No flat-rate increase without proof
Practice shows that arbitration authorities in German-speaking Switzerland generally accept flat-rate rent increases of 0.5-1% per year due to general inflation. However, according to the Federal Supreme Court, this alone is not sufficient for a legally effective rent increase.In the specific case, the landlord had claimed a flat-rate annual price increase of 0.5 % – a total of 11 % since the last rent adjustment. However, the tenant demanded a detailed, numerical justification. This was not provided, which is why the Federal Supreme Court rejected a rent increase based on the alleged cost increase.
Figures instead of estimates
According to the Federal Supreme Court, landlords must make a comparison of the actual costs when increasing rent due to increased maintenance costs – ideally over a five-year period. Only in the event of significant fluctuations may a generalized approach be taken. A general reference to the national consumer price index is not sufficient.
Value-enhancing investments must also be precisely quantified. In this case, although the tenant recognized a yield premium of 2 % above the reference interest rate, the lower mortgage interest rate ultimately resulted in a rent reduction to CHF 798.05 from July 2021.
Conclusion: Transparency creates legal certainty
This ruling is groundbreaking for landlords and tenants alike. It shows: Anyone planning a rent increase should document it carefully and justify it transparently – especially if costs have risen. At the same time, it strengthens the position of tenants, who can demand a well-founded explanation for price adjustments.
Tip for landlords: Draw up a detailed cost breakdown if you are planning an increase. Blanket statements can not only be legally inadequate, but can also undermine trust in the rental relationship.
Our experienced lawyers will be happy to provide you with further advice or answer any questions you may have about tenancy law and rent structuring.