Swiss real estate law provides for a specific condominium structure that offers various advantages. Known in French as a propriété par étages (PPE), it usually applies to apartment blocks, as its name meaning “co-ownership by floor” implies. This arrangement gives individuals the opportunity to own their home despite building land being increasingly scarce in Switzerland nowadays.
In a PPE condominium, several people co-own a certain part of the dwelling. What makes it special is that each owner is also granted an exclusive right to their own home and in some cases also to another room, for example the loft. This enables a homeowner to renovate the inside of their property, and they can also sell or re-mortgage it. In order to benefit from this exclusive right, the property must form a self-contained whole and have its own entrance.
The building is divided into two areas :
- Private areas, to which the owner has an exclusive right of enjoyment and use (the inside of their apartment, non-load-bearing internal walls, the apartment’s front door, the inner part of the balcony, etc.);
- Communal areas, which are jointly owned by all the condominium members (the plot of land, load-bearing walls, roof, façade coating, lift, etc.)
In a PPE structure, all costs and risks are therefore shared by all the co-owners, another advantage of the set-up.
There are two types of PPE, the most common being the “horizontal form”, where an apartment block is divided into floors or smaller units. There is also the less widespread “vertical” type, which applies to buildings that take the form of adjoining houses.
Key steps in setting up a PPE
A simple informal agreement is not enough to set up this kind of structure: a legal document called a condominium declaration (acte constitutif in French) is required. This declaration establishes the PPE’s authentic legal status and its addition to the Swiss land registry.
Article 712 section 2 of the Swiss Civil Code (CC) governs this process and requires either a written contract signed by all the co-owners, or a declaration by the individual owner.
Each individual property inside the building has its own page and number on the land registry, guaranteeing its independence and the exclusive rights enjoyed by its owner. In most cases, the condominium is set up by a single person who starts out with all the rights to the building and then sells them later.
Articles 712 a-t of the Civil Code (CC) form the main legal basis for PPEs. However, there are also relevant provisions in the fields of Swiss co-ownership law (Art. 646-651 CC) and association law (Art. 60-79 CC).
How each co-owner’s share is calculated
Each co-owner has a share in the building’s total value that reflects the proportion that they own, as well as a share in the rights and duties associated with it. This is a very important concept since it forms the basis for calculating communal charges such as maintenance fees.
The share is generally expressed in hundredths or thousandths of the block’s total value. It is not taken into account when setting a property’s asking price, however - this is based on supply and demand as well as the property’s location and standard of construction.
It’s always best to consult an expert to make sure that the share is calculated correctly. They will generally take the following factors into account :
- The base area (in square metres) of the part where the owner has exclusive rights.
- The base area of any additional premises such as a loft, cellar, etc.
- The base area of the parts where the user has a right of enjoyment, like a parking space
The calculated share is then recorded in the land registry. There are only two situations in which this entry may be changed:
- All of the co-owners vote to approve the change and the land registry is edited accordingly.
- A co-owner requires an error to be corrected (such as a mistake in calculating their share or major changes to the building)
Administration and management
An administrator is usually appointed when the condominium is set up. They are usually elected by the co-owners’ committee.
Their main role is to represent the interests of all the co-owners, as well as dealing with various requests, organising meetings, monitoring the condition of the building, arranging any work needed and making sure the co-owners perform their duties (maintaining communal areas, etc.). They are also responsible for keeping the condominium’s accounts and monitoring the budget approved by the committee.
The administrator charges a fee for this service, which is generally set in advance and varies according to the type of condominium and the tasks performed.
The renovation fund
The co-owners all contribute to the cost of repairs and renovation fund is set up to pay for any major work that may be needed one day. This need not be done right away if the condominium was built recently and is therefore still under guarantee.
It’s up to the co-owners to decide how much money to put in the fund. As a rule, contributions are made as a percentage of the property’s value. For example, if a building is worth 3 million Swiss francs, 2.5 thousandths of this sum could be saved in the fund.
Usually only the administrator and/or two committee members can access the renovation fund account.
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