Creating and Drafting PPE Rules in Switzerland
Floor ownership (PPE — propriété par étages) represents a particular form of real estate co-ownership in Switzerland, allowing multiple persons to own a defined portion of a building. This legal regime, governed by arts. 712a to 712t of the Swiss Civil Code, is increasingly prevalent in the Swiss real estate landscape. Creating a PPE requires a structured approach and the establishment of detailed rules to ensure harmonious coexistence among co-owners. PBM Avocats accompanies developers and owners through all stages of constituting and managing a PPE, from drafting constitutive deeds to resolving potential disputes, including elaborating rules tailored to each building's specific characteristics.
Steps to Create a PPE
| Step | Main Party | Content / Result | Mandatory? |
|---|---|---|---|
| 1. Division project | Surveyor / architect | Delimitation of private and common parts, plans | Yes |
| 2. Determining share quotas | Lawyer / expert | Distribution in thousandths according to relative value | Yes |
| 3. Drafting PPE rules | Specialist lawyer | Use rights, charges, renovation fund, voting majorities | Strongly recommended |
| 4. Authentic constitutive deed | Notary | Description of building, units, share quotas (art. 732 SCC) | Yes |
| 5. Land register registration | Notary / land registry | Legal creation of the PPE, enforceability against third parties | Yes (constitutive) |
Legal Foundations and Principles of PPE under Swiss Law
Floor ownership constitutes a real property right registered in the land register, allowing each owner to enjoy an exclusive right over a defined portion of a building, while sharing common ownership of the parts used by all. The Swiss Civil Code precisely defines this legal regime, giving it a solid legal foundation.
The exclusive right covers clearly delimited private parts, generally apartments or commercial premises. These parts must form independent units with their own access. Each floor owner has complete freedom regarding the interior layout of their private part, subject to respecting the rights of other co-owners.
In parallel, all parts of the building not assigned as exclusive rights constitute common parts. These typically include:
- The land and surface rights
- Load-bearing elements and the building structure
- The roof and facades
- Stairwells and lifts
- Common technical installations (heating, electricity, water)
- External spaces not assigned as exclusive use rights
Each floor owner holds a share quota of co-ownership over these common parts, generally expressed in thousandths. This share quota determines not only participation in maintenance and renovation costs for common parts, but also the voting weight at co-owners' assemblies.
Standard Content of PPE Rules
| Chapter | Key Points | Practical Importance |
|---|---|---|
| Private and common parts | Exact delimitation, special use rights | Prevents boundary disputes |
| Use rules | Nuisances, hours, Airbnb, pets, works | Maintains quality of life |
| Co-owners' assembly | Frequency, notice, majorities, minutes | Ensures governance |
| Administrator | Appointment, powers, remuneration, term | Clarifies responsibilities |
| Finances and charges | Charge allocation, budget, calls for funds | Avoids financial disputes |
| Renovation fund | Contribution rate, management, use | Preserves the building's value |
| Dispute resolution | Mediation, sanctions, exclusion (art. 649b SCC) | Establishes graduated remedies |
The renovation fund plays a central role in preserving the building's value. Regular and adequate contributions to this fund allow major works to be financed without resorting to exceptional calls for funds, which are often poorly received by co-owners. Establishing such a fund is not mandatory under Swiss law, but is strongly recommended.
Special Use Rights
The rules may assign certain co-owners exclusive use rights over common parts, such as private gardens, parking spaces or cellars. These special use rights, sometimes called exclusive enjoyment rights, must be clearly defined in the rules and ideally mentioned in the land register to be enforceable against third parties.
Current Challenges and Dispute Resolution in PPE
Life in a PPE can generate tensions between co-owners, despite the existence of a detailed regulatory framework. The most frequent sources of conflict concern:
- Non-compliance with rules for using common parts
- Noise or other nuisances
- Disagreements about the appropriateness or financing of works
- Non-payment of charges by certain co-owners
- Unauthorised modifications to private parts
PBM Avocats accompanies co-owners and administrators in the preventive management of disputes, notably through drafting clear and balanced rules. In the event of litigation, we provide in-depth legal analysis and represent our clients before judicial authorities if necessary.
Frequently Asked Questions about PPE Creation and Rules
What are the mandatory steps to create a PPE in Switzerland?
Creating a PPE requires: (1) drawing up a division project by a surveyor or architect; (2) determining the share quotas; (3) drafting the constitutive deed and administration rules by a specialist lawyer; (4) notarisation (authentic form mandatory under art. 732 SCC); (5) registration in the land register. Without land register registration, the PPE has no legal existence. PBM Avocats assists developers and owners in Geneva and the canton of Vaud at every stage.
Is a PPE set of rules mandatory?
No, the rules of administration and use are not legally mandatory. In the absence of rules, the default provisions of the Civil Code (arts. 712a to 712t SCC) apply. However, in practice, tailored rules are indispensable to adapt the regulations to each building's specificities, assign particular use rights (gardens, parking spaces), regulate short-term rentals, organise the renovation fund and prevent disputes between co-owners.
How are PPE share quotas calculated?
Share quotas can be calculated using different methods: proportional value of the units (the most common method), surface area of private parts, or volume of the units. The chosen method must be consistent and mentioned in the constitutive deed. Share quotas are decisive as they determine the voting weight in the assembly and the contribution to common charges. Once registered in the land register, they can only be modified with the unanimous agreement of all co-owners.
Can an ordinary co-ownership be converted into a PPE?
Yes, but this requires unanimity among all co-owners, which can be a major obstacle. The same procedure as for a new PPE must then be followed: authentic deed, land register registration, drafting of rules. In practice, this is why the PPE form is generally adopted from the outset of the real estate project. In cases of disagreement between co-owners, a judicial partition action may be considered, but it is costly and uncertain.
What should PPE rules contain regarding short-term rentals?
In response to the growth of platforms such as Airbnb, PPE rules may include specific provisions: prohibition or limitation of short-term rentals (annual number of nights, mandatory registration), prior notification obligation to the administrator, conduct rules applicable to hosts and guests, sanctions for non-compliance. These clauses must be drafted with precision to be valid and enforceable. Without specific provisions, Swiss case law analyses Airbnb rentals on a case-by-case basis.