The letting mandate: what is in it, what it costs, and why it can be ended at any time
The contract between owner and manager is legally a mandate. That has a consequence hardly anyone knows — and it works in your favour.
What is a letting mandate?
A letting mandate is the contract by which an owner transfers the short-term letting of their flat to a service provider. Legally it is a mandate under Art. 394 ff. CO and therefore revocable at any time under Art. 404 CO — even where a minimum term has been agreed. In Zurich it is usually remunerated at 18 to 30 per cent of revenue.
The point hardly any provider mentions
Under Art. 404 para. 1 CO a mandate may be revoked or terminated by either side at any time. The Federal Supreme Court applies this provision as mandatory law: a contractual minimum term does not override it.
For a letting mandate that means a clause reading «twelve months minimum term» does not stop you ending it earlier. If the revocation comes at an inopportune moment, damages may be owed — but the contract ends.
This legal position rarely appears in the contracts handed over for signature. That is no reproach; it is in the statute and need not be repeated. Knowing it changes how a minimum term is to be read: as a declaration of intent, not as a chain.
With us the question does not arise, because we agree no minimum term. The reason is a calculation and not generosity: a commitment you later regret produces a relationship in which we no longer have to make an effort.
What a letting mandate governs
Five points decide the economic substance, and the first is the one most often overlooked.
- The basis on which the commission is calculated. «20 per cent» can be applied to gross revenue, to revenue after the platform fee, or to revenue including the cleaning fee — the same figure, three different amounts.
- Who owns the platform account. If it stays with the owner, so do the reviews; if the listing runs on the provider’s account, the owner starts from zero after a parting.
- Which costs are passed on and at what rate — cleaning, laundry, minor repairs, consumables.
- Who handles the tourist tax, guest registration and reporting duties.
- What happens on termination: access, photographs, and calendar bookings that reach beyond the end of the contract.
Frequently asked questions
- Can I terminate a letting mandate early?
- Yes. A letting mandate is a mandate under Art. 394 ff. CO and therefore revocable at any time under Art. 404 para. 1 CO. The Federal Supreme Court applies this as mandatory law — an agreed minimum term does not override it. If the revocation comes at an inopportune moment, damages may be owed, but the contract ends. With us the question does not arise: we agree no minimum term.
- What does a letting mandate cost in Zurich?
- Between 18 and 30 per cent of revenue. What decides is not the rate but the basis it is applied to: 20 per cent of gross revenue is a different amount from 20 per cent after the platform fee. With us it is 18 per cent in the basic package and 25 per cent for full service, in each case on accommodation revenue after the platform fee.
- Is a letting mandate the same as a tenancy agreement?
- No, and the difference is fundamental. Under a tenancy you hand over the flat for use against rent; under a letting mandate you remain the landlord and instruct somebody to run it. That is why mandate law applies here and not tenancy law — with the consequence that the contract can be ended at any time, whereas a tenancy has notice periods and protection against termination.
- Do I need a written mandate?
- Legally no — a mandate is valid without any particular form. Practically yes, and not because of the commission: the points that later cause disputes are the basis of calculation, who owns the account, and what happens on termination with access and running bookings. Whatever is not settled there gets settled in a dispute.
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