Changes of rent

The rental contract and thus the rent can be unilaterally changed by the landlord. The rent can follow and index or be staggered. The initial rent or later the rent can be contested and reduced.

Contents

    Unilateral changes to the contract

    In the case of tenancies of indefinite duration, the landlord may in principle increase the rent at any time with effect from the next termination date (Art. 269d para. 1 CO). The same applies to other unilateral changes to the contract to the detriment of the tenant (Art. 269d para. 3 CO). In the case of fixed-term tenancy agreements there is no notice period, which is why a unilateral increase of the rent is not possible in such agreements, unless the parties have agreed on a possibility of increase or on indexed or graduated rents.

    Any rent increase must be notified to the tenant using a form approved by the competent cantonal authority (Art. 269d para. 1 CO, Art. 19 VMWG). If the cantonal form is not used, the notification of the rent increase is null and void and therefore irrelevant. However, if the form of the wrong canton is used, the notification of the unilateral change of contract may be valid. This must be checked in each individual case. To avoid discussions and unnecessary procedures, landlords are advised to always use the correct form.

    The landlord must give reasons for the rent increase. If the rent increase is not justified, it is null and void. The justification must include at least the information required by Art. 19 VMWG. The tenant should know the reasons for the rent increase and be able to judge whether a challenge is worthwhile.

    The form concerning the rent increase must be received by the tenant at least ten days before the beginning of the notice period. This gives the tenants a period of reflection in which to decide whether they want to terminate the tenancy agreement. If the form is received by the tenant later, it will only take effect on the next possible termination date. Landlords should make sure that they send unilateral amendments to the tenancy agreement in good time and allow for the time for transmission and the seven-day collection period for registered mail.

    If the tenant does not agree with the unilateral contract amendment, he or she can contest it with the competent arbitration board within 30 days of receipt. If this deadline is missed, the unilateral contract amendment is valid.

    Erhöhung des Referenzzinssatzes per 02.12.2023

    As of 02.12.2023 the reference interest rate was increased to 1.75%. This entitles landlords to increase the rent by 3%, provided the requirements are met. The reference interest rate was already hiked to 1.5% as of 02.06.2023. In total a rent increase of upto 6% is possible provided conditions are met.


    Reduction of the initial rent

    Pursuant to Art. 270 CO, tenants may challenge the initial rent with the arbitration authority within 30 days of taking possession of the rented property as abusive within the meaning of Art. 269 and 269a CO and demand its reduction if:

    • he or she felt compelled to conclude the rental agreement because of a personal or family emergency or because of the conditions on the local market for residential and commercial premises; or
    • the landlord has substantially increased the rent in relation to the previous rent for the same property.

    In the event of a housing shortage, the cantons may declare the use of the form for unilateral amendments to tenancy agreements (Art. 269d CO) mandatory for their territory or part thereof when concluding new tenancy agreements.

    The provision on the reduction of the initial rent is also applicable to indexed rents and graduated rents (Art. 270c CO, Art. 270d CO).


    Rent reduction during the lease term

    During the term of the lease, tenants may request a reduction of the rent to the next termination date if they have reason to believe that the landlord will obtain a higher income from the leased property due to a substantial change in the basis of calculation, in particular due to a reduction in costs, in accordance with Art. 269 and 269a CO (Art. 270a CO).

    The procedure is prescribed in Art. 270a para. 2 CO:

    • Written request to the landlord to reduce the rent.
    • The landlord has 30 days to make a statement
    • The tenant can appeal to the conciliation authority if the landlord
      • does not grant the requested rent reduction or only grants it in part
      • does not reply at all
      • does not reply within the 30-day period

    The deadline for appealing to the conciliation authority begins with the expiry of the landlord’s time limit for making a statement.


    Indexed rent

    Indexed rent of contracts with a term of at least five years follow an index (national consumer price index) and rent adjustments take place within the scope of the index change according to the contractual regulation (Art. 269b CO). How often the rent is adjusted to the index and what period of notice is to be observed can be agreed in the tenancy agreement.

    The official form for unilateral contract amendments must be used for any increase (Art. 269d CO, Art. 19 para. 2 VMWG).

    The contestation of an increase of a rent due to adjustment to the index is only possible if the calculation of the increase is faulty (Art. 270c CO).


    Staggered rent

    If the parties agree on a graduated rent for a lease of at least three years, the rent increases automatically on the agreed dates, but not more than once a year (Art. 269c CO).

    Nevertheless, rent increases must be notified to the tenant using the official form for unilateral contract amendments (Art. 269d CO) (Art. 19 para. 2 VMWG).

    It is not possible to contest an individual increase. The rent and the individual scales can only be reviewed in court if the initial rent is contested (Art. 270d CO).



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