Author: Lawyer Enrico Germano

In 90% of cases in Switzerland, a private individual who intends to sell his property turns to a real estate agency to offer it on the market and find a buyer1 . According to Art. 412 of the Federal Act on the Amendment of the Swiss Civil Code (Part Five: The Code of Obligations), hereinafter CO, “By the Brokerage contract, the broker receives the mandate to indicate the opportunity to conclude a contract or to interpose himself for the conclusion of a contract in exchange for a fee.” Article 413 CO further specifies that “The fee is due as soon as the contract is concluded as a result of the broker’s indication or interposition”.

The essential elements of the Brokerage contract are the service required by the principal and the principle of its onerousness. The Brokerage contract can be concluded either expressly or by concluding acts. The Swiss Code of Obligations distinguishes between two species of Brokerage contract, according to Art. 412 para. 1 CO. On the one hand, Brokerage by indication (le courtage d’indication in French language, Nachweismäkler in German language) and on the other hand, Brokerage by interposition (le courtage de négociation in French language, Vermittlungsmäkler in German language). The action of the indicator broker is to indicate a partner with whom the principal can conclude a contract and that of the broker by interposition to conduct negotiations with the third party on behalf of the principal. In practice, which has been acquired in both doctrine and case law, there is also a third type of Brokerage that is not provided for by law, and that is Brokerage by presentation (courtage de presentation in French language, Zuführungsmäkler in German language), which involves bringing a third party into a relationship with the principal with a view to negotiating a contract.

The principal’s main obligation is to pay the fee. Article 413 CO states that the fee is due on condition that the contract is concluded as a result of the indication or interposition of the broker. It is then necessary, unless otherwise agreed, that there is a causal link between the brokerr’s activity and the conclusion of the main contract.

It is necessary to recall the case law that determines what is the usual practice in the Canton of Ticino, and it is noted that the Second Civil Chamber of the Court of Appeals of the Canton of Ticino has already had occasion to determine that a 3% of fee is in accordance with local custom and that this is a notorious fact for professional mediators 2. Other more recent cantonal case law from the Second Civil Chamber of the Court of Appeals has also confirmed that a 3% of fee is in accordance with local custom and a notorious fact for professional brokers. By way of abundance, after all, federal case law also considers a rate of at least 3% to be customary when referring to real estate brokerage3. But in commercial practice, the 5% threshold is permissible.

If the activity of real estate brokerage is occasional it can be carried out by anyone, but if it becomes repetitive it is necessary to have the necessary authorization as a real estate trustee. We know that this is a “unicum” in Switzerland, Ticino being the only Swiss canton to strictly regulate certain activities (financial advisory, real estate advisory and commercial/accounting/fiscal advisory), relegated only to professionals who have the registration of one of the 2 categories of fiduciaries, that of accountant fiduciary and that of real estate fiduciary provided by the Law on the Exercise of Fiduciary Professions of the Canton of Ticino4.

Article 134 of the Tax Law of the Canton of Ticino (LT) provides that duly substantiated customary fees paid to a broker may be deducted from the real estate profits tax (TUI)5 . The real estate brokerage fee is allowed at most to the extent established on the basis of the tariffs of the Ticino Section of the Swiss Association of Real Estate Trustees (SVIT). In general, the Tax Division of the Canton of Ticino considers deductible a sales fee that does not exceed 5% of the sales price (+VAT)6.


2 II CC TA 1.03.2005, inc. n. 12.2004.31, consid. 4.4

3 II CC TA 22.04.2010, inc. 12.2009.61, consid. 4.3 

4 Law on the Exercise of Fiduciary Professions of the Canton of Ticino dated 1.12.2009