Can’t find a new tenant – what now?

Wanting to break an apartment lease agreement and agreeing on what constitutes a defect and which repairs need to be made are perennial issues at many advice and information centers. What usually happens: The tenant would like to move out early, but has not found the right new tenant. The following should be noted.

 

Vorzeitiger Auszug: Damit der Mieter nicht zu lange zahlen muss, können sich Verhandlungen lohnen. Bild: epr / BWH Bausparkasse

Moving Out Early: Negotiations may be worthwhile so that the tenant does not have to keep on paying. Image: epr / BWH Bausparkasse

There are many good reasons for a tenant to change their apartment or to break a lease: maybe you are getting ready to move abroad, your family has grown, you are changing jobs or you and your partner are moving to another city. Basically, the tenant is obligated to fulfill all contractual obligations until the lease is up. This means that the tenant is responsible for paying for all contractually agreed-on costs, including the rent, utilities, a rented parking space, other ancillary rooms, etc.

Different termination dates must be observed, depending on the region or canton you live in. Quite often, regulations state that a rented apartment can be terminated at the end of March, the end of June and the end of September. However, some leases provide for termination at the end of each month. Rental apartments and houses also have a notice period of at least three months; the notice period for business premises is at least six months.

How Long is the tenant liable?

 

Caution: The “fine print” in a lease is critical regarding defining termination dates. Multi-year contracts are concluded quite frequently, and in the case of early lease termination, the “fine print” can mean that tenant might remain liable for a longer period of time, which can be expensive. “Firm contracts for an extended period of time are often entered into for, say, one to five years, especially for larger apartments, for single-family homes and especially for business premises,” says Ruedi Spöndlin, legal adviser to the Tenants Association (MV).

Vacancy can be expensive

 

If the tenant remains liable for a certain transitional period, he might owe several monthly or even annual rentals depending on the duration of the contract. It can get expensive if the tenant has to pay dual rent on both the new and the previous residence!

Obligation to pay, however, can hardly be avoided, even if the previous apartment is now unused and empty. However, the renter can be released prematurely from the contract if he finds a reasonable, solvent tenant. It is also important that the new tenant takes over the apartment under exactly the same contractual conditions.

New tenant notf ound—what can help?

 

Schweizer Mieterinnen und Mieter ziehen oft um - was, wenn kein Nachmieter gefunden wird? (Bild: Homegate.ch)

Swiss tenants often move—what if you can’t find a subtenant? (Image: Homegate.ch)

How quickly one finds such a person, of course, depends on the local housing market. Sometimes a notice in a window or on a neighborhood bulletin board is enough (“Need a subtenant!” or “Apartment for rent”). Most tenants will place advertisements on online websites, place ads in local newspapers, ask friends or acquaintances, etc. Word-of-mouth often leads to finding a new tenant to take over a lease.

The most important criteria for the new tenant are acceptability and solvency; as a rule, a tenant is considered to be solvent if the rent does not exceed one third of his income. If the homeowner refuses a proposed new tenant for personal, non-objective reasons, then the tenant is released from his contractual obligations. He no longer has to worry about the issue of “not finding a subtenant.”

New tenant not found: The legal situation

 

However, if a new tenant is not found, then the tenant is liable for paying for all costs due according to their proper dates. Pavlo Stathakis, attorney at HEV Switzerland, clarifies: “In principle, all agreed-on payments are due and must be paid, including the rent, and of course, all agreed-on additional costs or the rent for other rooms.”

The next most obvious thing to do is to find out whether these costs can be reduced. The best way to go about this is to find out whether there is any bargaining room with the landlord: In a specific individual case, it is conceivable that it might be time for  homeowner to make certain repairs and renovations, anyway. Looked at this way, it will not matter much to the landlord whether he implements his plans right then or later on if he intends to re-list the apartment after the renovations have been completed. If a tenant wants to break his lease and it benefits the landlord for him to allow that, then the tenant should negotiate to pay just a pro-rated portion of the rent.

No tenant not found: The cost issue

 

Ruedi Spöndlin, attorney and legal advisor to the Tenants Association (MV), cites Article 264 of the Code of Obligations OR on breaking a rental lease: According to this, the landlord must be allowed certain savings or benefits as a result of the tenant breaking the lease. “If during this time,” says Ruedi Spöndlin, “the landlord repaints or renovates the apartment, then he can take it over for his own use.” This means that the tenant who wants to break his lease is no longer liable for paying any more rent.

In the abstract, most lawyers agree: If the landlord achieves certain savings or otherwise obtains an advantage from the early return of the leased property, then he must treat this as an offset, or a benefit. As so often happens, however, it is a matter of judgment how this is interpreted in actual practice.

Pavlo Stathakis of the HEV, however, warns against misconceptions: “In practice, this principle is hardly ever relevant.” Since breaking a lease usually happens on short notice, the homeowner rarely has the leeway to take any advantage of it—such as the short-term rental of the apartment to a third party. However, the tenant who is breaking the lease at least benefits from not having to pay any more utility costs if they are consumption-dependent. This is especially true for  consumption-based heating costs, because it is legitimate to lower the heating for a vacant apartment. The same applies to the hot water if it is billed on an as-used basis.

Breaking a lease: What about the security deposit?

 

The issue of the rental deposit often comes up. In general, the rental deposit can only be paid out when the ordinary end of contract has been reached or when a subtenant has been found, and once the tenant has fulfilled all his obligations. The question regarding whether the money or deposit will be paid back to the tenant remains open if there is a conflict regarding whether the lease has ended or not. “However, if all costs have been settled, then the landlord must return the security deposit promptly,” says Pavlo Stathakis HEV Switzerland.