There are certainly obvious reasons why you might want to sublet individual rooms or even an entire apartment. This practice of ‘subletting’ is generally permitted. The boundary separating subletting from unauthorised commercial use of the rented home, however, has not been clearly defined. From a legal perspective, the matter remains controversial – as a recent survey shows.
In our digital age, it is not unusual for rented homes, or sometimes even offices, to be advertised on a public rental or booking platform (Airbnb, Booking.com, etc.). If the person advertising the property is the property owner, this is generally accepted. But what happens when tenants want to make use of their rented home? In extreme cases, the neighbours can take exception to the continual coming and going in the building. From a legal perspective also, the leeway available to tenants is more restricted than many people would like to believe.
Subletting: the formal approach
In principle, there is no formal requirement governing whether landlords have to agree to subletting verbally or in writing. Nevertheless, it is advisable to give or require consent in writing. This is the only way to prove what the landlord and tenant agreed in the event of any dispute. Landlords should grant their consent in writing, sent by registered mail, as soon as possible after the request is made.
Incidentally, the standard form or specimen rental agreements used widely in practice explicitly require the landlord’s written consent. Things are always tricky when no clear agreement is reached. If the landlord doesn’t respond at all, or if only a vague verbal agreement was made, the tenant is taking a risk. Thomas Oberle, a solicitor at HEV Schweiz, the Swiss homeowners’ association, explains: ‘In their own interest, tenants should not interpret silence as consent.’ This applies, in particular, to cases in which verbal consent would be sufficient (i.e. if the contract does not explicitly specify written consent).
Subletting via Airbnb: a risk for tenants?
If the subletting conditions change or the subtenant changes, the landlord has the right to be notified. A landlord is entitled to terminate a tenancy in the event of an unauthorised or objectively inadmissible sublet.
Incidentally, most experts interpret subletting as a temporary arrangement in which tenants are not using the apartment themselves. So anyone who moves out for good and uses the apartment for commercial purposes on a permanent basis is flouting this legal principle and could risk termination of their tenancy.
Subletting is considered to be objectively inadmissible under Art. 262 Swiss Code of Obligations (OR) in the following three cases:
- Disclosure of conditions: If the tenant refuses to provide information on the subletting terms and conditions. For example, the landlord has the right to request a copy of the sublet agreement.
- Misuse: The rent charged must not be excessive. Tenants are not allowed to make a profit from the sublet, although they can charge a reasonable amount for furniture, fixtures or tenant obligations that they assume. Decisions on where the boundary lies between a permissible and improper charge have to be made on a case-by-case basis. According to the small number of court rulings in such cases, however, the charge should not exceed between 10% and a maximum of 20%.
- Major disadvantages: Subletting can be prohibited if it comes with disadvantages for the landlord; for example, if the subtenant uses the rooms for a different purpose than agreed in the main rental agreement or if the rooms are over-occupied as a result of the sublet.
Airbnb: property management practice
The legal situation and the specific interpretation of the legislation in cases involving regular rental via internet platforms raises questions in practice. This is shown by some cases in which tenancies were terminated, and also by the cautious approach taken in a professional rental setting. ‘Given the legal basis, we generally do not accept regular Airbnb rentals,’ explains a spokeswoman for Privera, one of the largest property management companies in Switzerland. The statutory provisions referred to above play a role here. The important principle is that the landlord does not have to accept any disadvantages resulting from a sublet. Regular short-term lets, however, would result in exactly this: disadvantages such as increased wear-and-tear in the apartment or an adverse impact on other tenants in the building. According to the spokeswoman, although complaints are rare, they do happen; for example, when neighbours complain about strangers in the stairwell or when Airbnb guests ring other doorbells to gain access to the building.
Apartment as a business?
This is compounded by a lack of clear guidelines and legal bases on a number of key aspects. This is also confirmed by a survey of experts and lawyers. Oberle, a solicitor at HEV Schweiz, the Swiss homeowners’ association, says: ‘In my opinion, this is not actually a sublet in the strictest sense of the word.’ A scenario in which, for example, a property owner lives alone in a single-family home and has enough space to make a room available to a student is assumed to be a sublet. The same applies if a tenant is spending a year abroad and sublets the apartment during this period. ‘But if the apartment is regularly advertised on one of the common booking and accommodation platforms, this is not the same sort of sublet. Then it takes on the character of commercial activity,’ explains Oberle. And landlords ‘never have to tolerate’ this sort of commercial use.
Commercial use: potentially misuse
For Oberle, this is where things really get tricky: even if tenants rent out their apartment for only two months during the summer through Airbnb, they can soon fall into the trap of rental activity that constitutes misuse. A simple example illustrates this: let’s assume that the rental is CHF 1,000 a month. During the high season and provided that the apartment is in a prime city-centre location, the tenant will be able to easily rent out their apartment for two months to tourists for CHF 4,000. This means that the yield is twice the rent – and that would clearly constitute misuse. In such circumstances, explains Oberle, it is obvious that the landlord is entitled to prohibit subletting.
Checklist for tenants: liability & defects
Tenants should be aware that when they sublet their apartment, they become the landlord. The subtenant is subject to the same rights and obligations. The sublet agreement basically sets out provisions governing the same aspects as the main rental agreement (price, rental period, termination options, description of the rooms being rented, etc.).
The subtenants are not allowed to use the apartment for any other purpose than that for which the tenant is allowed to use it. For example, they must comply with the house rules and established local practices.
The tenant is responsible for repairing defects in the apartment. Even if the tenant sublets the entire apartment, they of course remain the landlord’s contractual partner
- and are still liable for the rent and all contractual additional costs.
- Tenants can be held responsible by their landlords for any damage caused by the subtenant.
The tenant has to pay compensation for damage caused; for example, if the subtenant damages the parquet flooring or the ceramic hob in the kitchen. The tenant will, of course, try to collect this money from the subtenant.
It is crucial not to underestimate this aspect, particularly with regular but short-term sublets to third parties: tenants are fully liable for any damage caused by Airbnb guests.