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Vaud: Does the LPPPL impact the sale of my property?

By Yann Girardet , July 27, 2022

The Law of the Preservation and Promotion of the rental stock (LPPPL) was put in place to ensure that the rental stock is sufficient and that it meets the needs of the population. It affects both buyers and sellers during the final phase of the sales process defines the possibilities of the sale of certain types of property.

Since the 2000s, the canton of Vaud, and more particularly the Lake Geneva region, has suffered from a significant housing shortage, leading to a notable increase in rental prices. In February 2017, after two years of work, the people of Vaud accepted the law on the preservation and promotion of the rental stock, otherwise known as the LPPPL or L3PL. But what is this law exactly? In this article, we inform you about the principles of its application and its possible impact on the sale of your property in the canton of Vaud. 

 

What is the LPPPL? 

The LPPPL is a Vaud law that came into force on 1 January 2018 and aims to combat the shortage of properties on the rental market and to promote the construction of properties that meet the demand and needs of the population. 

 

A defined field of application 

This law, which is specific to the canton of Vaud, applies only in districts where there is a housing shortage. That is to say, where the rate of vacant housing is sustainably lower than 1.50% on average (established over the last 3 years). 

However, it is important to note that if the shortage is more pronounced, i.e. when the vacancy rate is below 1%, special enforcement provisions will be put in place. 

Furthermore, if the municipality considers that its situation differs from that of the district, it may, by providing proof, request to be removed from or added to the list drawn up by the Council of State of the Canton of Vaud.

Note: the list of districts with shortages is published annually, in principle in January, in the Official Gazette of the canton, available here

 

Operations subject to authorisation...

Several activities are subject to this law and now require authorisation from the Housing Department. These are the following activities:

  • Sale (disposal) of rented accommodation
  • Change of use of rented accommodation 
  • Demolition, conversion and major renovation
  • Minor renovations (less than 20% of the replacement value defined by the ECA)
  • Renovation of isolated housing (maximum 2 flats)

 

... for certain types of buildings 

The above-mentioned operations are subject to authorisation if the property is previously rented, whether occupied or vacant. On the other hand, they are not subject to approval if, for example, the residential building consists of up to two apartments, if the housing was last occupied by the owner or a close relative or if the net internal living area of the accommodation is 150m² or more. The full list of other types of accommodation not subject to authorisation is given in Article 3 of the LPPPL.

 

Priority to municipalities under certain conditions

The law grants a right of pre-emption to the municipalities. This means that the communes have a right to acquire a property that is offered for sale as a priority within 40 days of the notification of the sale. 

However, this right can only be exercised under certain conditions. It can only be used for the purpose of building public housing, if the property is located in a district subject to a shortage and finally if the total plot is at least 1,500m² unless it is adjacent to land owned by the municipality. Please note that the right of pre-emption does not apply if the sale is between close relatives. Furthermore, according to the practice of the Housing Directorate, municipalities cannot exercise their right of pre-emption in the case of individual sales of a PPE batch. This is also the case if the property is located in a low-density area. 

 

Impact for sellers 

As a seller, this law impacts you if the property you wish to sell is currently rented out, as their disposal is subject to authorisation. It is now necessary to apply to the Directorate General for Land and Housing for their approval to conclude the sale of your property.

It is possible to obtain their approval if your property does not fall into a shortage category, if it has been in a condominium since it was built or since at least 7 October 1989, or if it is being acquired by your current tenant or a member of your family. 

However, you should be aware that if your property does not fall into any of the above categories, authorisation may be granted on exceptional grounds. That is, if there are compelling financial or family circumstances that require the sale. 

Each authorisation obtained may be accompanied by various control measures, such as the requirement that the property be rented out on a long-term basis, a control of the sale price or the rent. 

Your notary in charge of the sale of your property will take care of the request for authorisation from the competent authorities. You can also contact your local Neho agent for any questions relating to this law. You should also know that it is possible to consult the communes beforehand, but that their agreement is still subject to final validation by the notary and the cantonal authorities. 

 

These entities will be able to help you and give you information specific to your situation: 

  • A notary 
  • The commune
  • The housing authority 
  • Your local Neho agent

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Quick links:

  1. What is the LPPPL? 
  2. A defined field of application 
  3. Operations subject to authorisation...
  4. ... for certain types of buildings 
  5. Priority to municipalities under certain conditions
  6. Impact for sellers 

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