Property value: CHF 20 million or CHF 13 million

At the beginning of February, Switzerland’s highest court dealt with a particularly luxurious property: a 12-room duplex flat in an unnamed municipality in the canton of Zug, complete with six underground parking spaces. Its residents enjoy magnificent views and, when the weather permits, plenty of sunshine.
 

But what is the property actually worth?
In enforcement proceedings, the Zug Debt Enforcement Office (Betreibungsamt) valued it at approximately CHF 13.2 million. The debtor in the case considered this figure too low, and applied to the Zug High Court (Obergericht) for a fresh valuation by an independent expert. The expert then assessed the market value at around CHF 13.5 million. The High Court ultimately instructed the enforcement office to include a valuation of CHF 13.35 million in the auction conditions.

The debtor was also ordered to pay a court fee of CHF 1,000 and the costs of the new expert valuation, amounting to CHF 5,860.

Unhappy with this outcome, she lodged a civil appeal with the Federal Supreme Court (Bundesgericht) in Lausanne against the judgment of the Zug High Court.

There is no shortage of prestigious properties with stunning views in the canton of Zug.     Photo: Stefan Kaiser
 

The estate agent valued the property at more than CHF 20 million
In its ruling of 5th February, the Second Civil Law Division of the Federal Supreme Court stated that such valuations constitute matters of judicial discretion. Disputes over the amount are conclusively decided by the competent cantonal supervisory authority (Aufsichtsbehörde). The Federal Supreme Court merely examines whether the correct procedure was followed, and whether the lower court abused or exceeded its discretion.

This was precisely what the appellant alleged: she argued that the Zug High Court had failed to consider a valuation report she had submitted from an estate agency, which estimated the property’s market value at between CHF 20 and 22 million.

In the prior proceedings, the High Court had reasoned that the agency’s valuation was a private estimate prepared by a property broker whose aim was to achieve the highest possible sale price – and therefore the highest possible commission. Before the Federal Supreme Court, the appellant countered that the agency would only receive a commission if a sale actually took place. As an experienced estate agent, it would certainly be aware that an excessively inflated price could deter buyers, and ultimately cost it its commission.

No abuse of judicial discretion
The Federal Supreme Court, however, held that the appellant had merely presented the facts from her own perspective; there was no evidence that the High Court had abused its judicial discretion.

Her further argument – that both valuation reports had failed to give sufficient weight to value-enhancing factors such as the view, sunlight exposure and absence of noise or other disturbances – was likewise dismissed by the judges in Lausanne.

On the central issue of valuation, the Federal Supreme Court therefore rejected the appeal. But the appellant did succeed on one point concerning costs: the Zug High Court had set the court fee at CHF 1,000, whereas the applicable fee regulations provide for a maximum of CHF 150.

Any satisfaction over this partial victory is likely to be short-lived. The court costs for the Federal Supreme Court proceedings, amounting to CHF 4,000, have been imposed on her in full.