1. Promise to contract

It is a preliminary agreement whereby persons, on their own behalf or that of a company, undertake to sign a future main contract for which they specify all the main points. When the future main contract is signed in the presence of the notary - as in the case of a property sale - the promise should also be so signed.

In the promise to sell, the seller undertakes to sign a sales contract whereby he or she transfers ownership of a property to the buyer in exchange for payment of an agreed-upon price by the latter.

2. Sale

The sale is a contract whereby the seller undertakes to transfer ownership of a property in exchange of payment of a price by the buyer who can buy it either for him or herself or as a company. When it involves a building, the sales agreement should be authenticated. This is a typical deed authenticated by a notary. Within the framework of sales and acquisitions, the issue of environmental audits is increasingly important.

3. Exchange

Il arrive parfois que des parties procèdent à un échange immobilier; pour cela, il est nécessaire de faire appel aux services d'un notaire. If the properties exchanged are located in different cantons, the authenticated deed will be drafted in close partnership between the swisNot notaries of the relevant cantons.

4. Emption or pre-emption agreement

Right of emption is the right to buy a piece of property at an agreed-upon price during a certain period, agreed by the owner to another person. This person therefore has the right but not the obligation to buy. The owner on the other hand is obliged to sell. This right, set out in an authenticated deed, can be filed on the land register. Very similar to right of emption is the right of pre-emption. This is the right of preference agreed by the owner to another person to buy a property but only if the owner decided to sell the property. The price and terms of sale should be set out in the agreement, in which case it should be confirmed by an authenticated deed. This right may also be recorded in the land register.

5. Public or private auctions (through tenders)

Some customers choose to sell their property - whether real property or otherwise - at auction. In this case, it is useful to consult the notary, independent of the form of the deeds to be drafted.

6. Encumbrances on real property

To finance the purchase of a property through foreign funds, the buyer can take out a mortgage with a bank or insurance company. To secure the loan, the property is burdened with a charge, in general a mortgage note. The notary is asked to draft a lien contract establishing a mortgage note or increasing an existing mortgage note. This document includes the debt (the mortgage) secured by a lien or other encumbrance on real property and allows use of the value of the property.

7. Easements (in particular usufruct, residential rights) and rent charges

Frequently, an owner of property transfers its ownership to his or her children, while keeping usufruct - i.e. the capacity to continue to live in the property or lease it and receive rent - or a residential right. These operations, often occurring within the inheritance schedule, require the cooperation of the notary who drafts the authenticated deeds and files them on the land register. Moreover, it may be necessary to confirm obligations by creating rental charges also filed on the land register.

8. Constitution of separate and permanent surface rights

Surface right is a right whereby the ownership of the site is separated from the constructions built on it (or below it). If it can be transferred and for a certain period of time, surface right may be filed on the land register as a separate and permanent right with the help of the notary who draws up the necessary deeds for this purpose. It may then be mortgaged.

9. Creation of a condominium (PPE)

The condominium system is a form of co-ownership whereby the owners of the floors of a building own rights relating to "communal parts" as well as and above all the exclusive rights of one or several floor units (e.g. an apartment). The creation of a condominium requires an authenticated deed which should be filed on the land register. Your notary is perfectly qualified to advise you in this area.

10. Rural property law

The aim of the Rural property Act (LDFR) is to maintain farming structures. Any land located outside a building zone and a surface equal to or above 2,500 sq m can only be sold after approval by the Canton's Property Authority (Autorité Foncière Cantonale). The notary, as well as drafting and executing the necessary authenticated deeds, applies to the competent authority in compliance with the relevant Act. Generally speaking, the buyer should be a farmer and the property not over-priced. Provisions concerning farms are also set out (ban on material division) as are provisions concerning the division of farm buildings (ban on fractioning). A building can also, in certain conditions, be excluded from the field of application of this Act if it has lost its farming purpose.

11. Collective ownership

When several people collectively own (jointly owned or co-ownership) buildings, located in one or several cantons, it is strongly recommended to call on the services of a notary, and of swisNot in particular, if these people wish to proceed with the division of buildings between themselves.

 

Environmental audits - acquisition (environmental due diligence)

Robert-Pascal FONTANET, notary in Geneva, and Philippe FRESARD, notary and lawyer in Berne

1. What is an environmental audit?

To determine the price of a piece of property or company, it is necessary to know its features and any defects it may have.

Among these defects, there is one - the risk of pollution - that has become significantly important, not only because it affects relations between parties but also because it is now governed by public regulations which are constantly developing and increasingly strict.

2. The legal bases

Although the major technical standards are American, this field is also covered by an ISO standard (ISO 14010: Guidelines for Environmental Auditing - General Principles) and various legislative documents, in particular:

- Federal Act dated 7th October 1983 on environmental protection, in particular major modifications applicable as of 1st November 2006 (LPE, RS 814.01),

- the Order dated 27th February 1991 on protection against major accidents (OPAM, RS 814.012),

- the Order dated 26th August 1998 on contaminated sites (OSites, RS 814.680).

