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Old 03.03.2011, 16:44
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Urgent:Lease contract--change of mind

Dear All,

On Monday we committed (verbally) and said yes to an agent for an apartment. We were supposed to meet today to sign the papers. In the meantime due to sickness the meeting to sign the papers was postponed to Monday.
However, we changed our mind and now we do not want it anymore.

Please advise on legal/financial implications of calling the agent to tell we do not want it anymore.

Thank You!

(due to urgency I posted it in the Housing section as well, I apologise if this is inconvenient to anyone)
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Old 03.03.2011, 16:47
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Re: Urgent:Lease contract--change of mind

Verbal contracts are binding in Switzerland.
If they do not get another tenant in, you could be liable for lost Rent.
However, given the housing shortage, you may just be liable for a few hundred francs to cover their costs of drawing up the contract etc.

At least call them and let them know. It will lessen the trouble, and some other people who wanted it may be able to get it before they sign on another place.
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Old 03.03.2011, 17:13
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Re: Urgent:Lease contract--change of mind

Here we go again...another foreigner messing an agency around and then everyone wonders why agencies don't want to rent to foreigners.

You are liable to pay whatever penalty is stated on the application form for changing your mind after having said yes but before having signed the lease.

Next time think twice before saying yes.
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Old 03.03.2011, 17:14
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Re: Urgent:Lease contract--change of mind

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Verbal contracts are binding in Switzerland.
If they do not get another tenant in, you could be liable for lost Rent.
However, given the housing shortage, you may just be liable for a few hundred francs to cover their costs of drawing up the contract etc.

At least call them and let them know. It will lessen the trouble, and some other people who wanted it may be able to get it before they sign on another place.
With all due respect Upthehatters, that is simply not true. If the OP has not signed the lease agreement yet they are NOT on the hook for lost rent. They might be on the hook for an admin fee which could be a couple of hundred CHF for the agency having already written out a contract. These charges should be on the application form that was submitted to the agent to apply for the apartment.
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Old 03.03.2011, 17:16
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Re: Urgent:Lease contract--change of mind

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Verbal contracts are binding in Switzerland.
If they do not get another tenant in, you could be liable for lost Rent.
However, given the housing shortage, you may just be liable for a few hundred francs to cover their costs of drawing up the contract etc.

At least call them and let them know. It will lessen the trouble, and some other people who wanted it may be able to get it before they sign on another place.

Total BS. They are not liable for lost rent, no lease was signed. The only financial penalty they are liable for is what is stated on the application.
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Old 03.03.2011, 17:17
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Re: Urgent:Lease contract--change of mind

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Old 03.03.2011, 17:27
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Re: Urgent:Lease contract--change of mind

Unless you have "signed" the contract , it should be ok for you to refuse.

On a side note (as I see he has been awarded lot of red blobs),there can be practical reasons why someone would refuse/reject the contract.
1) uncommon rules regulations in one's contract, which might force one to reject the offer.
2) They usually call you before sending the contract, it could luckily happen that a second agency calls you as well, then its upto you to "choose" from.

It leaves a bad impression though, when you make verbal commitments and take a U turn .

In any case be polite and let them know as soon as possible that you are not interested, they might consider the next candidate. will save time and help someone who desperately needs a home !
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Old 03.03.2011, 17:54
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Re: Urgent:Lease contract--change of mind

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Total BS. They are not liable for lost rent, no lease was signed. The only financial penalty they are liable for is what is stated on the application.
Total BS ? Charming.

It was my understanding that verbal agreements are binding in Switzerland. They are. No BS there.

Should the verbal agreement that they would take the apartment be broken then there is a measurable loss on the part of the agent. Their loss is mesaurable in terms of lost rent. As I said, this may be mitigated by them already having another tenant. Whether or not agencies choose to do this in practice is another story, but the loss for breach of contract can be clearly defined. They were party to the contract the minute they said yes.

So, just which part is incorrect bs there again ?
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Old 03.03.2011, 17:58
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Re: Urgent:Lease contract--change of mind

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With all due respect Upthehatters, that is simply not true. If the OP has not signed the lease agreement yet they are NOT on the hook for lost rent. They might be on the hook for an admin fee which could be a couple of hundred CHF for the agency having already written out a contract. These charges should be on the application form that was submitted to the agent to apply for the apartment.
Isn't that what I said ?

"However, given the housing shortage, you may just be liable for a few hundred francs to cover their costs of drawing up the contract etc."
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Old 03.03.2011, 18:03
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Re: Urgent:Lease contract--change of mind

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With all due respect Upthehatters, that is simply not true. If the OP has not signed the lease agreement yet they are NOT on the hook for lost rent. They might be on the hook for an admin fee which could be a couple of hundred CHF for the agency having already written out a contract. These charges should be on the application form that was submitted to the agent to apply for the apartment.

By verbally agreeing to the contract, it was the same as signing the contract. They are liable for the loss clause in the contract. There is also the notice clause in the contract, which could equate to many 1000's.
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Old 03.03.2011, 18:09
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Re: Urgent:Lease contract--change of mind

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Total BS ? Charming.

It was my understanding that verbal agreements are binding in Switzerland. They are. No BS there.

Should the verbal agreement that they would take the apartment be broken then there is a measurable loss on the part of the agent. Their loss is mesaurable in terms of lost rent. As I said, this may be mitigated by them already having another tenant. Whether or not agencies choose to do this in practice is another story, but the loss for breach of contract can be clearly defined. They were party to the contract the minute they said yes.

