Converting on your own can backfire
Tenants often want to customize their commercial spaces themselves to suit their needs. But be careful: Without the landlord’s written consent, this can end up costing you dearly. By Patrick Strub, lic. iur., attorney, lawyer, and editor at the Beobachter Advisory Center.
According to the law, the tenant must return the property in the condition that results from its contractual use. But does contractual use also include structural alterations? Unless otherwise contractually agreed, the answer is no. However, commercial tenants in particular are often dependent on the fact that they can not only determine the furnishings, but also install, extend or convert them themselves. Without the landlord's consent, the landlord can demand that the property be restored to its original condition at the end of the tenancy - or, in extreme cases, during the tenancy. Tenants should therefore obtain the landlord's consent in advance - i.e. before signing the contract if necessary - and in writing! This is not only important for reasons of proof: the law expressly stipulates that only the written consent of the landlord is binding. Tenants may only leave their changes in place at the end of the tenancy if they have this consent. In addition, % then entitles them to compensation for added value if the investment has not been fully amortized by the time they move out.
The amount of added value is naturally a matter of dispute. It is therefore best to draw up the landlord's consent in the form of a contract signed by both parties, which also anticipates the calculation of the compensation. For example, it can stipulate that the compensation for the approved tenant investments - based on an average service life of 20 years - will be reduced by five percent each year.
It is dangerous to simply trust that a subsequent tenant will take over the investment instead of obtaining the landlord's consent. Whether and how much they will be willing to pay is still up in the air. Above all, however, even if the existing and new tenants agree, the landlord can demand that the changes be reversed if he has not approved them.
There are only two exceptional cases in which the landlord has nothing to say. Firstly: A replacement tenant takes over the existing tenancy agreement outside of the contract. However, he has no right to actually enter into the contract. If the landlord does not want to accept him, even though he would be reasonable and solvent, the previous tenant does not have to pay any more rent. However, the landlord does not have to compensate for the unapproved changes and can even demand that they be reversed. Secondly, business tenants can transfer the tenancy to a third party - the landlord may only refuse this for an "important reason". After the transfer, the previous tenant is jointly and severally liable with the new tenant until the next possible termination date, for a maximum of two years. With this transfer, the tenancy is transferred one-to-one to the new tenant. The landlord can therefore only demand that the alterations be removed when the new tenant moves out. However, trusting that you will find a successor with whom you can reach an agreement is risky - only the landlord's consent provides absolute security.
Book tip
Tenancy law Relocation, costs, termination - everything tenants need to know 256 pages, Fr. 34.- 7th, expanded and updated edition, 2010 ISBN 978 3 85569 429 7 Beobachter-Buchverlag.
Do you need legal advice? The Beobachter Advisory Center offers you and your employees expert advice by telephone on legal issues relating to your company - 6 months for only CHF 99. Order the consulting package for SMEs at www.beobachter.ch/kmu or 0800 83 0800.
