What rights do tenants have in a foreclosure auction?

When a property is auctioned off under duress, many tenants wonder: “Do I have to move out immediately?” The good news is: No. Swiss law provides comprehensive protection for tenants, even when ownership changes involuntarily through an auction. Thanks to clear regulations in the Obligations Law (OR) and the Civil Procedure Code, the home is usually preserved, and even in extreme cases, fair deadlines apply. This article details your rights, potential pitfalls, and how to prepare optimally.

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1 Legal Foundations at a Glance

Norm	Content	Relevance for Tenants
Art. 261 OR	The rental agreement transfers to the purchaser ("Purchase does not break lease").	The contract remains valid, all previous conditions apply.
Art. 261 Abs. 2 OR	Termination for urgent personal need.	Notice period: 3 months to the next customary date.
Art. 271 ff. OR	Protection against termination / challenge abusive terminations.	Tenants can call upon the arbitration authority within 30 days.
Art. 133 ff. SchKG	Formal requirements for auctions & information obligations.	Tenants receive official notice of the upcoming auction.

“The legislator wants to prevent tenants, as the weakest link in the chain, from getting crushed. Therefore, protection against termination remains strong even in forced sales.”

2 Rental Agreement: What Happens After the Auction?

2.1 Principle "Purchase Does Not Break Lease"

As soon as the enforcement office grants the auction award, the purchasing party automatically assumes all rights and obligations of the ongoing rental agreement (Art. 261 Abs. 1 OR). This means:

• The existing rent remains unchanged.
• Existing ancillary cost agreements continue to apply.
• The rental deposit must be transferred by the previous landlord to the new one.

2.2 Special Case of Fixed-Term Contracts

If your contract runs for five years or longer, it may be registered in the land register (Art. 216 OR). In this case, early termination is practically excluded, even in cases of personal need, you enjoy maximum protection of tenancy.

3 Can the New Owner Terminate the Lease?

3.1 Extraordinary Termination (Personal Need)

According to Art. 261 Abs. 2 OR, the new owner may terminate the lease extraordinarily if there is urgent personal need for themselves or close relatives. The notice period is three months, effective on the next customary date.

3.2 Ordinary Termination

If the owner misses the extraordinary termination period, the usual deadlines and dates of your rental agreement apply. For apartments, this is typically three months to a customary date (e.g., March 31, June 30, September 30, December 31). You can have each termination reviewed for abuses (Art. 271 ff. OR).

4 Rights of Tenants Before the Auction

1. Right to Information: The enforcement office must inform you of the date and auction conditions in writing.
2. Right to Inspection: You may grant potential bidders access, but only by prior agreement.
3. Tenant Deposit: Remains in a blocked account, no party may dissolve it without your consent.

Can I pay the rent to the enforcement office instead of the landlord?

Yes, if the owner is insolvent and you risk that the rent "disappears," you can deposit it according to Art. 168 SchKG. This protects you from double payments.

5 Rights of Tenants After the Auction

• Payment Address: Until the entry in the land register, the old landlord remains formally your contact. The enforcement office will inform you when to make payments to the new owner.
• Right to Stay for 3 Months Guaranteed: Even with immediate termination for personal use, you have at least three months to find new accommodations.
• Right to Remain During Abuse Review: If proceedings are ongoing before the arbitration authority, you may remain in the apartment until a final decision is made.

6 Economic Aspects for Tenants

A forced auction can also present opportunities:

• Modernization: New owners often invest in renovations, increasing your living comfort.
• Unchanged Rent: As long as no value-enhancing construction occurs, the new landlord cannot simply raise the rent.
• Offer for Rent Back: Some investors may offer you a long-term contract to gain planning certainty.

7 Practical Example: The Meier Family Stays Put

The 4-room apartment of the Meier family in Bern was auctioned off in 2024. Thanks to Art. 261 OR, their rental contract remained intact. The purchasing cooperative did not terminate but renovated the bathroom and kitchen. The rent was only moderately adjusted after the renovation (Art. 269a OR), which was approved by the arbitration authority. Result: higher living comfort, moderate additional costs of 3%. An example that forced sales do not necessarily mean displacement.

8 Checklist for Tenants

1. Keep the official notification in a safe place.
2. Note the date of the auction.
3. If uncertain, contact the Tenant Association or a specialist lawyer.
4. Mark the deadline for challenge to termination (30 days) in your calendar.
5. Check the rental deposit account, monitor the change of account holder.
6. Consider depositing the rent (Art. 168 SchKG).

9 FAQ

Can I participate in the auction myself?

Yes, you may bid. However, you need the performance guarantee required in the auction catalog (often 10% of the appraised value) and a financing commitment from your bank.

What if my apartment is converted into a condominium?

In the case of subdivision into condominiums, Art. 261b OR applies. The new owner can terminate the lease no sooner than three months after registration in the land register, again with personal need and according to the usual deadlines.

Does termination protection also apply to commercial spaces?

Yes, the principles of Art. 261 OR apply accordingly. The new owner can terminate in case of urgent personal use. Notice period: six months (Art. 266d OR).

10 Conclusion: Stay Calm, the Law is on Your Side

A forced auction does not automatically mean losing your home. Thanks to robust termination protection, clear deadlines, and the option to contest any termination, the chances are good that you can continue living in your apartment. Inform yourself early, use your rights consistently, and even an auction can bring positive impulses for your living situation.