We're on the cusp of selling our apartment, but are in a bit of strange position. Essentially the buyer wants to take ownership on the 1st November (via Notary) and begin refurbishments for the entire month (painting, redoing Parquet etc..) but full payment will only be made by his bank on the 30th November. Our estate agent mentioned that his funds will only become available around that date, but he's willing to leave a deposit of CHF 10k as a sign of goodwill.
The agent doesn't seem to think there is an issue, as long as his bank guarantees the payment. And when we called our current mortgage provider (UBS), they thought it was a little odd, but nevertheless said it was up to us. However our advisor did say that 10% is the usual deposit.
I know Switzerland is a very trust based country, however I am not sure I am entirely comfortable with this arrangement. I would however like to remain tactful since he's the first serious viewer in 4 months and since the apartment is empty we just want rid
Basic question is could things go wrong? or is a guarantee from his bank... as good as money in the bank?
Sounds like my grandmother who wanted to do some gardening work! She removed 10 trees & dug a hole for a swimming pool the sellers were not amused however she paid as agreed.
What can go wrong is the sale does not go head, however if they have improved your apartment it's their loss & your gain.
I would want clarification from the bank as to what "guarantees" means. Does it mean that they have only seen the funds and know they are available to be paid upon the pay date? Or does it mean that if the buyer walks away they will still make him pay regardless?
A down payment is not binding, people can walk away (and get the 10k back) - we've seen it happen on the forum before. I can understand you wanting to sell, but if UBS thinks it's a bit strange that would be a red flag for me.
I don't think he should take ownership till he pays on 30th, in any case any outstanding mortgage is with the property assuming you have one. Allowing access is not so unusual as it's easier to redo a kitchen, bathroom, central heating or flooring when the flat is empty.
I would be more comfortable with giving him a set of keys to do his stuff for the month of Nov, but transfer of ownership only happens on the 30th Nov after the funds have cleared into the UBS coffers.
Edit: I would actually be happy to pay for some legal advice, any idea who I should go to? When we were looking to buy and asked the same question, most people just laughed at us? why would you need a lawyer for something so straightforward, just ask your bank whether x, y, z is OK.
Personally prefer clean deals. In these days one never knows what can come around the corner. Agree on a date for the sale and transfer of title and he can start the work then. I would probably allow some leeway with access for the planning. You might be hurting a little right now sitting on an empty property but just think of the consequences for you if the deal falls through. Cash is king in times like this, a promise is nothing more than that and a bank guarantee is not much more than a promise that the buyer is qualified for a mortgage. It is no guarantee that the deal will close. Also look very closely at the wording of the contract regarding the deposit as you would probably have to return it if the buyer can't close.
Go to the notary who is assigned to handle the transfer. Don't trust your real estate agent on these issues. The notary would be in the best position to advise you of your rights and you wouldn't have to pay an extra lawyers fee.
edit: you will most likely have to pay an additional fee to the notary for this advice.
I would avoid going to the Notary who is getting paid due to the sale, he does not act for you, you need to go to another person, if your looking for independent advice, it's worth paying real money for..........
Here are the details of the lawyer we used 8 yrs ago to buy in BL and last year to sell. In both instances agreement to sell was months in advance of the actual sale (and when we purchased we were allowed into occupation 2 months before transfer) so he will draft particular clauses accordingly. With my professional hat on (I am also a property lawyer) I would recommend him most warmly (plus he speaks good English and has a quick turn around .. can't say that of all lawyers can you? )
Perhaps it is different in Basel canton? The notaries I've dealt with in Luzern and Schwyz are bound by law to represent both parties. We did hire a outside lawyer to represent us with our 1st purchase and he did not give us any additional value for our money. It just simply cost us more money. All legal advice we received from the lawyer we could have easily obtained from the notary. If you are looking at complicated real estate contracts I would agree that independent advice would be wise but it sounds to me like this is a straight forward standard real estate contract.
Another point to consider... in our case in Luzern we could not pick our own notary, he was assigned which was why we didn't feel 100 % comfortable with the representation and so hired another lawyer. I do think this varies from canton to canton.
BTW we did pay him very real money so now that I know better next time I'll make sure the notary gives me full value for their fees.
Mmhhh. Not strictly true. The notaire will draft a standard form contract and attempt to include any special conditions you may have agreed. The notaire will similarly explain the effect of all the clauses. A notaire acting for both parties will not however extrapolate from this and explain/advise you why a certain clause is not ideal/suggest something else that would be better as this would be a conflict.
In a straightforward purchase, it is most likely that a lawyer acting solely for you will make very little amendments if at all. But that is not the extent of their job. They will also investigate title, obtain background and ancillary information about your property including, for example, such issues as previous land use, argon gas risks etc.
Maybe I am biased but I wouldn't feel comfortable buying or selling without at least having had an independent lawyer working just for me to look at the contract and look at the property and title. If you define well their role, in money terms, it need not be too expensive either (a few hundred francs).
I remember to objecting to about half the clauses in a property sale document, the notary said most did not mean anything, so I said then remove the clause!
They also wanted me to agree that the protection of the law did not apply...... Apparently Phil_MCR accepted that clause.
We were in a similar situation to the buyer in your scenario, and were not allowed to access the property before the full funds were transferred. For us, actually the seller was happy for us to have the keys to commence painting the walls etc, but it was the agent who insisted that this did not happen.
There is a potential insurance implication if something happens (anything - accidentally caused by the renovation works, or just a random event), which could mean that the owner (ie the Seller) is not covered by the insurance for the house if he has given permission for the buyer to go in before ownership transfers.