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PROPERTY LAW
Types of ownership
Single ownership (Alleineigentum, propriété individuelle)
• (Single) Ownership is defined as the right to use, receive the
benefits of, and dispose of a property in the most absolute
manner, subject only to a non-prohibited use.
• Any title, transfer or change in the ownership right in
immovable property must be registered in the local land
register (Grundbuch, registre foncier).
Co-ownership (Miteigentum, copropriété)
• Co-ownership is ownership by several persons of a share in a
property which is physically undivided but fractioned into co-
ownership units (Miteigentumsanteile, parts de copropriété).
• The division of the property is typically set-up and described
in regulations (Nutzungs – und Verwaltungsordnung,
règlement d’utilisation et d’administration).
• Co-owners have a pre-emption right in case of sale of another
co-ownership share (Vorkaufsrecht, droit de préemption).
• The co-owners have the right to demand the end of the
co-ownership through the sale of the property or physical
division; the right may be suspended by mutual agreement of
the co-owners for up to 50 years but cannot be fully waived.
Condominium property (Stockwerkeigentum, propriété
par étages)
• Condominium property is a special type of co-ownership,
assigning each co-owner a co-ownership interest in the
entire property and a right to use a part of the property (unit)
exclusively.
• The division of the property is set-up in a deed of constitution
(Begründungsakt, acte constitutif) and described in
regulations (Stockwerkeigentümerreglement, règlement de
propriété par étages) which identify each unit, indicate its
location and include a complete description of the private and
common areas.
• Each co-owner has a right to use the common areas and
shares the related service charges.
Building right (Baurecht, droit de superficie)
• A building right is an easement on immovable property
entitling a third party (Baurechtnehmer, bénéficiaire du droit
de superficie) to erect or maintain a construction above or
below ground (usually against payment of a rent).
• The third party entitled to a building right enjoys a right in rem
which may be mortgaged.
• The maximum term is 100 years.
• The owner of the underlying property has a pre-emption right
(Vorkaufsrecht, droit de préemption) in case of the sale of the
building right and the owner of the building right has a pre-
emption right in case of the sale of the underlying property.
Rights affecting ownership
Easement (Dienstbarkeit, servitude)
• An easement is a burden imposed upon a property,
allowing a specific use by the owner of another property
(Grunddienstbarkeit, servitude foncière) or by a certain
person (Personaldienstbarkeit, servitude personnelle).
• Easements are transferred with the related property.
Charge on Immovable Property (Grundpfand,
gage immobilier)
• Charges are transferred with the related property.
• There are two forms: Mortgage certificate (Schuldbrief,cédule
hypothécaire) is the most common way to secure a debt
by a charge on immovable property today. Mortgage
(Grundpfandverschreibung, gage immobilier) is rather
uncommon nowadays and not further discussed hereinafter.
• A Mortgage Certificate creates a personal debt secured by a
charge on immovable property.
• The creation of more than one Mortgage Certificate over the
same property is possible.
• A Mortgage certificate is created in a specific amount and
specific rank and entitles the creditor in an event of default
on the part of the debtor to be paid out of the proceeds of the
sale of the property.
• Any agreement stipulating that the property subject to the
charge will become the property of the creditor in the event of
default on the part of the debtor is invalid.
• Three forms of Mortgage Certificates exist: two with physical
certificate (Papier-Schuldbrief, cédule hypothécaire sur
papier), issued on a specific name (Namenschuldbrief,
cédule hypothécaire nominative) or to the bearer
(Inhaberschuldbrief, cédule hypothécaire au porteur) and
one without physical certificate by mere registration in the
land register (Register-Schuldbrief, cédule hypothécaire de
register).
Pre-emption right
• A pre-emption right is an option to acquire a property in
case of a sale at a fixed price or at the price agreed with the
acquirer, i.e. the right to substitute the acquirer in a real estate
transfer.
• The most relevant types are:
–– the statutory pre-emption rights of co-owners and the
parties of a building right;
–– contractually agreed pre-emptive rights (for example in
favour of a tenant or neighbour);
–– statutory pre-emption rights by certain cantons or
communes for residential properties (for example in
Geneva).
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Investors Guide to Europe 2015