Right of pre-emption

Right of pre-emption – a definition

The right of pre-emption allows an entitled party to be the first to submit a bid for a property for sale.

Rights of pre-emption may not be transferred and can only be bequeathed in certain circumstances. The maximum duration of the right of pre-emption is 25 years.

If you want to read about it in more detail: The right of pre-emption is governed in Switzerland in the Swiss Civil Code starting from Art. 681. You’ll find further information from Art. 216 of the Code of Obligations.

When does the right of pre-emption apply?

The right of pre-emption only applies when the seller wants to dispose of a property for which they have already assured an entitled party of the right of pre-emption, the entitled party expressly exercises this right and there is a sales contract signed by both parties.

• In the case of inheritance or giving the property as a gift, the right of pre-emption does not apply.

• The entitled party is allowed to waive the right of pre-emption.

• The right of pre-emption doesn’t necessarily have an effect on the 

• sales contract or the property purchase price itself. One exception is in the case of 

• a limited right of pre-emption (continue reading for more on this topic).

Important for a planned property sale: As the seller, it is essential to check whether there is a statutory right of pre-emption well in advance so as to avoid any unpleasant surprises.

Statutory and contractual right of pre-emption

The right of pre-emption can be governed by law or by contract:

Statutory right of pre-emption

The statutory right of pre-emption arises through a building permit, land rights (e.g. tenants) or a joint ownership agreement. It is governed by Art. 682 of the Swiss Civil Code.

As the name implies, no contractual arrangement is required for it to take effect. It’s important to remember that statutory rights of pre-emption cannot be inherited.

Contractual right of pre-emption – limited and unlimited

The contractual right of pre-emption is governed in a right of pre-emption contract, which the property owner can conclude with the beneficiary (tenant, family member, etc.). It must be certified by a notary and recorded in the land register.

The contractual right of pre-emption can also be limited or unlimited.

In the case of a limited right of pre-emption, the parties can establish the conditions of the purchase and sale of the property in a preliminary agreement, for example the price. With an unlimited right of pre-emption, on the other hand, the entitled person is not granted any separate purchase conditions.

It’s important to remember that the contractual right of pre-emption can be inherited (unless this is expressly prohibited by contract) and expires after 25 years.

Important for buyers: do tenants have the right of pre-emption?

People sometimes have the impression that a tenant automatically has a right of pre-emption for a rental property. But this is not the case.

A tenant can of course also be the person entitled to the right of pre-emption, but only if they either meet the legal requirements (see statutory right of pre-emption) or there is a corresponding contract (see contractual right of pre-emption).

It is also the case that property owners often select a long-term tenant as the person entitled to the right of pre-emption. The reason for this is obvious: it can be assumed that the person already knows the property very well and presumably looks after it well. Nevertheless, this case also requires that the right of pre-emption must be recorded in a contract and accepted by both parties.

For a lease, it can look different again, with cases for which statutory right of pre-emption applies. As a property owner and a tenant, it is always worth staying up to date with the legal situation and reaching a timely contractual agreement in the event of interest in a sale or purchase.

Can the right of pre-emption be bypassed or overruled?

The statutory right of pre-emption cannot expire, but there are possibilities to restrict or offset it through certain agreements. Property owners should seek advice in this regard (from a notary or the broker for their asset).

The contractual right of pre-emption has a minimum term and expires either with the lapse of the contractually agreed period or based on a contract after a period of 25 years. Early, full termination is generally not possible.

Because the right of pre-emption, be it statutory or contractual, applies exclusively in the case of a sale, you can bypass it as a property owner by bequeathing the associated property or transferring it to another owner as a gift.

What rights and obligations are there for the right of pre-emption?

As a property owner, you should keep up to date on the right of pre-emption in terms of both rights and obligations, as well as the specific effects on your property. In the event that you neglect to inform a beneficiary of a sale, they can assert their right of pre-emption even after the sale. The statutory right of pre-emption grants the beneficiary of the right of pre-emption two years to do so from the time of the entry in the land register. For the contractual right of pre-emption this is ten years.

Among your obligations as a seller is informing the beneficiary of your intention to sell. As the beneficiary of the right of pre-emption, on the other hand, you would have three months to decide whether you want to accept the purchase or waive the right of pre-emption. Once the deadline has passed, the right of pre-emption lapses automatically.

An important nuance here is that for the sale to take place, there must be a sales contract with a third party for the property. The listing, negotiations or intention to sell alone are not sufficient to be counted as a sale.