It sometimes happens that a person wishes to transfer their commercial lease to a third party for various reasons, such as retirement, a change in activity, or financial difficulties. Legally, this situation is referred to as a commercial lease transfer (Art. 263 CO).
A commercial lease is a lease contract for premises intended not for residential use but for carrying out a professional activity (e.g., offices, a shop, a restaurant, a workshop, etc.).
A commercial lease is typically concluded for a long term (5 or 10 years), but it is not uncommon for the tenant to wish to relinquish their lease before its expiration. They then have three options: subletting (Art. 262 CO), early termination (Art. 264 CO), or lease transfer (Art. 263 CO).
Art. 263 para. 1 CO stipulates that “the tenant of a commercial property may transfer their lease to a third party with the written consent of the landlord.” This means that for the lease transfer to be valid, three main conditions must be met.
Firstly, there must be a valid contract between the landlord and the tenant. The Federal Supreme Court has clarified in its case law that this condition is presumed (TF 4P.309/2005, c.8.1).
Secondly, the lease transfer requires an agreement between the tenant and the third party regarding the takeover of the commercial lease. The third party must agree to take over the lease as it was concluded between the landlord and the tenant (including the rent).
Thirdly, the landlord must give written consent to the lease transfer. Determining whether the landlord actually consents to the transfer is crucial, as it helps differentiate cases of transfer from cases of a new lease agreement. This is why the law requires written consent, facilitating evidence of consent. Therefore, if the written form for the landlord’s consent is not respected, the transfer is generally not valid. However, case law recognizes that in restrictive cases, the landlord may abuse their rights by invoking the lack of written form if they had given their consent orally or through actions (TF 4A_290/2015, c.3.2).
According to doctrine, upon receiving the request for transfer, the landlord has about four weeks to make a decision. The landlord has the right to inquire from the tenant about all necessary information regarding the third party in order to make their decision. Except in cases of defects in consent (Art. 23 et seq. CO), the landlord cannot withdraw their consent once given.
Art. 263 para. 2 CO states that “the landlord can only refuse their consent for justifiable reasons.” The concept of justifiable reasons must be examined on a case-by-case basis in light of all circumstances. Justifiable reasons can include both objective reasons related to the lease and reasons related to the individuals themselves.
In case law, the following have been considered justifiable reasons:
The candidate to take over the lease is insolvent.
The candidate is not insolvent but is unlikely to be able to pay the rent, which is too high for them.
The candidate has questionable morals, wishes to engage in illegal activities or activities contrary to public morals.
The candidate does not have the necessary official permits to operate their business.
The candidate wishes to undertake activities that would compete with other tenants in the building or with the landlord themselves.
Art. 263 para. 3 CO addresses the effects of the lease transfer and states that “if the landlord gives their consent, the third party is subrogated to the tenant.” This means that once the landlord consents to the transfer, the third party becomes the sole holder of the rights and obligations under the lease. They thus replace the original tenant in the initial lease agreement.
However, Art. 263 para. 4 CO provides an exception to the full subrogation of the third party, stating that the original tenant “is still jointly liable with the third party until the expiration of the lease term or its termination according to the contract or the law but, in any case, for up to two years.” In other words, from the date the landlord consents to the transfer, a two-year period begins during which the former and new tenants are jointly liable for all contractual obligations arising from the lease. This joint liability can end before the two-year period if the lease expires or is terminated earlier.
If you need further information or support, please do not hesitate to contact the Valentin Legal Consultation (021 351 30 00 or www.cjdv.ch) so that we can assist you with your needs.
Author: Caroline Bachelard
Comments