Image: FABRICE COFFRINI / AFP
Image: FABRICE COFFRINI / AFP

COVID-19 Commercial Rents Law Complies with Constitution

The COVID-19 law on commercial rents is compatible with the Federal Constitution. A new legal opinion from law professor Felix Uhlmann confirms this and therefore contradicts the Association of Landowners.

On October 29, 2020, the National Council will consider the COVID-19 Commercial Rents Act. This law provides for a basic rent reduction of 60% for the period of the closure ordered by the authorities last spring.

Economic freedom and the guarantee of property remain intact

Via Dr Peter Karlen, committee member of the city of Zurich section, the Landlords Association criticizes the retroactive effect of the law on commercial rents and claims that it violates economic freedom and the property guarantee.

Such concerns are unfounded. This is the conclusion of a legal opinion by independent law professor Felix Uhlmann, commissioned by GastroSuisse and other professional associations. The renowned specialist in constitutional law at the University of Zurich considers that the planned law is constitutional and sees no unacceptable retroactive effect, especially since civil law leaves room for such interventions in contracts. Furthermore, it is a tendency for private law provisions to be to the detriment or in favor of one or the other party. The inadmissible encroachments on economic freedom and the guarantee of property do not appear, even with regard to the envisaged distribution key. On the contrary,

No alternative to reducing the rent

Due to the epidemiological crisis, small and medium-sized enterprises find themselves in a situation which threatens their existence. With the second wave, the situation worsened considerably. In many places, financial reserves have been exhausted and regulation of the situation is more than necessary. So far, around 65% of companies have not been able to find a solution with their lessor and would, without a political solution, be forced to initiate lengthy and costly legal proceedings. There is a threat of a tsunami of process and court overload.

The law on commercial rents is in line with the Federal Constitution and is urgently needed: it leads to a fair distribution of the burden of risk between landlords and tenants, creates legal certainty and relieves the pressure on the courts. Parliament now has a duty to walk the talk and make a commitment to small and medium-sized enterprises.