Significant Reforms in Construction and Property Law Effective 1 January 2026

Details of the Revised Amendments:

Right to Rectification

As of 1 January 2026, purchasers of newly built properties and property developers will have a mandatory right to free rectification of construction defects by the seller or contractor (Art. 219a para. 2 and Art. 368 para. 2bis revCO). A property is deemed to be newly built if, at the time the contract is concluded, it is either yet to be constructed or was completed less than two years prior to the sale. This right to rectification may not be contractually waived.

In current practice, it is common for newly built residential properties to be sold under a complete exclusion of warranty, with the seller instead assigning any warranty claims they may have against the individual tradespeople involved to the purchaser or the condominium owners’ association. The burden then falls on the buyers to pursue these claims independently. This approach poses various disadvantages for buyers, especially those without technical expertise in construction, who may struggle to identify the responsible tradesperson and to assert claims effectively.

In line with consumer protection principles, the original 2022 draft of the revision had limited the statutory right to rectification to contracts of sale or work concerning personal or family use. However, this limitation has now been removed. Under the adopted revision, the seller is now also obliged to provide this right to rectification to institutional buyers and for properties used for commercial purposes.

Notice Period for Defects

The second major reform concerns the notice period for reporting defects in property purchases and construction contracts. Under current law, defects must be reported “immediately upon discovery”. The revised Swiss Code of Obligations (CO), however, introduces a 60-day notice period, which cannot be contractually shortened. This period applies to both apparent defects and those discovered at a later stage (so-called hidden defects).

Furthermore, the five-year limitation period for asserting warranty claims related to defects in real estate and immovable structures—as well as movable items that are intended to be permanently integrated into buildings—can no longer be contractually shortened under the new provisions. Notably, this minimum duration also applies to contracts concluded before the new rules come into force on 1 January 2026, provided a shorter contractual limitation period had been agreed and this period had not yet expired as of that date.

Construction Lien (Bauhandwerkerpfandrecht)

A clarification has been introduced regarding the construction lien (Bauhandwerkerpfandrecht). The owner of a property on which a contractor registers a construction lien to secure a claim for unpaid work may now request the deletion of the lien from the land register, provided that “adequate security” is furnished for the claim, including interest.

Previously, under Federal Supreme Court case law, such security was not considered “adequate” if default interest was only covered for a limited period. Under the revised Article 839 paragraph 3 of the Swiss Civil Code (revCC), the default interest must now be secured for a period of ten years.

Relationship to SIA Standard 118

In construction contracts, parties frequently agree to apply the General Conditions for Building Works according to SIA Standard 118. This standard allows defects to be reported at any time within two years following acceptance of the works. In this respect, the provisions of SIA Standard 118 remain more favourable to clients than the revised Swiss Code of Obligations (CO), which requires notification within 60 days.

However, under SIA Standard 118, any newly discovered defects identified after the two-year period must be reported immediately in order to preserve the client’s rights. This requirement now conflicts with the revised CO. Unless and until SIA Standard 118 is amended accordingly, the mandatory 60-day notice period under the CO will override the less favourable SIA provision in construction contracts concluded after 1 January 2026.

In practical terms, this means that hidden defects discovered more than two years after acceptance may still be reported within 60 days—rather than immediately—under SIA-based contracts signed after 1 January 2026.

Conclusion and Recommendation

With the exception of the mandatory limitation period, the revised legal provisions will apply only to contracts concluded on or after 1 January 2026. In particular, any exclusion of warranty agreed in contracts for the sale or construction of new buildings signed before that date remains valid under the new law. Likewise, buyers who purchased a newly built property under the previous legal regime will not be entitled to the rectification right set out in Art. 219a para. 2 revCO, unless such a right was explicitly agreed in the contract.

For construction projects already underway, or for which contracts for work are concluded before the end of this year but which will only be sold as new builds after the revised legislation comes into force, discrepancies may arise between the warranty provisions in the contract for work and those in the subsequent sale agreement. Against this backdrop, it is advisable to take the new legal framework into account when drafting contracts for work even now, in order to avoid potential inconsistencies at a later stage.

We would be pleased to advise you on the new legal provisions and their implications for your individual construction and real estate projects. Please feel free to contact us to arrange a personal consultation.