The right of first refusal: When do you have an advantage as a buyer?

Those involved in foreclosure auctions often think of spectacular price discounts, but real insider advantages often lie in the right of first refusal. Co-owners, land lessees, or even municipalities can take over a property after the auction bid is awarded, without entering the stressful bidding war. This article shows you when this works, how to assert your rights at the auction, and why the process ultimately provides security for all parties involved.

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1 Legal Foundations, Key Articles

Regulation	Topic	Impact in Foreclosure Auction
Art. 681 f. ZGB	Statutory rights of first refusal (co-ownership, land lease, peasant land rights)	Explicitly right of first refusal also applies in foreclosure auction
Art. 216c OR	Contractual rights of first refusal	Excluded in foreclosure auction
Art. 30 Abs. 4 VZG & Art. 139 SchKG	Special notification to entitled parties	The office informs you in time about the date & modalities
Art. 60a VZG	Exercise at the auction	Right can only be exercised immediately and under the same conditions

“Regarding statutory rights of first refusal, the rule of thumb is: He who has rights must be present. Only those who attend the auction can effectively utilize it.”

2 What Types of Rights of First Refusal Exist, and Which Apply?

2.1 Statutory Rights of First Refusal (always permissible)

• Co-owners according to Art. 682 ZGB
• Land lessors/lessees (independent and permanent land lease)
• Peasant land rights (BGBB, e.g., rights of first refusal for relatives)
• Public law rights of cantons/municipalities (e.g., preservation zones)

All these rights can be exercised at the auction, the debt collection office sends you a special notification so you know when to appear.

2.2 Contractual Rights of First Refusal (usually no advantage)

Contractually agreed rights according to Art. 216c OR do not expire, but they cannot be exercised at the foreclosure auction, meaning you cannot "retroactively" take over the hammer price.

2.3 Exceptions & Gray Areas

• If the entire property is auctioned and not just a share of co-ownership, a co-owner cannot assert their rights.
• In the case of a double call (call with/without registered right of first refusal), the office can delete the subordinate contractual right if the outcome would be better for the creditors.

3 How to Exercise Your Right of First Refusal at the Auction

1. Wait for special notification: The date, property data, and minimum deposit are included.
2. Attend the auction: Physical presence or video participation (if permitted).
3. Provide security deposit: identical to a regular bidder (usually 10% of the estimated value).
4. After the hammer strike, you must report immediately to the auction officer and state your exercise in writing (Art. 60a Abs. 3 VZG).
5. Pay purchase price within the deadline set by the office (often 20 days).

Practical Hack: What if I arrive late?

If you miss the call, your right is gone. Restoration of the deadline is only possible in cases of unavoidable delay (Art. 77 ff. ZPO), which is extremely rare! It's better to send a representative.

4 Your Advantages as a Right of First Refusal Holder

• Price cap: You buy exactly at the bidding price, not a cent more.
• No bidding stress: You can observe the competition and strike at the end.
• Planning security: Banks prefer to finance when you can secure the property.
• Risk minimization: You take over a already vacated and legally secure property.

5 Limits of the Right of First Refusal Advantage

• Cash requirement: No participation without a 10% deposit.
• No price negotiations: Conditions are fixed, defects or liabilities cannot be deducted later.
• Reservation of public rights: Municipalities with their own right of first refusal (e.g., preservation zone § 64 PBG ZH) can outbid you.

6 Practical Example: The Quiet Winner

Anna owns a 40% co-ownership share in a holiday villa in Graubünden. The majority wants to sell, but they dispute, leading to a judicial foreclosure auction. Anna provides CHF 80,000 as a security deposit, waits, and exercises her statutory right of first refusal after the hammer strike (CHF 1.9 million): she takes over all shares at the hammer price. Her advantage: No bidding poker, fair market price, and immediate sole ownership. The bank finances 70% because the property is already free of encumbrances.

7 Checklist for Future Buyers with Right of First Refusal

1. Archive the special notification early, marking the date & deadlines.
2. Have the deposit money ready (10% of the estimated value).
3. Secure financing commitment from the bank before the auction day.
4. Contact the debt collection office to clarify if online participation is allowed.
5. Inspect the property & check reports (no negotiation possible later).
6. Prepare a power of attorney for a representative (if you are unavailable).

8 FAQ

Can I still exercise my statutory right of first refusal after the auction?

No. Art. 60a VZG requires the declaration during the auction, after that the window is closed.

Does my contractual right at least apply in private sales?

Yes. Once the office switches to private sales (e.g., in case of missing bids), the right of first refusal is fully effective again.

I am a land lessee, do I still need to pay a deposit?

Yes. Those entitled to the right of first refusal must also provide the same security deposit as all bidders, otherwise exclusion is threatened.

9 Conclusion: Your Right, Your Advantage

The right of first refusal is not a stumbling block but a premium option for well-informed buyers. Statutory rights allow you to take over the property safely and at a fair price, while contractual rights may be paused but remain valid long-term. Those who know the rules turn Swiss foreclosure auctions into a chance with built-in discounts, and that is where your decisive advantage lies.