Property sales contracts – key tips

Once a sale has been agreed, the buyer and seller need to draw up a sales contract. In contrast to buying a car, for example, property sales contracts have to be notarised and declared to the land registry in order to be legally effective.

If you’ve ever bought or sold a property, you’ll be aware of all the work, and more precisely paperwork, that involves. In Switzerland, property sales are only legally valid if the relevant contract has been authenticated by a notary. But what exactly does that mean?

It means that it is not possible to just make a verbal agreement or to buy/sell a property without a notarised written contract. The notarisation itself means that both the buyer and seller have to sign the contract at a notary’s office in the presence of a notary. The notary will subsequently declare the change in ownership to the relevant land registry. Once the change in ownership has been recorded and published by the land registry, the property sale will have been officially completed. To help you avoid unpleasant surprises, we’ve put together some key tips for navigating this process.

Key elements to include in a sales contract

Normally, the sales contract will be drawn up by a notary. However, it is still important for both parties to read it carefully and make sure it covers everything. Some of the key elements it should contain are:

• Both parties’ names and addresses
• Detailed description of the property: Address, cadastral reference, unit or apartment number if the property is an apartment, any parking spaces and/or garden/land that belong to the property
• Purchase price
• Type of property ownership (sole, joint, co-ownership)
• Division of fees and taxes
• Payment terms and conditions
• Key handover date
• Easements
• Any documents, such as the building specifications, that form part of the contract
• Provisions covering what happens if one of the parties fail to comply with the contract

Definitely double-check the names and addresses and, ideally, write down everything that needs to be changed on behalf of both parties and send all of the changes to your notary’s office in a single document. This will minimise any extra costs.

The notarisation process

Once all of the details of the sales contract have been amended as needed, the buyer and seller need to agree a date with their notary to witness the signing of the contract. On this date, the notary will be required to read out loud the entire contract and make sure each clause is clear, valid and understood by all parties. The seller and buyer will be asked to stop the notary at any time if there is anything they are not sure about. Once this process has been completed and there are no more questions, the contract will be handed to the buyer and seller to sign. This will finalise the sale and make the buyer liable to pay the purchase price.

Once signed, the notary will send the original contract to the relevant land registry office. It usually takes about two weeks for the change in ownership to be recorded in the land registry. Once this has been done, both of the parties will normally be sent a copy of the deeds by their notary.

Division of fees

All of the services provided by the notary, land registry office and others will, of course, need to be paid for. Hence, it is important to set out who is paying for what in the sales contract.

• The notary fees and property transfer tax (only payable in some cantons) are normally divided between the parties. This also normally applies to the land registry fees.
• The cost of producing the mortgage certificate is usually borne by the purchaser,
• and the capital gains tax and estate agent's fee by the seller.

Make sure to find out all about these additional costs as early as possible and include them in your budget. The notary’s fees in particular will depend on the property’s purchase price and the higher that price, the higher those fees. For more information about selling and buying a property, take a look at our free Engel & Völkers Guide.