Rent Increase: When Is It Abusive?

The Principle

Art. 269 CO: rents allowing the landlord to obtain an excessive return or based on a manifestly exaggerated purchase price are abusive. Art. 269a CO specifies when a rent is not abusive.

Validity of a Rent Increase

Form: Must use the canton-approved official form (art. 269d para. 1 CO), stating the reasons and the tenant's right to contest. Otherwise void.

Timing: Only effective at the next termination date, communicated at least 10 days before the start of the notice period (art. 269d para. 1 CO).

Permitted Grounds

1. Reference mortgage rate increase: a 0.25% increase allows approximately 3% rent increase (ATF 128 III 163)
2. Inflation adjustment: 40% of CPI increase may be passed on (art. 16 VMWG)
3. Value-adding improvements: portion of investment cost may be passed on (art. 14 VMWG)
4. Increased operating costs: accessory charges adjustment (art. 257a et seq. CO)

Contesting an Increase

The tenant must petition the conciliation authority within 30 days of receiving the notice (art. 270b para. 1 CO). The landlord bears the burden of proving justification.

Net Return Method (art. 269 CO)

Permissible return: 0.5% above the reference mortgage rate (ATF 123 III 171). If actual return exceeds this, the rent may be abusive.

Comparative Rents Method (art. 269a let. a CO)

Comparison with similar properties in the area. At least five comparable units required (ATF 123 III 317).

Reference Mortgage Rate

Since 2008, a single nationwide reference rate applies (art. 12a VMWG), published quarterly by the Federal Housing Office.