Terminating an estate agent contract in Switzerland: template letter

1. What to do if you are dissatisfied with your estate agent 

Are you dissatisfied with the service provided by your estate agent? Try to work things out with them. Be honest about where the problem lies. It’s usually in the interest of the estate agent (also known as a realtor) to leave a good impression.

If no satisfactory solution can be found, you can terminate the contract with the estate agent.

2. When can I terminate the contract with my estate agent?

An estate agent contract is a straightforward agreement and can therefore be revoked or terminated at any time without having to specify a reason (Art. 404 (1) of the Code of Obligations). This applies to both permanent and fixed-term contracts.

Although verbal agreements with estate agents or realtors are legally binding, it is difficult to prove what was agreed. This applies to the estate agent as well as to the homeowners. This can cause problems if any discrepancies arise. You are therefore advised to always put the agreement, including any supplements or amendments, in writing.

3. What costs may be incurred by terminating the contract?

Ending an estate agent contract will involve certain costs. Many costs are itemized in the contract, so you can check the details yourself. They may include the following:

Claim for damages due to termination at an “inopportune moment”

You have the right to terminate the estate agent contract at any time, except if it is at an “inopportune moment”. If you do so anyway, you may be liable to pay damages.

This is the case if, for example, you end the contract at an inconvenient time and this is detrimental to the agent. If the estate agent claims damages, the burden of proof is on them.

Agreement on the reimbursement of expenses

Estate agents are entitled to have some of their costs reimbursed, including if the contract is terminated prematurely. An estate agent contract will usually refer to reimbursement or compensation of expenses.

Such expenses include advertising, photos, for sale signs and travel expenses. Some contracts stipulate a high penalty if the contract is terminated prematurely. This is not permitted. A penalty can only be charged for breaches of contract.

Entitlement to commission if the property is later sold

If you later sell the property and the sale can be attributed to the work of the estate agent, the estate agent can demand the commission that was agreed in the contract. This also applies after the contract has been terminated. In an estate agent contract, this is usually referred to as “causality”.

Can I claim any costs on my insurance?

In the event of legal disputes with an estate agent or realtor, your legal protection insurance may be able to help you. You should contact your insurance company directly.

4. Template for terminating your estate agent contract

It’s possible to terminate an estate agent contract verbally or in writing. However, it’s best to terminate in writing so that you have evidence of the cancellation in the event of a dispute.