has led the courts to qualify their assessment of the acceptable duration of subletting. While a two-year sublease was traditionally considered long, some recent rulings admit longer periods when justified by legitimate professional circumstances.
Thecollaborative economy and new forms of shared living are also influencing the practice of subletting. In addition to Airbnb, other models are emerging, such as temporary collocation and home swaps. These practices don’t always fit neatly into the traditional legal categories of subletting or assignment. Some cantonal courts are beginning to develop specific case law for these cases, generally favoring a functional approach that examines the economic reality of the arrangement rather than its formal qualification.
On the legislative front, several initiatives aim to modernize the legal framework. Proposals to revise tenancy law have been tabled in Parliament, some of which aim to make sublease conditions more flexible in response to new lifestyles, while others seek to tighten controls on landlords in the face of observed abuses. Although no major reform has been achieved to date, these debates testify to the topicality of the issue.
The growing complexity of sublease and lease transfer situations often calls for specialized legal advice. A lawyer who is an expert in lease law can provide considerable added value on several levels:
Early intervention by a specialist can often avoid procedural or substantive errors that could compromise the validity of the transaction or generate costly litigation. This preventive approach is particularly relevant in atypical situations that do not correspond to the classic schemes provided for by legislation.
Faced with rapid changes in jurisprudence and rental practices, real estate law professionals must maintain a constant legal watch to offer advice adapted to the contemporary realities of the Swiss housing market. This expertise becomes an invaluable asset when navigating the intricacies of legislation which, while stable in its fundamental principles, has increasingly nuanced applications depending on the specificities of each case.
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