Condominium Management and Administration

Condominium Management and Administration in Switzerland

Floor ownership (propriété par étages / PPE) represents a very widespread form of co-ownership in Switzerland, allowing several persons to own real estate while retaining autonomy over their individual unit. This complex legal structure requires rigorous management and administration in compliance with Swiss law. The Swiss Civil Code (arts. 712a to 712t) governs this particular regime which combines individual and collective ownership. Day-to-day management, collective decision-making, allocation of charges and maintenance of the building constitute fundamental aspects requiring in-depth knowledge of the applicable legal and regulatory provisions.

The Legal Framework of Floor Ownership in Switzerland

The floor ownership regime is governed primarily by arts. 712a to 712t of the Swiss Civil Code. These provisions define the rights and obligations of co-owners, the organisation of the community and the operational rules of the PPE.

Floor ownership rests on a dual legal status: each owner holds an exclusive right over their individual unit (apartment, commercial premises) and a co-ownership right over the common parts of the building. This duality constitutes the particularity of this regime and gives rise to specific legal implications.

Constitutive Documents of a Condominium

Several documents govern the operation of the condominium:

• The constitutive deed which formally establishes the floor ownership
• The administration and use regulations which determine the management and communal living rules
• The allocation plans which delimit the private and common parts
• The co-ownership share allocated to each unit, expressed in thousandths or percentages

These documents must be drafted with precision as they govern the entire life of the condominium. Inadequate drafting can give rise to conflicts between co-owners and management difficulties. Our law firm frequently intervenes to analyse, revise or establish these founding deeds in accordance with Swiss law requirements.

In addition to the statutory framework, the Federal Supreme Court's case law has over the years clarified the interpretation of many provisions, particularly regarding the majorities required for certain decisions or the validity of restrictive clauses in regulations.

Condominium Bodies and Their Operation

The condominium is organised around two main bodies: the co-owners' assembly and the administrator. Their proper functioning conditions the harmonious management of the community.

The Co-Owners' Assembly

The assembly constitutes the supreme body of the condominium. It brings together all co-owners and makes all decisions relating to the management and administration of the building. The assembly must meet at least once a year, but extraordinary meetings may be convened as needed.

Decisions are made according to different majorities, depending on their nature:

• A simple majority of co-owners present for acts of ordinary administration
• A qualified majority (generally a double majority of co-owners and shares) for more important decisions
• Unanimity for fundamental decisions affecting the rights of co-owners

The convening must respect certain formalities (deadline, precise agenda) and proceedings must be the subject of detailed minutes. These procedural aspects are decisive as an irregularity may lead to the annulment of decisions taken.

The Condominium Administrator

The administrator is responsible for the day-to-day management of the building. Their duties include:

• Implementation of decisions taken by the assembly
• Financial management (budget preparation, collection of charges, payment of invoices)
• Subscription of necessary insurance
• Organisation of maintenance and repairs
• Representation of the community towards third parties

The administrator may be a co-owner or an external professional (property management company). Their appointment and revocation fall within the competence of the assembly. Their mandate, generally for one year renewable, must be clearly defined.

Financial Management and Allocation of Charges

Financial management represents a central aspect of condominium administration. It encompasses the preparation of the annual budget, the collection of charges from co-owners and the constitution of reserve funds.

Budget Preparation and Charge Collection

The forecast budget is prepared by the administrator and then submitted to the assembly for approval. It must cover all foreseeable expenditure: routine maintenance, common consumption (water, electricity, heating), insurance, administrator's fees, etc.

On this basis, periodic advance payments (generally quarterly) are requested from co-owners. Allocation is made according to the shares defined in the constitutive deed, except for certain charges which may be allocated according to other criteria (actual consumption, specific use of equipment).

Reserve Funds

The constitution of a renovation fund is strongly recommended, although not mandatory under Swiss law. This fund allows major works to be anticipated (facade renovation, roof replacement, modernisation of installations) without having to solicit exceptional contributions from co-owners.

The optimal amount of this fund depends on the age and condition of the building. A common rule consists of provisioning annually 0.5% to 1% of the building's insurance value. This fund belongs collectively to the community and remains attached to the building: a co-owner who sells their unit cannot claim their share.

Handling Arrears

Recovery of unpaid charges constitutes a recurring challenge in condominium management. The administrator must act promptly in the face of payment delays:

• Sending reminders to the defaulting co-owner
• Formal notice
• Initiating debt enforcement proceedings if necessary

Swiss law grants the community a statutory mortgage over units to guarantee claims for common charges for the last three years. This security considerably strengthens the condominium's position vis-à-vis recalcitrant co-owners.

Building Maintenance and Works

Building maintenance represents a major responsibility of the condominium. Regular maintenance preserves the value of the property and prevents deterioration likely to give rise to greater costs in the long term.

Distinction between Routine Maintenance and Extraordinary Works

Swiss law distinguishes:

• Routine maintenance: minor repairs, preventive maintenance, emergency interventions. These actions generally fall within the competence of the administrator.
• Extraordinary works: major renovations, improvements, transformations. These interventions require an assembly decision, with varying majorities depending on their nature and scope.

Decision-Making Process for Works

For major works, a rigorous process is required:

• Prior technical diagnosis
• Consultation of several companies
• Preparation of precise specifications
• Comparative analysis of offers
• Decision at the assembly according to the required majority
• Execution monitoring and acceptance of works

Administrator Roles and Responsibilities

• Representation: represent the co-owner community towards third parties and in court
• Implementation of decisions: carry out the assembly's resolutions
• Financial management: collection of charges, bookkeeping, management of the renovation fund
• Maintenance: ensure the preservation and maintenance of common parts
• Convening: convene and chair the annual assembly
• Emergencies: take urgent conservatory measures without waiting for the assembly

Administrator Competences under the SCC