On this page, we provide you with an overview of the most important aspects of a Property Management Agreement
in Switzerland, including the elements to be taken into account when drawing up the agreement.
Subsequently, we will provide you with a legally compliant template of a Property Management Agreement under Swiss law.
… you own commercial and/or residential property and want to hire a company or individual to manage it
… you work as a property management company and need to make your responsibilities clear
Under a property management agreement, a property owner hires an individual or a company to manage rental properties. The legal relationship between the owner and the property manager is based on the rules of the mandate, which entails that the manager should always act in the owner’s interest.
This means that, on the one hand, the agreement should lay at least out all of the manager’s basic responsibilities – in accordance with standard market practice – for renting, advertising, and the maintenance of the rental properties, as well as dealings with tenants and local authorities. The agreement further stipulates that the property owner maintains a fund available to the manager to cover day-to-day running, repairs and refurbishment of the rental properties. The manager can’t be held liable if the owner fails to provide the necessary funds in due time.
On the other hand, the agreement should be designed to best fit the parties’ interest and, of course, the property itself. The specific content of the agreement will thus depend on individual factors, such as whether the owner is an institution that holds numerous properties, including commercial space. In this case, the reporting obligations of the property manager will generally be more extensive, and the conclusion of commercial leases will be subject to additional requirements, corresponding to market practice. Also, the nature and scope of the property manager’s responsibilities may also include customized services, such as marketing new rental properties, overseeing major construction work, managing a separate account in the owner’s name, or servicing mortgage debt. These factors will be reflected in the property manager’s compensation.
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