Lex Koller: Temporary extension to commercial real estate?

In order to prevent distressed companies from having to sell their business properties cheaply to foreign private individuals or companies, the National Council committee responsible wants to temporarily adapt the "Lex Koller" in the Covid 19 pandemic and extend it to commercially used properties. The commission passed a parliamentary initiative to this effect by 22 votes to 0 with 2 abstentions. The initiative will now go to the Legal Commission of the Council of States for consideration. It remains to be seen how the Legal Commission of the Council of States and - if the initiative is adopted - the Swiss Parliament will position themselves on this matter.

If the initiative is accepted and the amendment to the law is declared urgent, it could be passed by the Swiss parliament and put into force within a few months, comment lawyers of the law firm Lenz & Staehelin on the news portal Mondaq.com.

They point out that a special situation under Article 6 of the Epidemics Act has applied in Switzerland since June 2020: the amendment to the Lex Koller called for by the committee initiative would therefore prohibit the direct acquisition of business properties by persons abroad for several years; the applicability of the Lex Koller would also have to be closely examined in every case of M&A transactions leading to an indirect acquisition of business properties through the purchase of corresponding company shares, especially if properties requiring a permit (i.e. now also business properties) account for more than one third of the assets of the target company.This applies in particular if real estate subject to approval (i.e. now also commercial real estate) accounts for more than one third of the target company's assets.

According to the agenda of the Legal Commission of the Council of States, the topic "Temporarily extend the permit requirement under Lex Koller to permanent establishment properties" is to be dealt with at the meeting on Monday, February 22, 2021.

In the real estate industry, the initiative meets with little understanding. "By tightening up the Lex Koller, Swiss companies are being harmed. If a company has a liquidity bottleneck due to Corona, it should be helped first and foremost with loans. If this is not possible, one should not also reduce the circle of potential buyers by excluding foreign buyers," says Beate Lichner, MRICS, managing director of Lichner Projects GmbH. "Could it be that 'Corona' here is a pretext to make the tightening of Lex Koller a general issue again? Honi soit qui mal y pense!"