The rent charged by the landlord for a new tenancy may be unfair. The law allows tenants to challenge the initial rent and have it reviewed for unfairness.
Reasons
The initial rent may be challenged as unfair in the following alternative situations (BGE 142 III 142, E.3.1.1):
- Hardship
- Personal hardship of the tenant
- Family hardship of the tenant
- Conditions on the local market for residential and commercial premises
- Significant increase of the rent compared to the previous rent.
Requirements
Residential and commercial premises
The challenge of the initial rent is only possible in the case of residential and commercial premises (Art. 270 para. 1 lit. a CO). Thus, the challenge of the initial rent is not possible in the case of other rooms, real estate and movable property.
New tenancy
A challenge is only possible in the case of a new tenancy. A new tenancy exists if there was no previous tenancy between the parties. If the tenant of business premises transfers the tenancy to a third party (Art. 263 CO) or if a third party enters into the tenancy upon early return of the rented property (Art. 264 CO), there is no new tenancy.
In the case of a first letting, there is no previous rent that can be used for comparison, which is why Art. 270 para. 1 lit. b CO is not applicable to this case. In the case of a first letting, however, the reasons listed in Art. 270 para. 1 lit. a CO remain possible.
Hardship
One of the alternative situations for contesting the initial rent is that the tenant felt compelled to enter into the lease due to hardship. The law mentions personal or family hardship.
The concept of compulsion in Art. 270 para. 1 lit. a CO presupposes that the tenant has good reasons for changing the flat and cannot reasonably be expected to forego an opportunity that presents itself because personal or family reasons or the situation on the local housing market are such that foregoing would be unreasonable (BGE 114 II 74; BGer 4C.169/2002 E.2.1).
Hardships may exist in the event of a change of dwelling as a result of:
- Divorce or separation
- birth of a child
- studying
- Place of work
- Notice of termination by landlord at old place
- etc.
Market conditions
Another alternative situation for challenging the initial rent is that the tenant felt compelled to enter into the lease due to local conditions in the market for residential and commercial premises.
Scarcity of available residential and commercial premises fulfils this requirement. The local conditions are decisive. If the canton has prescribed the notification of the previous rent by means of a form (Art. 270 para. 2 CO), a scarcity of residential premises is to be assumed.
The tenant does not have to prove that he/she has tried in vain to find other rental premises.
Rent increase
If the landlord has substantially increased the rent compared to the previous tenancy for the premises, the initial rent may be challenged (Art. 270 para. 1 lit. b CO).
An increase of the rent by more than ten per cent is considered substantial and may justify a challenge of the initial rent (BGE 147 III 431 E.3.3; BGer 4A_295/2016, E.5.3.1).
In the event of a housing shortage, the cantons may prescribe the notification of the preceding rent by means of an official form (Art. 270 para. 2 CO). In the canton of Zurich, the obligation to submit a form applies to vacancies of less than 1.5% (§ 226b EG ZGB). If the form is obligatory, the tenant will find out the previous rent from the form. If there is no obligation to fill in the form, the tenant may request disclosure of the amount of the rent of the previous tenancy (Art. 256a para. 2 CO).
In the form, the landlord must state the increase and the reasons for the increase. The landlord is bound by this justification.
Deadline
The initial rent can only be challenged as abusive at the beginning of the tenancy. The challenge must be lodged with the arbitration authority within 30 days of taking possession of the property, i.e. of the commencement of the tenancy (Art. 270 para. 1 CO).
Unfairness
The rent must appear to be unfair on the basis of the criteria of Art. 269 and Art. 269a CO.
Proof
The tenant as the claimant is in principle obliged to prove the allegations made by him (Art. 8 CC).
The tenant must prove:
- the conditions for contesting the initial rent in accordance with the alternative ground for contestation on which he relies:
- a personal or family hardship, or
- local conditions in the market for residential or commercial premises, or
- the increase of the rent in comparison to the previous rent
- and the unfairness of the rent.
The unfairness of the rent is assessed on the basis of the criteria of Art. 269 and Art. 269a CO. The rent is generally reviewed according to the increase factors indicated by the landlord in the official form (e.g. customary in the locality). However, this does not exclude that it is also examined whether an excessive return is obtained from the rental object (BGE 121 III 364, E.4.b).
If the rent increase was justified on the grounds that it was customary in the locality or neighbourhood, the tenant must prove that the rent is not customary in the locality. It is difficult, but not impossible, to prove this. Based on the circumstances, abusiveness can be concluded (presumption of unfairness in case of an increase of more than 40%; BGE 139 III 13, E.3.1.4). The landlord may provide evidence to the contrary and claim that the rent is not unfair (BGer, 4A_295/2016; BGer, 4A_400/2017).
If the tenant claims that the landlord is generating excessive income from the rented property, the tenant must prove these circumstances and may demand that the landlord disclose the relevant information and documents (BGE 142 III 568 E.2).
Services
Further reading
