KMU-Magazin Nr. 6, Juni 2026 Condominium ownership: What business owners need to know

With condominium ownership, it is not just the value of one’s own unit that determines the value of an investment. Regulations, renovations, renovation funds and decisions taken by the condominium association can be just as important to business owners as location, price and possible uses.

Many regard condominium ownership as a form of private housing. For business owners, however, it is much more than that: it is a capital investment, a business premises, a financing object, part of a pension plan or a component of a succession plan. Anyone who owns a practice, a studio, an office space, an apartment for employees or an investment property under condominium ownership, operates within a legal framework that is often underestimated in day-to-day life.

Swiss condominium ownership is governed by the Civil Code and distinguishes between the exclusive right to specific rooms and the collective ownership of parts such as the roof, façade, staircase or technical rooms. Exclusive rights include, for example, one’s own residential or commercial premises, whilst balconies, car parks or heating systems, for instance, are frequently used collectively. This legal structure provides flexibility on the one hand, but also harbours the potential for conflict in practical implementation.

The reason is simple: with condominium ownership, one does not simply own “a flat” or “a room”. One holds an exclusive right to specific rooms and, at the same time, a share in the entire property. The roof, façade, staircase, pipes, load-bearing structural elements, surroundings or heating system are generally held in collective ownership. This means that every major decision becomes a matter for the condominium association. This is precisely where, in practice, most conflicts arise.

Renovations

Many properties under condominium ownership are getting on in years. Roofs, facades, windows, heating systems and pipes are reaching the end of their service life. At the same time, requirements regarding energy efficiency, fire safety, charging infrastructure and sustainability are increasing. For business owners this is relevant because renovations can tie up liquidity, affect returns and complicate investment decisions.

A classic example: within a condominium association, discussions are held regarding the replacement of an oil-fired heating system, the installation of a heat pump or the fitting of a photovoltaic system. From a technical and economic perspective, this may make sense. Legally, however, the right resolutions, clear responsibilities and sound financing are needed. If there is not a sufficiently funded renovation fund, there is a risk of high special contributions. For owners who hold several units or use the premises for business purposes, this can quickly become a significant burden.

SMEs in particular should therefore not wait until they receive the invitation to the condominium owners meeting to take a closer look. Anyone buying or owning a condominium unit should check the regulations, minutes, maintenance plan, renovation funds and any ongoing disputes. These documents often reveal more about the actual value of a unit than the glossy brochure.

Living, working, letting

The use of the property is also increasingly raising questions. Home offices, small service businesses, therapy rooms, short-term lettings or mixed-use units do not always fit seamlessly into existing regulations. What goes unnoticed by outsiders can be perceived as disruptive within the condominium association: customer traffic, noise, deliveries, signage, increased wear and tear on collective parts or security issues.

It is crucial for business owners to check, before making a purchase or changing the use of a property, what the regulations permit. Not everything that is permitted under public law is also permitted within the condominium association. Conversely, regulations that are too restrictive can limit business flexibility.

The following questions will help with this assessment:

• Is the planned use (e.g. practice, agency, studio, short-term lettings) explicitly mentioned in the regulations or at least clearly covered by them?
• Do the regulations, the house rules or supplementary agreements contain specific provisions regarding customer traffic, opening hours, delivery traffic, signage and advertising in or on the building?
• Do the minutes of past condominium owners meetings contain any references to conflicts arising from similar uses?

Anyone wishing to use a unit as a business premises should carefully clarify these questions in advance and, if in doubt, ensure that they are explicitly regulated.

Condominium association

Condominium associations function in a certain sense like small businesses: there are resolutions, budgets, responsibilities, majorities, minutes, administration and potential for conflict. Nevertheless, they are often run in a surprisingly informal manner. This comes back to haunt them particularly in the case of major renovations, insurance issues, construction defects or owners who fail to meet their obligations.

From a business perspective, it is worth taking a professional look at the administration:

• Does the administrator have the necessary professional qualifications?
• Are quotations obtained carefully?
• Is there a multi-year plan for maintenance and investments?
• Are the minutes complete and comprehensible?
• Are resolutions passed correctly?
• Is the renovation fund managed strategically?

A well-managed condominium association protects the value of the property. A poorly managed condominium association can diminish it.

Law revision

The current law on condominium ownership dates back, in essence, to the 1960s. Since then, the real estate market has changed significantly. Condominium ownership is now a mass phenomenon, a form of investment and often also part of complex new building projects. A revision is therefore underway. One of the triggers was the motion “55 Years of Condominium Ownership. Time for an update”, which the Parliament referred in 2019.

The Federal Council is not proposing a complete reform, but rather selective amendments, which are intended to improve the practicality of the law on condominium ownership. The revision concerns, amongst other things, issues relating to the division plan, the establishment of condominium ownership prior to the construction of the building, condominium ownership under building law, the renovation fund, construction defects as well as measures against obstructive or non-paying owners. Of particular interest to business owners are three points:

• The establishment of condominium ownership in new building projects is to be regulated more clearly. This is important because many units are sold “off-plan”. This is precisely where ambiguities often arise, when plans, building specifications and the actual construction do not match exactly.
• The financing of long-term maintenance is coming more into focus. In many condominium associations, the renovation fund is too small or non-existent. For investors and SMEs, this is a warning sign: a low monthly charge can be misleading if it means you’ll face high renovation contributions in a few years’ time.
• The revision is intended to improve the handling of difficult owners. In practice, individual persons can block important resolutions or place a burden on the entire condominium association through outstanding contributions. If the law provides more precise tools in this regard, this will improve the condominium association’s ability to act.

Even though the revision does not entail a change of system, business owners should make use of the transition phase. It makes sense to review existing regulations and templates of resolutions to determine whether they are in line with the new legal requirements or whether there is a need for adjustment. Those who plan adjustments to regulations early on and seek expert guidance can make targeted use of the new scopes, rather than having to react under time pressure.

What SMEs should do in practice

Anyone who owns a condominium unit should not regard the condominium owners meeting as a mere formality. It is important to have an up-to-date analysis of the property’s condition, a realistic maintenance plan and transparent financial planning. Companies should clarify internally who attends condominium owners meetings, reviews motions and monitors resolutions.

Anyone wishing to purchase a condominium unit should, in addition to location, price and financing, also assess the “quality of the condominium association” This includes the regulations, house rules, minutes from recent years, the status of the renovation fund, insurances, ongoing construction or legal disputes and planned renovations. Particularly with older properties, this assessment can determine the success or failure of an investment. Condominium ownership remains attractive. It enables ownership of well-located properties, spreads costs across several owners and is suitable for living, working and investing. However, the condominium association is not a mere side issue. It is part of the product. Anyone who recognises this, carefully assesses the condominium association and plays an active role in shaping it, makes better business decisions and protects the value of their investment in the long term.