The stress-free way to find a suitable new tenant

Finding a new tenant – what should I do? When is a tenant allowed to look for a new tenant?

Tenant questions such as ‘Am I allowed to look for a new tenant?’ or ‘Does the tenant have to look for a new tenant?’ are often the first thing tenants consider when they start thinking about moving house. It is important to first clarify the legal framework that applies when moving house. You should also read the information available on this topic with a critical eye. The best example for this is the rule of three new tenants.

New tenant law in Switzerland: the rule of three new tenants – fact or fiction?

The ‘rule of three new tenants’ is a legal myth that you may have heard of. It states that tenants can terminate an ongoing contract prematurely if they can put forward three new tenants. But this is not the case. In fact, early termination is possible if the tenant can find a single acceptable replacement tenant.

In other words, quality over quantity. In order to move out early, the law requires you to first find a suitable replacement tenant for your landlord. We explain the legal situation that allows you to terminate a rental agreement early in such a case.  

Find a new tenant, understand the legal situation

According to the Swiss Code of Obligations (Art. 264), early termination of a rental agreement is possible as soon as the following conditions are met:

• You must find and put forward an acceptable and solvent new tenant.
   
• This person will take over the existing rental agreement under the same conditions.

Checklist – tips for the tenant search: the six steps to successfully finding a new tenant

1. Notify your landlord in good time: Notify your landlord or management company in writing if you want to move out early (i.e. before the end of the lease). Send a registered letter informing them that you wish to move out and keep a copy of the letter and the postal receipt as proof. This step is essential in order to get the process of moving out early confirmed and to clarify any misunderstandings.

2. Advertise your apartment: Advertising your apartment here on Homegate is quick, easy and free of charge. Take advantage of this opportunity and make sure that your listing is appealing. Generally speaking, the search for a suitable successor is made much easier by submitting a professionally edited listing and as complete a set of documents as possible. 

3. Conduct apartment viewings: Organise viewings and have prepared forms ready for prospective tenants to confirm that they wish to take over the apartment on the given terms. It is important to collect all relevant documents (including an extract from the debt collection register).

4. Choose your successor: According to Swiss tenancy law, all you need to do is find one acceptable new tenant. However, it is advisable to propose several potential candidates. This increases the probability that someone suitable will actually be found among your suggested options – because landlords are not obliged to accept the suggested person (under certain conditions). We’ll look at when that’s the case in a minute.

5. Submit your suggestions: Were you able to find one or more suitable prospective tenants? Excellent. If so, you should let your property management company know – in writing. Also let them know the desired moving-in date of the potential new tenant and give them enough time to review the suggestions.

6. Obtain written confirmation: When the specified deadline for review has expired, ask for written confirmation that you are released from your contractual obligations.

When can a landlord refuse to accept a new tenant?

There are specific circumstances under which a management company can reject your proposed new tenant. However, the reasons for rejection are limited by law. Management companies therefore have only a certain amount of leeway and must not make arbitrary decisions.

Key criteria for the new tenant

• Ability to pay (solvency): Anyone who wants to be considered as a new tenant must be financially able to pay the rent on time and in full. Instead of a salary statement, confirmation from the social security authority proving that the rent is secured is also sufficient.
   
• Acceptability: The management company may not impose more stringent requirements on the new tenant than on the existing one. New tenants can be turned down if their tenancy could negatively impact other tenants. This primarily applies to cohabiting in the building.
   
• Willingness to take over the rental agreement on the same terms: The prospective new tenants must be willing to accept the existing rental agreement including all conditions (such as a ban on pets).

Reasons for rejecting new tenants

• The management company can reject a new tenant if they do not meet the above criteria.
   
• If the company has good cause to consider a potential tenant unacceptable, this may also lead to rejection. However, its reasons must be objectively justifiable and must not be discriminatory. For example, if a potential new tenant has an entry in the debt collection register, they are considered unacceptable and may be rejected by the landlord. 

What constitutes acceptability? You’ll find a suitable new tenant under these conditions

Of course, whether someone is solvent can easily be judged objectively. The term ‘acceptable’, on the other hand, leaves a lot of room for interpretation. For example, in a quiet house, the management company does not have to tolerate a concert pianist who wants to practice a lot in their own four walls.

If your management company rejects an acceptable and solvent replacement tenant without good cause, you are still released from your contractual obligations because you have fulfilled your task. This applies from the date on which the new tenant would have taken over the tenancy. In such cases, it is advisable to seek legal advice. This way, you can ensure that you as a tenant are properly released from the contract and that you can move into a new apartment without any worries.

A special case: if the management company wants to adjust the rental price to the going rates in the city or neighbourhood after you have given notice of termination, that’s generally its prerogative. If a prospective tenant decides not to move in because they do not want to pay the new rent – which is around CHF 200 to CHF 300 higher than before – you are still released from your obligations. The obligation to pay rent formally ends on the day on which the new tenant should have commenced the tenancy.

What if, as a tenant, you can’t find a new tenant for your current apartment?

If you have not been able to find a suitable new tenant, you will remain bound to the rent until the end of the contractual notice period. In this case, termination is subject to statutory/contractual provisions and does not constitute extraordinary termination. This means that you can only terminate your tenancy on the official termination date, as no new tenant will fill in for you beforehand.

Typical local termination dates are included as possible termination dates in many rental agreements. These dates are often at the end of March, June or September. The statutory notice period is usually three months. Your notice of termination must therefore be received by the landlord at the latest three months before the desired moving-out date.

Do you really want to terminate your tenancy as soon as possible? Then you definitely shouldn’t give up your search at this point. If you find a new tenant, you can move out of your apartment earlier than agreed and the management company won’t suffer any loss. Whether you’re looking for a new tenant in a big city or a rural area, with Homegate, you can create your free listing and find your next tenant.