3. A few issues to be examined

Here is a brief list of issues that you can discuss with an expert in this field, depending on whether the acquisition involves bare land, a building or a factory:

- pollution of the ground and subsoil, risks of environmental contamination,

- presence of asbestos and heavy or radioactive metals in the buildings,

- hydrological risks,

- respect for norms and the buildings' safety, hygiene, fire or seismic risk characteristics,

- waste and emissions by the installations.

To determine the breakdown of costs between the different parties in a possible (future) dispute, it may be necessary to ask the expert to date the pollution as well.

4. Frequent practical problems

The presence of asbestos should be checked in all buildings built before 1991, as this silicate mineral was often mixed with other materials in the past. Polluted land generates high extra excavation costs.

Furthermore, buried cisterns are frequently the cause of pollution as they start to leak as they get old.

The presence of special waste (e.g.: old neon lights, old lead paint) are a latent loss factor.

Finally, the risks linked to operation (non-compliancy of installations, risks of explosion) should be examined when purchasing a company.

5. Why audit an audit?

Just because a seller presents an audit to the buyer, the latter should not feel immediately reassured. On the contrary, an audit of the audit should be demanded. This would take into account, for example, the following factors:

- Which documents were supplied to the first auditor?
- Which samples were taken and which analyses made by the first auditor?
- What was the reasoning behind the conclusions?

6. How to go about it?

If you believe that an environmental audit is necessary, the first thing to do is clearly word the goals of the audit and the auditor's mission, not forgetting to enquire about any forthcoming legal changes which could modify the costs incumbent to you.

You should then provide the expert with the most exhaustive basic documentation possible.

This should define foreseeable risks and measures to be taken and their probable cost, within the framework of federal and cantonal - sometimes even communal - norms, applicable to the building or company.

Generally speaking, this type of audit takes somewhere between a week and a month. Considering the financial stakes, often involving hundreds of thousands and even millions of Swiss Francs, its cost is more than reasonable.

Do not hesitate to consult your notary, who may firstly help you to define the legal framework of this issue, then introduce you to a competent environmental expert.

Geneva and Berne, 9th January 2011

 

Owner in own right or as a company: advantages and disadvantages according to the intercantonal or international context

Robert-Pascal FONTANET, notary in Geneva, and Philippe FRÉSARD, notary and lawyer in Berne

There are two ways of owing a piece of property: either directly in your own name or through a legal person which you control. The first solution is simple, but is it always preferable? By adopting the second, you transform immovable property into movable properties in your estate: securities or shares in the company. If your home, company and building are all located in the same place, the consequences will probably not be major, at least not in Switzerland.

For tax-related matters, it is usually better to be the owner yourself than working through a legal person: that is why, with a certain number of tax advantages available, many estate management companies were liquidated between 1995 and 2003. However, the consequences can be quite the opposite, and spectacular, if the operation is on the international level.

In civil law

For property owners, civil law rules are determined by the location of the building. If you own a piece of property on the French Riviera, French law determines your freedom to designate your heirs and the formalities needed for the transfer or division of your property.

In Swiss law, it is possible to sign an inheritance agreement with your heirs and freely agree how the succession will be settled. You can therefore attribute your shares - therefore your property - to whoever you want, without risk of a challenge after your death. Inversely, such a procedure is very difficult under French law if you are the personal owner of a property.
In Swiss law again, it is possible to designate an executor who will have the capacity to sell your property, according to your instructions and according to his/her/its appreciation, even though your heirs do not all agree. Here again, French law does not offer this faculty in property law, if you leave an heir with a claim to your assets.

However, when the property is owned by a legal person in which you own shares, your succession is based on the latter and not on the property itself. These shares are movable goods, subject to law applicable in your place of residence, or, even better, to the one you will have chosen in your will, if you are a foreign national! You can thus have more flexibility than afforded by the civil law applicable in the location of the property.

And tax law?

Under these circumstances, the creation of a property company can prove to be extremely attractive in fiscal terms too.

Indeed, successions or donations to the spouse are no longer taxed in Switzerland and, in all cantons except Appenzell (AI), Neuchâtel and Vaud, there is no tax on descendants either. In the cantons of Soleure and Grisons, there is a low tax on the inheritance value. In addition, there are considerable rebates and these duties are very low in Switzerland in comparison with other countries.
In French fiscal law, for example, direct heirs pay 5 to 40% tax, even once rebates have been deducted! Since 22nd August 2007, the surviving spouse is exempt from paying tax.

We can also reveal that international agreements to avoid dual taxation on successions are not applied on donations. Caution is therefore recommended!

Costs and formalities

To take advantage of this, an estate management company or "SCI" (société civile immobilière) must be set up in France. It is recommended to use the services of a French notary to create it. (what normaly cost around €2,500).

If you have opted for this solution at the time of purchase, it will not cost you anything more. However, if you already own the property you transfer to the new estate management company, you will need to pay extra costs. But this remains reasonable as, for a building valued at €300,000, this is estimated at around €7,500 (incorporation and transfer costs).

Conclusion

Creating a legal person to own property could be solution for you if this property is in a country where civil law is more restrictive and in a country or canton where the tax law is less favourable than in your place of residence. Even if you did not adopt this solution at the outset, it is probable that it is now worth the trouble.

