Moving out of home and into your first flat? Young people, in particular, often start off living in flat shares. ‘Room to let in a shared flat…’ It may sound simple and friendly – but there are nevertheless a few formalities you should watch out for.
It’s all very exciting – Evelyn from Zurich finally has the chance to move in with a couple of close friends. They are all on the same wavelength, have similar taste in furniture and interior design, and enjoy spending time together. It will be the first flat they can call ‘their own’. They are looking forward to the freedom and independence this will bring. None of the three friends would be able to afford a flat in the city alone, but splitting the rent three ways makes it much more affordable.
Flat shares: two types of contract
The formalities are often underestimated in many flat shares, however. When moving into a flat share, have you ever really thought in detail about the contract, liability and the good old question of money? Evelyn and her friends have two main options. They can nominate a ‘main tenant’, who alone signs the rental contract with the property manager and assumes sole responsibility. The main tenant is liable for all of the costs arising from the tenancy. Their flatmates are then considered subtenants. This kind of subtenancy set-up is common in many flat shares across Switzerland.
The other option is for everyone sharing the flat to sign the contract together and collectively assume liability for the costs arising from the tenancy – including the rent, deposit, bills and as a result of any damage to the property. This second option is appealing, as it means no one in the flat share occupies a superior legal position; all of the flatmates have the same rights and responsibilities.
The subtenancy model: pros and cons
Subtenancies are fairly straightforward and informal, and can even be agreed verbally (this applies for all kinds of tenancy – a written contract is not necessary). If a flatmate who is a subtenant moves out, the formalities and organisational effort are kept to a minimum. The main tenant simply looks for a new subtenant. The contractual relationship between the main tenant and the property manager remains unchanged. The disadvantage is that subtenants are in a weaker legal position. ‘It’s a bit of an exaggeration, but you could say they are second-class tenants,’ says Fabian Gloor. He is a lawyer for the Mieterverband (MV) tenants’ association and regularly answers legal questions via its hotline. If the main tenant moves out or the rental contract is terminated, the subtenancies also end. In addition, the main tenant has the right to end a subtenancy.
In practice, the main tenant often chooses who moves into the flat – and who has to move out, if push comes to shove. It’s not uncommon for conflicts to escalate and flat shares to fall apart such that they need to be reformed from scratch.
It is also worth bearing in mind that this kind of subtenancy is an independent contractual relationship. The main tenant may not make illegal gains from the subtenancy, and they must make the terms of the subtenancy known to the property manager. But in practice, subtenants cannot be sure that the terms of their subtenancy are fair – unless the main tenant voluntarily shares the terms of the main tenancy agreement with them. ‘When it comes to the financial side of things, trust is good, but control is better,’ advises Gloor from MV.
Flat shares: the co-tenancy model
The collective model with shared liability among equal co-tenants can lead to a number of complex legal questions. If the tenancy can only be terminated jointly, this means that no individual flat member can be forced out of the flat share against their will. Terminating the tenancy agreement therefore becomes a complicated undertaking. If the tenancy needs to be terminated for any reason, all of the details need to be re-established and renegotiated from scratch – from the content of the contract to the members of the flat share.
There is sometimes a relatively simple solution – for example, if one flatmate moves out and a new one can take their place in the tenancy agreement. When drawing up the contract and dealing with the key legal questions, all of the parties involved need to come to a formal agreement. That means all of the co-tenants listed in the contract, plus the landlord or property manager. There is always the risk with this kind of tenancy that when changes are made to the flat share, the contractual relationship cannot simply be continued without further ado. The property manager and the tenants are free to choose how and with whom they wish to continue the rental contract.
Living in a flat share: ground rules are important!
It’s clear that the legal aspects of moving into a flat share should not be underestimated. The communal style of living and everyday workings of a flat share might be consciously ‘laid back’ and apparently straightforward – but tricky questions often arise in the case of a dispute. ‘I would advise against flat shares with purely verbal subtenancy agreements, for example,’ says lawyer Fabian Gloor. Cohabitation and responsibilities that have merely been verbally agreed usually work just fine – until there is any kind of conflict.
This can be an argument about money or the delicate question of someone moving out. Important points that should be established in the contract include clear provisions regarding contract termination (deadlines, notice periods, etc.) and bills. If nothing has been agreed, subtenants can assume that they don’t need to pay anything besides the rent. Notice periods and deadlines apply in accordance with the subtenancy agreement or, if nothing has been agreed, in accordance with the statutory regulations.
Evelyn and her flatmates are confident that they will be able to resolve any differences of opinion amicably – but they also realise that in order to ensure that things run smoothly in the long term, they need to talk about practical matters, such as money and the kind of tenancy agreement they want.