Real estate contract

The term “real estate contract” is a generic term for contracts including contractual provisions relating to immovable property, developed property or undeveloped land. In particular, real estate contracts may govern the transfer (e.g. purchase according to Art. 216 et seq. of the Swiss Code of Obligations (OR), donation according to Art. 239 et seq. OR), the use (e.g. rent according to Art. 253 et seq. OR, lease according to Art. 275 et seq. OR, loan according to Art. 305 et seq. OR) or the construction (e.g. contract for work and services according to Art. 363 et seq. OR, general or subcontractor contract) of immovable property. While a contract of use – such as rent, lease or loan – is not bound by any formal requirements, a contract for the purchase or donation of real estate within the meaning of Art. 655 of the Swiss Civil Code (ZGB), for example, must be publicly notarised to be valid. Furthermore, the new owner must be entered in the land register.

Moreover, the property law provisions of the Swiss Civil Code (ZGB), which define the content and restrictions of land ownership, must be observed. For example, according to Art. 730 et seq. ZGB, a plot of land can be encumbered with an easement, such as a right of way, for the benefit of another plot of land. Furthermore, according to Art. 745 et seq. ZGB, usufruct can also be contractually created for a plot of land. The usufruct entitles the beneficiary to the exclusive use of the plot of land (e.g. to live in or rent out a building on the plot of land). Such contracts also require notarisation and entry in the land register.

The transfer of immovable property requires notarisation, as does the creation of easements. This is intended to protect the parties to the agreement from rash acts.

Other contracts relating to immovable property may contain elements of a contract for work and services pursuant to Art. 363 et seq. OR (e.g. construction contract) or elements of contract law pursuant to Art. 397 et seq. OR (e.g. architect’s, surveyor’s or engineering contract).