So, just which part is incorrect bs there again ?
This is how it works: You sign an application for a rental property, the terms and conditions are on there. It says very clearly that if after you are offered the property and you say yes and then a lease is prepared, after you have said yes, you are liable for a charge. It is an admin fee. It can be anywhere from 40 chf to a few hundred francs. That is all you are liable for, no lost rent. Indeed you have made yourself very unpopular with the rental agency but better to have changed one's mind before signing a lease rather than after. Once you have signed the lease, you are then legally obligated to the pay the rent.
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Old 03.03.2011, 18:21
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Re: Urgent:Lease contract--change of mind

Actually, both views are correct. As there is a clause in the contract stipulating exactly what will happen in the situation that someone changes their mind after having said yes, then that is what applies. If there were no such clause in the contract, then what Upthehatters has said is absolutely correct. That part of Swiss contract law is not mandatory and there can be clauses in the contract, as in this case, that solve the issue differently.

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Old 03.03.2011, 18:23
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Re: Urgent:Lease contract--change of mind

Upthehatters, you are correct that some verbal agreements are binding in Switzerland (not all) and that a rental agreement would indeed be binding if the parties agreed on the terms and conditions. There are however issues which make this virtually impossible to enforce and, as a consequence, rental agreements are virtually never enforced in this way. Generally, by submitting an application for an apartment, the prospective tenant agrees that should he/she be granted the apartment, accepts, a contract is issued, the prospective tenant pulls out then the prospective tenant is liable for an admin fee. No agency would go to court to get the lost rental income as it would mean disproportionate costs and to prove that the parties had in fact agreed to all the terms & conditions and not just those provided for by the law (of which there are many with regard to rentals). You are correct that an agency could indeed sue for lost earnings, but that this is simply not a practical option due to the work and costs involved.

In the present circumstances, I assume that the OP was looking for a practical response and not a lesson on Swiss law.
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Old 03.03.2011, 18:26
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Re: Urgent:Lease contract--change of mind

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This is how it works: You sign an application for a rental property, the terms and conditions are on there. It says very clearly that if after you are offered the property and you say yes and then a lease is prepared, after you have said yes, you are liable for a charge. It is an admin fee. It can be anywhere from 40 chf to a few hundred francs. That is all you are liable for, no lost rent. Indeed you have made yourself very unpopular with the rental agency but better to have changed one's mind before signing a lease rather than after. Once you have signed the lease, you are then legally obligated to the pay the rent.
But according to Swiss Law, verbally agreeing to the lease is the same as signing it. Thus agreeing to rents, notice periods etc. The OP clearly said he had agreed to sign the lease. If there is a clause in the lease that covers not signing it once drawn, then that is another matter, but as neither of us have seen the agreement we couldn't possibly comment, despite what we may have seen on other similar leases or experienced personally.

You haven't seen the lease agreement have you ?
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Old 03.03.2011, 18:34
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Re: Urgent:Lease contract--change of mind

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You haven't seen the lease agreement have you ?
No, but neither did the interested tenants it seems. I would think the only paperwork they completed was an application form. Without this, how on earth were they accepted as tenants?

This is the wording on p2 of the HEV application form which covers situations when one changes their minds. Most agencies have their own forms but use similar wording.
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Old 03.03.2011, 18:41
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Re: Urgent:Lease contract--change of mind

My point Mrs D , was merely taking slight offence to your reaction and groan. I stand by my legal interpretation, and replied on the facts given by the OP. I was not in any position to assume knowledge of the contents of the agreement, merely that he was bound to it. Legally speaking , the agency have a strong case. I qualified my answer with the likely outcome of the OP just having to pay a few hundred francs. That was my position. I respect your knowledge of the Market and of similar agreements, but perhaps your reaction to my reply was a bit OTT ?

I mean, in shorter words , it wasn't "Total BS" was it ?
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Old 03.03.2011, 18:49
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Re: Urgent:Lease contract--change of mind

You cannot verbally sign a contract you haven't physically seen/doesn't physically exist, hence you are liable for the admin fee of drawing up the contract, but not liable for the loss of earnings contained IN the contract.
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Old 03.03.2011, 18:51
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Re: Urgent:Lease contract--change of mind

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My point Mrs D , was merely taking slight offence to your reaction and groan.
I am in the business of helping foreigners find housing, and it is not getting any easier. Now I am not saying that Swiss persons don't change their minds, of course they do. I have had clients change their minds too, but this is rare. I am the first one to advise a client that if they have serious misgivings about a property, they should back out before signing a lease.The penalty has only ever been what is stated on the application they have completed.

In this case, I assumed the OP had completed an application. In my experience there always is one.
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Old 03.03.2011, 18:55
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Re: Urgent:Lease contract--change of mind

Thank you All for your valuable feedback.

Details on the situation:

We filled in an application and signed it.

We then on the phone confirmed we will take the apartment.

The agent said OK she will draft the contract, then meet to sign it.

SO... it looks like a hybrid situation here...
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Old 03.03.2011, 19:00
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Re: Urgent:Lease contract--change of mind

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You cannot verbally sign a contract you haven't physically seen
Not quite, if the agent said 'would you sign the lease ?' and the renter said yes, you are effectively agreeing to the terms of the lease. Hard to swallow, but true.
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