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The different types of managment contracts

The real estate management is reponsible for rental management, but also for the management of other contracts related to real estate, such as the managment of condominium real estate, property companies or building rights. This article mainly deals with the management of rental properties. All property management contracts must be negotiated individually.

Rental management property

The content of the rental management contract can be structured differently depending on the type of property being managed. Among others, the following types of real estate can be distinguished:

The rental property

For example:

  • Residental buildings
  • Commercial buildings
  • Mixed buildings
  • Craft buildings
  • subsidised properties
  • Cooperative properties
  • etc

Plot

Storage space on the plots in industrial area can be rented to companies, often to construction companies

Individual properties

A management mandate can also be given to a management company for individual properties such as villas, flats, commercial and craft premises, garages,etc.

We manage all types of rental properties in the canton of Geneva.

The legal basis

In Switzerland, contracts are governed by the Swiss Code of Obligations. A property management contract is legally a mandate. The mandate is regulated in the 13th title of the Swiss Code of Obligations.

The form of the contract

The mandate is not subject to the observation of a particular form and may be concluded orally. In practice, however, a written contract is usually concluded.

Brief overview

The management agreement is more or less structured as follows:

  • The contracting parties, the principal and the agent
  • Description of the property to be managed
  • The beginning of the contract, for a fixed or indefinite term with renewal clause
  • The detailed description of services
  • The scope of the mandate
  • Fees (basic fee, special activity fee, variable fee)
  • Power of Attorney
  • Amount of competence
  • Dates of the accounts and annual accounts closing
  • Special clauses
  • Applicable law and place of jurisdiction

Details to be settled

The services

In order to avoid misunderstandings, it is advisable to list in detail the services included in the basic fee and those to be invoiced in addition.

In principle, an ordinary management mandate includes:

  • Basic management
  • Financial management
  • Administrative and rental management
  • Technical management

Are generally not included:

  • Fees for the work (repairs, renovations, etc.)
  • Finding a tenant
  • Lease renewal and transfer
  • The sale of the tenant's property
  • Extraordinary events
  • Market research and performance analyses
  • Representing the owner in courts
  • Procedures for proceeding and bankruptcies and evacuation
  • Translation costs

The setting of fees

Most rental agencies set a basic fee that includes ordinary management and is calculated as a percentage of the rental income. Services not included in the basic fees are charged as a percentage, e.g. on work and for finding a tenant, and an hourly rate, e.c. for legal proceedings. Fees and commissions are subject to VAT.

 

 © Written and translated by Esther Lauber, Real Estate Trustee with Advanced Federal Diploma of Professional Education and Training, real estate manager in Geneva
Partly translated from French to English with DeepL, in case of doubt, the French or Germain version should apply

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