Tenancy law: raw construction rent
New buildings offer a wide range of possibilities—especially if they’re intended to house commercial spaces later on. A clothing store, a bank branch, a restaurant, or an advertising agency? The requirements for interior design vary greatly depending on the type of use. And no one knows better how to design these spaces than their future tenants. By Patrick Strub, lic. iur., attorney at law, who works as a legal counsel and editor at the Beobachter Advisory Center.
The tenant is entitled to an object that is fit for use - that's what tenancy law says. If, for example, the heating does not work properly, there is a defect. And as long as the landlord does not remedy a defect, even though he knows about it, the rental property is not fit for use without restrictions, and the tenant can demand a rent reduction.
But what applies if it is not yet clear what the rooms will be used for one day, because the tenants have to be found first? The law does not say a word about this special case. Thus, the legal practice had to find a way to satisfy the need for raw rent. Result:
The agreed use of the object includes the removal of the same - which means that it is already considered fit for use in the shell. What remains is the otherwise rather untypical yawning void of regulations in the law. This makes it particularly important in the case of a shell lease to draw up the lease agreement in as much detail as possible.
Zurich lawyer Carmen Wettstein regularly deals with unfinished building leases. She explains: "The contract must state that and what exactly the tenant is allowed to build out or convert. It's also important that the specific shell condition is precisely documented at the start of the lease - in writing or with photos - preferably as part of a takeover protocol at the start of the lease." The contract should also specify the parties' obligations as precisely as possible: For example, who has to obtain any official permits and who is responsible for the maintenance of the leasehold improvements - usually the tenants. The rent for the building shell should be more favorable than the rent for a fully equipped rental property. Otherwise, the landlord would be circumventing his obligation to hand over and maintain the premises in a usable condition.
"It is also important that future developments are already taken into account in the contract, as far as that is at all possible," says Wettstein. As an example, she cites the legal introduction of the smoking ban, which in individual cases led to problems between the parties when the tenants of catering establishments wanted to retrofit a fumoir - and had to rely on the landlord's consent.
The dismantling of the leasehold improvements at the end of the contract should also be anticipated in as much detail as possible. Because lease agreements often stipulate an obligation to dismantle or transfer the leasehold improvements without compensation, the tenant must calculate from the outset and insist on the longest possible term for the agreement. "In the case of a mere five-year contract, the tenant must be able to depreciate the investments over five years so that the investment pays off," says the expert. "And contracts without a minimum term are hardly ever an option."
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BOOK TIP
Tenants need to know
The practical handbook accompanies tenants from apartment hunting to moving out and shows how to proceed correctly in every situation. This creates the basis for a better relationship between tenants, landlords and neighbors. Numerous examples, tips and sample letters help - even in tricky cases.
256 pages, Fr. 34.- ,
7. Extended and
updated edition
2010, ISBN 978
385569 429 7,
Observer-
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