Facts
The dispute opposes Pepo C., tenant of a house, to Hans and Cécile S., owners of the house. The facts are as follows: Pepo C. has been a tenant of the house since 1971. In 1990, the previous owners increased the rent, which led to a conciliation procedure. The procedure having failed, the owners waived their right to bring the matter before a judge, which resulted in a two-year ban on terminating the lease. The new owners, Hans and Cécile S., bought the house in May 1990 and terminated the lease in June 1990, and again in July 1990. The tenant contested these terminations and brought the matter before the conciliation commission, which declared the two terminations null and void. The owners then brought the matter before the justice of the peace, who declared the first termination null and void, but confirmed the second termination and extended the lease by one year. The tenant appealed against this decision, which was rejected by the justice of the peace.
The tenant then appealed to the Federal Court, which rejected the appeal. The Federal Court considered that the owners had an urgent need to regain possession of the house, justifying the termination of the lease, and that this urgent need was not limited to cases of housing shortages, but could also exist for economic reasons.
Considerations
The Federal Court examined the applicable legal provisions, in particular Articles 261 para. 2 let. a, 271a para. 3 let. a and 274d para. 3 of the Code of Obligations (CO). It considered that the landlord's urgent need, which allows for the waiver of the ban on terminating the lease, does not require the landlord to be faced with a housing shortage, but can also exist when, for economic reasons, it cannot be expected of the landlord to waive the enjoyment of the rented apartment.
The Federal Court also examined the concept of urgent need and considered that this need must be assessed objectively, taking into account all the circumstances of the case. It also considered that the urgent need may…