The rules to know about setting the rent in Switzerland

June 26, 2019

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If in Europe the price of rents changes according to the consumer price index, in Switzerland, it is a reference interest rate which is established to fix the price of the rents. The latter is based on the average mortgage rate of banks, and is always rounded to the nearest quarter of a percent. As a result, rents must go up and down, depending on this rate. However, it is true that we don't often see a drop in rents. In addition, the rules for setting the rent also depend on your canton. It is therefore wise to inquire according to the city in which you live.

On the owner's side:

The owner of a property in Switzerland can revise the rent of his tenant. But he can’t do what he wants in this area, either during the lease, or for the creation of a new lease. First, there must be a review clause in the lease. At this moment, the owner can re-evaluate the amount of the rent. This reassessment can only take place once a year, either on the date mentioned in the lease contract or, failing that, on the anniversary date of the lease. Without this clause, the owner can’t do anything for the duration of the contract. However, there may be an exception if there is improvement work done in the apartment/house. The owner can then increase the rent if the cost of the work done is at least equal to half of the annual rent of the last year of rent. In all cases, the owner will have to justify to the tenant the reasons for this increase of rent.

 

On the tenant's side:

If the tenant wishes to contest the rent of his new home, he has the right to do it. For this, he must do it within 30 days upon receipt of the keys by contacting the conciliation authority. He has to do it with a registered letter. If the landlord doesn’t respond, he will have to continue paying the rent until the conciliation authority contact them. Here are some reasons to ask for a lower rent: if the rent is higher than those in the neighborhood, if there is a decline in the mortgage rate reference or if there is renovation.

Good to know: for any new lease contract, the landlord must give the tenant a form for fixing the initial rent provided for in Article 270 para. 2 of the Code of Obligations. This form reminds the tenant of his right to contest the initial rent within 30 days and ask for a reduction if he considers it unreasonable. This form is only mandatory in the cantons of Friborg, Geneva, Neuchâtel, Vaud, Zurich, Nidwalden, and Zug.

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