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Tax and Legal
Marco Schoch | Founding Partner
Zurich, August 7, 2022
Rent payments are firmly planned income for landlords. Therefore, as well as being frustrating, missing rent payments can cause significant financial harm. When tenants fail to pay their rent, many property owners suddenly face major challenges, such as paying mortgage interest out of their own pocket. Unfortunately, most landlords are faced with missing rent payments sooner or later. When this happens, it is vital to quickly take the right steps while acting in a legally compliant manner. In this article, we will provide a step-by-step guide on how to quickly remove tenants who are unwilling to pay their rent.
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We explain step by step how you should proceed if a tenant stops paying their rent. It takes about 3-4 months from sending a reminder with a threat of termination to eviction by the police.
According to Art. 257d CO, in order to give a notice of termination within 30 days, you must first send the tenant a reminder with a threat of termination. In this letter, the tenant is requested to pay the outstanding rent within 30 days; otherwise he/she will be given termination without notice.
The following points should be noted:
Only amounts due (including ancillary costs) should be claimed in formal reminders and listed in detail to avoid formal errors. Rent deposits or deferred rent should not be claimed.
Reminders and notices must be sent separately and in separate envelopes to both parties in the case of married couples or registered partnerships. Pay attention to details, such as the correct spelling of the tenant’s name, to prevent challenges.
If the tenant doesn’t comply with the 30-day payment period, the notice of termination can be given at the end of the month with at least 30 days’ notice.
The tenant may initiate conciliation proceedings and contest the termination. If the termination is contested in the legal petition without legally conclusive argumentation, you can choose not to attend the conciliation proceedings. If you do not appear or there is no settlement, the tenant will be issued a notice of action anyway.
If, at the handover date, the tenant is still in the house and refuses to leave, the next step is to apply for a judicial eviction. This is best done in summary proceedings (see form below). The application must be submitted in duplicate to the competent civil district court.
Form – Request in proceedings for legal protection in clear cases under Art. 257 CCP
Legal request:
Justification:
The tenant party has not left the flat despite termination without notice on xx.xx.xxxx.
Evidence:
The court sends out an order giving the other party 10 days to present evidence proving that the dismissal was unlawful. If no evidence is presented, or if the evidence given is rejected, the court orders the expulsion with a deadline of approximately 10 days.
After the decision, the court gives the tenant about 10 days to move out. The decision can still be appealed to the cantonal court within 10 days. Only after this period does the decision become legally binding.
A certificate of enforceability is required to enforce a police eviction, and it is recommended that this be obtained from the court where the eviction order was made after the appeal period has expired. If the tenant disregards the expulsion, the judgment can then be enforced promptly.
Suppose the tenant party is still in the flat after the expulsion deadline. The certificate of enforceability can then be sent with a signed application for police eviction to the Civil and Administrative Law Enforcement Agency by e-mail or post.
The owner must carry out the eviction itself. The police are present and only intervene if the tenants try to resist the eviction. The easiest approach is to change the locks, leave the tenant’s belongings in the property, and then file an eviction request. The tenants will then be asked to collect their belongings within approximately 2 weeks. If this does not happen, the items may be disposed of.
It is also important to note that after termination, the outstanding rent can be claimed through debt collection. The rent deposit also serves as security.
The statute of limitations for rent claims comes into effect if a landlord does not assert his claims against the tenant in due time.
In such cases, the tenant is no longer obliged to pay the outstanding amounts.
Article 127 of the Code of Obligations states that the general statute of limitations period is 10 years unless federal civil law dictates otherwise. However, Article 128 of the Code of Obligations reduces this period to 5 years for rent and leasehold interest.
Thus, tenants who have not paid their rent over a period of five years and have not been asked to pay by the landlord no longer have to pay those outstanding amounts.
The limitation period begins as soon as the rent is due, usually at the end of each month. However, depending on the canton or municipality, other due dates may apply or be stipulated in the contract.
Outstanding operating costs also become time-barred after 5 years. This period starts at the end of the respective billing period or after moving out of the flat.
For example, if a tenant receives a utility bill in October 2019 for the period from 1 May 2013 to 30 May 2014, they will not normally have to pay it as the landlord’s claim will be time-barred on 30 May 2019.
Some tenancy agreements stipulate deadlines within which operating costs must be settled. However, such clauses are mostly regulatory and not legal provisions, so the five-year limitation period also applies here.
The only exception is if the tenancy agreement explicitly stipulates that subsequent payments for operating costs are no longer owed if the statement is not received within the specified period.
If tenants mistakenly pay operating costs, they can reclaim them up to 10 years after payment. However, they must act within 12 months of becoming aware of the error.
Do you have questions about tenancy law? Then Nexova Treuhand would be happy to offer you a non-binding consultation appointment.