Switching Management for a Condominium Association (STWEG): Legal Basis, Notice, and Handover Checklist

Short answer: A condominium association's (STWEG) management contract is legally a simple mandate and, under Art. 404 CO, can be terminated at any time – even with a fixed term. The Federal Supreme Court treats this right of termination as mandatory. In practice, a lead time of around three months is nonetheless recommended for an orderly handover.

Legal Basis: Why Management Can Be Terminated at Any Time

The contract between a condominium association and its management company is legally classified as a simple mandate within the meaning of Art. 404 CO (the Swiss Code of Obligations). A core feature of mandate law is that either party may terminate the contract at any time – regardless of whether the management contract specifies a fixed term or a notice period. The Federal Supreme Court treats this right of termination as mandatory: it can be neither excluded nor restricted by contract.

The only limit is set by Art. 404 para. 2 CO: if termination occurs "at an inopportune time" – i.e. at a moment particularly unfavorable for the other party – this can trigger a duty to pay damages. However, this is limited to what's known as the negative contractual interest: it compensates for the harm caused by the termination itself, not for lost profit from the remaining mandate.

In parallel, Art. 712r CC (the Swiss Civil Code) governs removal at the level of the owners' assembly: the assembly can remove the manager at any time and without giving reasons. If the assembly refuses to remove the manager despite good cause, any individual unit owner can request judicial removal within one month. According to case law, good cause includes a loss of trust, failure to perform duties, careless handling of funds, disregard of resolutions, and serious disagreements.

Customary Notice Periods Despite "Terminable at Any Time"

Legally, termination is therefore possible immediately. Out of business fairness and in the interest of an orderly handover, several professional sources nonetheless recommend observing a lead time of around three months before the mandate actually ends, and communicating the termination in writing. Important: this is a practical recommendation, not a legal requirement. Long contractual notice periods, as found in some management contracts, are hardly enforceable given the mandatory nature of Art. 404 CO.

How It Unfolds at the Assembly

Switching management generally requires two separate resolutions at the owners' assembly: removing the current management company and appointing the new one. In most cases, a simple majority of the owners present or represented is sufficient, unless the association's regulations provide otherwise.

One practical detail: even when its own removal is up for discussion, the incumbent management company must still properly convene the assembly – the duty to convene exists independently of the agenda item. In practice, it's advisable to elect the new management company at the same assembly wherever possible, to avoid a transition gap.

Handover Duties: What the Outgoing Management Company Must Provide

Once the mandate ends, the duty to hand over property under Art. 400 CO applies. It covers everything the management company received from the association or from third parties in the course of its work, as well as all documents it created itself – regardless of whether these exist physically or electronically.

A point often overlooked in practice: digital data must also be handed over in electronic form. An Excel list of repairs or maintenance work, for example, must be provided as a file – a plain paper printout does not satisfy the duty to hand over property. In addition to this duty, a post-contractual duty to account and a duty of loyalty also apply: the outgoing management company must still provide information after the mandate ends if this is necessary for a proper handover.

Typical Problems When Switching Management

In practice, recurring points of conflict arise during a switch. These include the outgoing management company challenging the removal resolution, especially if it is itself a unit owner. Disputes over compensation also arise when the outgoing management company perceives the termination as premature or unjustified. According to specialist lawyers, a dispute that comes up "again and again" is delay or refusal in handing over the dossier.

Checklist: What to Clarify at Handover

1. Complete management records (deeds, correspondence, minutes) – physical and electronic
2. Digital files in their original format (e.g. Excel lists for repairs/maintenance), not just as paper printouts
3. Account balance and access or powers of attorney for the association's bank accounts
4. Renewal fund balance including the associated supporting documents
5. Ongoing contracts (caretaking, insurance, suppliers) and their notice periods
6. Keys, key plans, and access cards
7. Open or pending matters (insurance claims, ongoing payments, legal disputes)
8. Current annual accounts/statement and any outstanding accounting still owed
9. Clarifying compensation or fee apportionment in the case of early termination
10. Written confirmation of the handover (date, recipient, completeness) as evidence

Frequently Asked Questions

Conclusion

Switching management for a condominium association is legally possible at any time – the right of termination under Art. 404 CO is mandatory and cannot be overridden by contract. A smooth handover nonetheless requires two proper resolutions from the assembly and a careful, documented dossier handover under Art. 400 CO – including all digital data. Clarifying the ten checklist points early significantly reduces the risk of the typical points of dispute.

All figures and legal references in this article are disclosed and linked → Sources.