The reference interest rate has been increased from 1. 5% to 1.75% as of 02.12.2023. Landlords are entitled to increase the rent for residential and commercial premises by 3%.
Requirement for a rent increase
The increased reference interest rate allows for an increase in the rent only if the new reference interest rate is higher than the one since the last rent determination.
If the current rent is based on a reference interest rate of 1.75% or higher, an increase in the rent due to the increased reference interest rate is not possible. Instead, a reduction in the rent would be possible.
If the current rent is based on a reference interest rate of less than 1.75%, an increase in the rent of 3% due to the increased reference in-terest rate is possible (Art. 13 para. 1 lit. c of the Swiss Federal Act on Residential and Commercial Tenancies, VMWG).
If the rent was not increased due to the hike of the reference interest rate from 1.25% to 1.50% as of 02.06.2023 the rent may be increased by 6%.
Other factors
In addition to the reference interest rate, landlords can also base an in-crease in rent on other factors.
One option is to pass on inflation to the tenant. Inflation can be passed on to the tenant at a rate of 40%.
If the costs of taxes, insurance premiums or maintenance have risen, these can be included as additional factors when adjusting the rent. Operating costs can only be taken into account if they have not been accounted for in the ancillary costs.
If the costs of operating the property have changed since the last rent adjustment, this may result in adjustments to the service charges or the payments on account for the service charges.
How should landlords proceed?
In order for a rent increase based on the increased reference interest rate to be valid, it must meet the following requirements:
- It must be notified to the tenant using an official form (Art. 269d of the Swiss Code of Obligations, OR).
- The form must be delivered to the tenant at least 10 days before the start of the notice period (Art. 269d OR). The relative theory of receipt applies (allow sufficient time).
- The increase can only take effect on the next termination date (Art. 269d OR; Art. 266c OR; Art. 266d OR). If a longer notice period has been agreed contractually, it applies.
- The increase must be justified in the form (Art. 269d OR).
In order for an increase as of 01.04.2024 to be viable, the tenant must receive the form or be able to collect it at the post office by 21.12.2023 at the latest.
The rent increase does not have to be delivered separately to married couples and couples living in registered partnerships (unlike termination).
Landlords can also increase the rent due to other cost increases and inflation. Inflation may be passed on up to a maximum of 40% of the increase in the national consumer price index (Art. 16 VMWG).
What can tenants do?
The objections a tenant can raise against a rent increase based on the increased reference interest rate need to be examined based on the specific circumstances of each case. It is possible that:
- The landlord did not proceed correctly in formal terms (defects in the form, deadline, etc.).
- The landlord has calculated the increase incorrectly.
- The increase results in an excessive yield or the rent is no longer in line with local and neighborhood standards.
- The increase is excessive due to other cost reductions or changes in inflation.
Tenants can contest a notified rent increase within 30 days at the relevant conciliation authority. The deadline starts from the day following the delivery of the rent increase notice.
If an agreement can be reached with the landlord before the conciliation hearing, the process can be avoided.
