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Please set subtitles in English.

Different types of ownership

In Switzerland and in Geneva, there are several regimes for property. Most of flats and new apartments are for sale in PPE.

PPE

PPE is the abreviation for propriété par étage (condominium ownership). Condominum ownership is regulated in the Swiss Civil Code and the relevant provisions entered into force on 1st January 1965. As a buyer of a condominum ownership, you will be co-owner of the building and have an exclusive right to your condominium unit.

The condominium unit is drawn in the distribution booklet and gives the condominium owner exclusive rights.The distribution booklet is established by an official surveyor. It is sent to the land register and the cadastre and a sheet is created for each unit. You will be listed on this sheet as the owner of the unit.

The common parts of the building are subtracted from the exclusive right of the individual condominum owners and you will be co-owner of the common properties.

SIAL

Some older apartments are for sale in SIAL. SIAL is the abreviation for Société Immobilière Actionnaire Locataire (property company shareholder-tenant).The property company is a compagny limited by shares within the meaning of the Swiss Code of Obligations. The purpose of the company is to rent apartments to its own shareholders-tenants.

You therefore purchase a share certificate and have the exclusive right to rent a specific apartment. You sign a lease and a membership agreement with the company. You are bound by the company's articles of association. You have the right to sublet your apartment without the consent of the company. The transfer of shares must be approved by the administrative board and recorded in the share register and on the share certificate. A sale of shares is not a sale of real estate, because the Real Estate Company is registered as an owner in the land register and the sale is made by the transfer of the shares.

To obtain a credit, the shareholder may pledge the share certificate and the share of the unsecured receivables related thereto. Interest on credit is higher than interest on a traditional mortgage. Costs and expenses are allocated according to the number of shares held by each shareholder.

PPA or SIAL-PPE

Some apartments are sold as SIAL-PPE (Société Immobilière Actionnaire Locataire Propriété Par Etage), i. e. as a property company owned by shareholders who rent condominium untis or as a property owned by shares, PPA (Propriété par Actions). The ownership of a block of shares is linked to the share of unsecured receivables. The shareholder has a lease right and an exclusive right to his floor unit. The shareholder's loan is secured by the registration of the real estate pledges by the company on the condominium unit against the deposit of the shares of the unit with the company. The Board of Directors shall determine the pledge value. The costs resulting from this method of financing are to be borne by the shareholder concerned. In the event of forced realization of the unit, the shares are cancelled. If the unit is not encumbered by a pledge, the shareholder may request a credit against a pledge of the shares. Social contributions are divided according to the number of shares and co-ownership charges according to the number of thousandths of co-ownership.

Housing cooperative (property type co-op)

You are buying a certificate of participation from a cooperative and not an apartment. You can buy a share of a cooperative and as a member of the cooperative you can rent the condominium unit at a low rent and the cooperative remains the owner of the building.

The form of the contract

A sale of condominium ownership is only valid if it is concluded in the form of a notarially recorded instrument or deed. In Geneva, it is the notary who must draw up an authentic deed.

A sale of shares is not a sale of real estate, because the Property Company is registered as an owner in the land register and the sale is made by the transfer of the shares. The purchase of a cooperative's certificate of participation is not a real estate purchase either. Since the sale of the shares does not require an notarially recorded instrument or deed, there are no transfer fees and notary fees to pay.

 

© Written and translated by Esther Lauber, Real Estate Trustee with Advanced Federal Diploma of Professional Education and Training, real estate broker
Legal terms taken from the portal of the Swiss goverment (Swiss laws), partly translated from French to English with DeepL and corrected by me, in case of doubt, the French or Germain version should apply