Editorial: Real Estate Transactions

Real estate has been bought and sold since time immemorial. You could be forgiven for thinking that there was no more to be said on the subject. Rights and obligations relating to landed property, its acquisition and realisation by way of security interest have been systematically organised under the law throughout the whole of Switzerland since 1912. Buyers and sellers arranged for real estate to be valued and negotiated independently among themselves. Until the turn of the century, the brokerage sector had very little influence on the real estate market in Switzerland (the Swiss like to act on their own account). For this reason no proper procedure was developed for real estate transactions.

illustration-real-estate-transactions

However, even though legislators still restrict the acquisition of real estate by foreigners – at least with regard to capital investment in residential real estate – global investors have since discovered the Swiss real estate market as a means of diversifying their capital investments. In the process, procedures from the English-speaking world such as reporting on property and markets, facility management, CREM (corporate real estate management), due diligence, structured acquisition and structured financing have found their way into the Swiss real estate industry almost unnoticed. Swiss legislation has not stood in the way of these changes, although it does regulate them in the main by way of general rather than detailed principles. Hence the principles of the six types of due diligence can be implemented despite the existing right of guarantee on the acquisition of real estate.

These new trends not only represent a challenge to buyers and sellers, but also to advisers: Detailed procedures for operating, maintaining and selling or acquiring real estate create transparency and protection against risk, including protection against the exaggerated upward price spiral. Procedural errors are traceable. These procedures have become indispensable in view of shorter economic and investment cycles. However, most tools will not be of use if their results are being embellished, interpreted incorrectly or even re-interpreted, just to fit certain purposes. To reject an opportunity to buy or sell requires endurance and consistency. Furthermore, procedures alone are not sufficient; extensive knowledge and experience of the industry are also needed in order to interpret the regulations correctly. Below we offer you various articles on current real estate topics. We hope you enjoy reading them.

Bürgi Nägeli Lawyers
Urs and Gudrun Bürgi-Schneider