To resolve matters in the best possible way, do not hesitate to consult your notary.

Geneva and Berne, 1st January 2011

 

La modification des délais de prescription du contrat de vente et du contrat d'entreprise

Le 1er janvier 2013 est entrée en vigueur une modification des délais de prescription concernant la garantie pour les défauts, tant en matière de contrat de vente que de contrat d'entreprise.

Cette modification est le résultat de la mise en œuvre de deux initiatives parlementaires déposées en 2006 et 2007.

Ces initiatives ont été concrétisées par trois modifications législatives :

1. D'abord celle de l'art. 199 CO, en ce sens que les clauses écartant ou réduisant le délai de prescription de deux ans dans les contrats de vente conclus entre un professionnel et un consommateur seraient, cas échéant, nulles.

2. Ensuite celle de l'art. 210 CO afin, d'une part, de porter à deux ans le délai de prescription des actions en garantie des défauts pour tous types de ventes concernant des choses mobilières et, d'autre part, d'instaurer un délai de prescription de cinq ans chaque fois que les choses présentant un défaut sont intégrées à un ouvrage immobilier.

3. Enfin, en matière de contrat d'entreprise, celle de l'art. 371 al. 1 CO, renvoyant à l'art. 210 CO, afin de porter là aussi le délai ordinaire à deux ans.

Le nouvel article 210 CO

S'agissant de l'art. 210 CO, le délai de prescription de l'action en garantie pour les défauts de la chose vendue est dorénavant de deux ans à compter de la livraison faite à l'acheteur (al. 1). L'action se prescrit toutefois par cinq ans si les défauts de la chose intégrée dans un ouvrage immobilier conformément à l'usage auquel elle est normalement destinée sont à l'origine des défauts de l'ouvrage immobilier (al. 2). En outre, toute clause prévoyant un délai de prescription inférieur à deux ans, ou à un an en cas de vente de chose d'occasion, est nulle si cette chose est destinée à l'usage personnel ou familial de l'acheteur et si le vendeur agit dans le cadre d'une activité professionnelle ou commerciale (al. 4).

Le nouvel article 371 CO

S'agissant de l'art. 371 CO, le délai de prescription de deux ans (respectivement cinq ans) est repris concernant les défauts de l'ouvrage mobilier (respectivement les défauts d'un ouvrage mobilier intégré dans un ouvrage immobilier conformément à l'usage auquel il est normalement destiné s'ils sont à l'origine des défauts de l'ouvrage ; cf. al. 1). Les droits du maître d'un ouvrage immobilier envers l'entrepreneur, l'architecte ou l'ingénieur se prescrivent par cinq ans, comme cela était le cas auparavant (al. 2). Le terme d'ouvrage immobilier a toutefois été préféré à celui de « construction immobilière » de l'actuel art. 371 al. 2 CO. Enfin, un renvoi général aux règles relatives à la prescription des droits de l'acheteur est prévu à l'al. 3.

Les avantages

La coordination des délais s'agissant de choses vendues intégrées dans un ouvrage immobilier et l'harmonisation du droit suisse au droit international et européen constituent les avantages indéniables de cette révision. L'instauration d'un délai de prescription de deux ans permet aussi d'amoindrir le caractère unilatéralement défavorable à l'acheteur reconnu par le Tribunal fédéral en raison du court délai de prescription prévu actuellement. Une meilleure protection des consommateurs justifie donc la prolongation du délai de prescription (un tel délai reste court au regard du délai général de prescription de 10 ans, art. 197 CO).

En outre, le délai de deux ans est une règle impérative pour les contrats conclus avec des consommateurs, ce qui permet de renforcer encore la protection de ces derniers, les dispositions y relatives étant actuellement de caractère dispositif. Les intérêts du vendeur ne sont pas lésés par cette prolongation du délai en raison des obligations strictes de vérification et d'avis des défauts incombant à l'acheteur (art. 201 CO) ; en outre, il profite également de cette modification, attendu qu'il pourra se retourner contre ses fournisseurs dans ce même délai.

Enfin, la coordination des délais de prescription des contrats de vente et d'entreprise est un avantage considérable pour les entrepreneurs. A l'heure actuelle, si l'ouvrage consiste en une construction immobilière, la coordination n'est pas donnée entre le contrat de vente et celui d'entreprise puisque l'entrepreneur peut être recherché dans un délai de cinq ans par le maître d'ouvrage alors qu'il ne dispose lui-même que d'une année vis-à-vis de ses fournisseurs lorsque des choses mobilières sont intégrées dans une construction immobilière. Sur cette question de coordination toutefois, il convient de préciser qu'une certaine divergence subsiste concernant les points de départ des délais : dans le contrat de vente, le point de départ est la livraison de la chose alors que dans le contrat d'entreprise, c'est la réception de l'ouvrage qui importe.

Si vous avez des doutes quant aux questions soulevées dans la présente notice, les notaires swisNot sont à votre disposition pour vous conseiller.


Porrentruy / St-Aubin, le 01/03/2013

 

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