Right of pre-emption

What is the Right of pre-emption?

The right of pre-emption gives its holder preference in buying a particular property should the owner wish to sell it to a third party.

If a property subject to the right of pre-emption is bequeathed to an heir during estate distribution, subjected to compulsory sale, or intended for public use, the pre-emption rights cannot be exercised. The origin of this right can be either statutory or contractual.

The following persons are beneficiaries of statutory right of pre-emption:

• A co-owner willing to buy an additional share in a co-ownership with more than one person (the pre-emption right exists for condominiums only if it has been expressly provided for and entered in the land register.
• A land owner subject to a distinct and permanent right of land occupancy against all purchasers of land occupancy rights.
• A superficiary against all purchasers of land under pre-emption.
• Certain relatives of the alienator or the farmer in the case of agricultural use provided that some prerequisites have been fulfilled (cf. LDFR 42 et seq.).

The pre-emption right can be entered into the land register for a maximum period of 25 years. To be valid, the pre-emption agreement has to be executed in the form of a deed.

Pre-emption agreements that do not determine the purchase price beforehand are valid if they are in writing. Unless otherwise agreed, the contractual right of pre-emption can be inherited but is not assignable.

When a property subject to the right of pre-emption is sold to a third party, the alienator has to inform the holder of such a right about the conclusion and contents of the purchase agreement.

The same obligation is incumbant on the land registrar (CCS art. 969). If the holder of the pre-emption right wants to exercise the right, he or she is obliged to inform the seller within a period of three months, or if it is the owner who is entered in the land register, then he or she must inform the owner. This period begins when the agreement is signed or its contents become known. Two years after the new owner has been entered in the register, the right cannot be exercised anymore. If the purchase price is determined in the pre-emption agreement, it should apply, and if it is not the case, the price agreed upon with a third-party buser should be maintained.