Meyerlustenberger Lachenal AG advised one of the major real estate fund in the acquisition of a large commercial building in Geneva during the Covid-19 sanitary crisis. The MLL team, led by Philippe Prost (Real Estate & Construction), consisted of Jacques Johner (Real Estate & Construction) and Fiona Scherrer (Junior Associate).
The particularities of this transaction, apart from the relatively high sale price for a single property, are the fact that:
- The plot was subject to a legal right of preemptive in favor of the Commune and the State of Geneva and the seller had granted a conventional right of preemptive to the sole tenant of the buildingThe plot was subject to a legal right of preemptive in favor of the Commune and the State of Geneva and the seller had granted a conventional right of preemptive to the sole tenant of the building.
- Despite the existence of the two types of right of preemptive mentioned above, the parties agreed that the purchaser should take possession of the property at the time of the signature of the deed of sale, whereas the transfer of ownership could not take place before two months at the earliest. Therefore, particular provisions had to be included in order to enable the purchaser to effectively obtain payment of the rents as from the date of taking possession, once the transfer of ownership in his favor became effective.
- The building is occupied by a unique tenant and the long-term continuation of the double net lease (the original of which remains untraceable) was a sine qua non condition for the purchaser.
- Major defects, requiring several months of work to repair and costing several hundred thousand francs in total, were discovered during a visit of the property and had to be fixed at the seller’s expense and risk. Specific mechanisms had to be put in place to ensure that this obligation is fulfilled by the seller and that the purchaser does not run the risk of a legal lien on the property.
- The seller is a foreign company, with the consequence that it was necessary to set up a framework enabling the purchaser to be, if necessary, in a position to easily assert his warranty rights against the seller.
- The major part of the negotiation and the closing took place during the Covid-19 sanitary crisis.