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Old 10.03.2011, 11:29
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Terminating A Verbal Contract - Pachtvertrag

I'm pretty sure this one will likely need to be filed under 'crazy even to consider it', but given that there is nothing on the market at all crazy is what I've been reduced to these days...

I saw a farmhouse the other day - total wreck, will require at least as much as the purchase price again to renovate it, draconian cantonal regulations as to what can or cannot be done - in other words, all the usual issues surrounding purchasing in the Landwirtschaftzone.

However, it is a nice piece of land.

But, it turns out that about half the land is currently Verpachtet. There is a hen house, and the person who is using it has built runs on that part of the property - from the size of it, I'd guess it's quasi-commercial. According to the agent, the Pacht agreement is a verbal one between the owner (deceased, so I guess now the heirs) and the other farmer, and theoretically can be terminated at any time.

(Cue alarm bells ringing...)

First, does a verbal agreement like this survive the sale of a property - that is, would a buyer be obliged to continue the agreement?

Second, in real life, how difficult are these things to terminate? I remember a case that was reported in the local paper a few years ago, where a family was given notice canceling their (written) Pacht contract, requiring them to move from the farm... they contested the Kündigung for years, arguing loss of livelihood - all the way to the Bundesgericht. It ended with the police having to forceably remove the family. Not pretty - and not something I'd ever want to get mixed up in.

Third - how does one cancel a verbal contract?

The only way I'd consider going forward would be to make the cancellation of the Pachtvertrag a condition of sale, to put the onus on the sellers. If the other farmer is not gone by the handover date, then no sale. Is that possible, given the Swiss property law?

As I understand it, the hen house belongs to the property, but the other farmer put in the runs. Assuming that the Pachtvertrag can be cancelled - would the purchaser be required to compensate the other farmer for the cost of taking out the equipment? Any other liabilities I should worry about?

Any insights would be much appreciated.
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Old 10.03.2011, 11:32
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Re: Terminating A Verbal Contract - Pachtvertrag

I am no legal expert, but I do not think verbal agreements are the same as covenants which survive in perpertuity regardless of ownership The verbal agreement is in effect permission from the person that gave it , the owner, "Mr X" , if "Mr X" no longer owns the property, all permissions fall away.

Seriously though. Get proper legal advice.
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Old 10.03.2011, 11:42
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Re: Terminating A Verbal Contract - Pachtvertrag

this may be of help to you, although it is based on US common law

http://en.wikipedia.org/wiki/Nonposs...terest_in_land
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Old 10.03.2011, 11:47
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Re: Terminating A Verbal Contract - Pachtvertrag

This is actually just an empty form for a contract, but it might help if you can cope with the German. I'll keep looking - but the vacuum cleaner is looking a bit sad and needs taking for a walk round the flat...
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Old 10.03.2011, 13:49
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Re: Terminating A Verbal Contract - Pachtvertrag

Longbyt, that's brilliant - thanks so much.

Hmmm... so there is a basic federal law governing landwirtschaftliche Pacht:

"Wird der Pachtgegenstand veräussert oder dem Verpächter im Schuldbetreibungs-
oder Konkursverfahren entzogen, so tritt der Erwerber in den Pachtvertrag ein.
(Art. 14 LPG). Ausnahmen sind in Art. 15 LPG enthalten
."

So a Pacht agreement does indeed survive a change of ownership, with a few exceptions.

If a new owner does not want to continue the Pacht arrangement, notice has to be given within 3 months of the sale - and the Kundigungfrist is a minimum of 1 year from the usual spring or autumn termination period. However, the tenant farmer has 30 days from receiving notice to contest it. A judge can extend the lease for anywhere from 6 months to two years if terminating the contract would result in a hardship for the tenant, or if the new owner's interest in the land is not justified.

A tenant farmer who has had the land for at least 6 years also retains right of first refusal on the land - so until that is offered and refused a new buyer could be in for some surprises.

---

Spoke with a colleague who is a lawyer - albeit a financial type, admittedly not an expert in Landwirtschaft issues - and he said off the cuff:

That the agreement is verbal, not a written Pacht contract, makes things complicated, but...

In the case of a dispute, the right of a long standing tenant to continue running his chicken operation i.e., pursue his livelihood, will trump my right to raise my herd o' collies on my land. In fact, if my collies proved distressing to the chickens, the tenant might have the right to demand that I get rid of my mutts.

If a case went to court, both law and public opinion are usually on the side of the local farmer, not the furriner/city slicker who is trying to make changes to a long standing way of life.

Bottom line advice: Tread carefully.

---

Alarm bells clanging incessantly now.... back to the drawing board...

Thanks for the help, one and all.
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Old 10.03.2011, 14:15
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Re: Terminating A Verbal Contract - Pachtvertrag

If you don't already have it, legal insurance springs to mind as a good thing to have if making such a purchase.

We added it to our Zurich 'Relax' policy for about CHF120/year when a neighbour started to look ugly a few years back. Never needed to use it, but it was good to know it was there in case...
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Old 10.03.2011, 14:49
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Re: Terminating A Verbal Contract - Pachtvertrag

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If you don't already have it, legal insurance springs to mind as a good thing to have if making such a purchase.

We added it to our Zurich 'Relax' policy for about CHF120/year when a neighbour started to look ugly a few years back. Never needed to use it, but it was good to know it was there in case...
Good idea, but..... read the small print. Our legal insurance for example specifically excludes matters related to property deals. It was in the mice type...
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