What happens if the reference rate increases? Is the landlord allowed to increase the rent?
Yes, if the mortgage reference rate in Switzerland is increased, then landlords can also increase rent. The landlord can also increase rent if inflation increases, maintenance and operating costs have increased, or value-adding conversions and renovations are carried out. If the mortgage reference rate is increased several times within a year, the rent can also be adjusted several times.
What if I never requested a decrease in rent? Does the rent increase anyway?
Not necessarily. Landlords can only raise rent if the reference rate that applies to the rent is lower than the currently applicable reference rate. If, for example, the rental agreement lists a reference rate of 1.75% and the rent has never been lowered even though the reference rate decreased, the landlord is only allowed to raise the rent once the reference rate is at least 2%.
The reference rate in my rental agreement is too low or wrong. Which rate applies?
The reference rate that applied at the time the agreement was concluded applies in this case. If at that time a lower rate was indicated, then the landlord cannot rely on that rate.
How will I find out that the rental rate is going up?
Unlike with a reduction, you do not have to do anything. Instead, the landlord must take initiative. They have to contact you if your rent will be raised due to an increase in the reference rate. If you want to obtain information yourself, you can do so on the website of the Federal Housing Department. Mortgage reference rate (admin.ch).
Can the landlord increase the rent immediately if the reference rate increases?
No, the rent can only be increased at the next possible termination date according to the rental agreement. Moreover, a form approved by the canton must be used to report the increase. For tenants it is also important to know that the increase in rent only affects net rent, i.e. rent minus any payments on account or flat-rate amounts for heating and ancillary costs.
With the following checklist, you can quickly and easily check for yourself whether the increase is correct.
- Was the rent increase reported with a cantonal form? If not, then the rent increase is not valid. You can still pay your regular rent. You can ignore your landlord’s demands for higher rent and notify them that the increase is not lawful since you were not notified using the cantonal form.
- Higher rent can then be applied only upon the next termination date. If the increase in rent is claimed at an earlier time using the cantonal form, then you still do not yet need to pay the higher rent. Inform your landlord that the increase is only due as of the next possible termination date.
- Were the correct numbers used? You can easily check the rent increase yourself or let us advise you.
How is the increase calculated correctly?
To calculate the new rent, you have to consult the table with the transfer rates in the event of a change to the reference rate. This shows how much the net rent may increase and by what percentage if the reference rate increases. You can find the table here.
In the case of net rent of CHF 2,000 (excluding heating and ancillary costs), an increase of 0.25 % means that an increase of 3 % can be demanded, i.e. CHF 60 more. The new net rent would thus be CHF 2,060 plus heating and ancillary costs. To ensure the calculation is correct, it must exclude payments on account for ancillary costs and flat-rate payments.
What is the situation regarding inflation? Is the landlord allowed to pass this on too?
Yes, the landlord can also pass on inflation, however not in full, but rather only up to 40%. Whether and in what way inflation is allowed to be passed on has to be calculated based on the information set out in the rental agreement and on the Swiss Consumer Price Index.
How is inflation calculated correctly?
It is not necessarily easy to choose and calculate the right numbers. You can find a calculator to help on the website of the Federal Statistical Office (BFS): BFS online calculator (admin.ch).
Can the landlord apply both inflation and the increase in the reference interest rate?
Yes, the landlord can apply both the inflation and the increase in the interest rate and thus apply an even higher increase to the rent.
What can I do if there is doubt regarding whether the the rent increase is correct?
If you were not notified correctly of the rent increase, for example with the official form, then you do not need to respond. If the landlord contacts you for this reason, then you can refer to the increase as being so-called null and void. Then you can wait until you receive the correctly reported increase at the next possible termination date.
If in the case of the increase the notice period is not complied with, you should inform your landlord that the increase is only valid from the next possible termination date and that you will pay the higher rate from that date.
If the amount of the increase in rent is incorrect, you should contest it.
How does such an objection work?
The state does not proactively intervene if an unlawful rent is demanded. As the tenant, you have to defend yourself independently.
If you do not agree with the rent increase, then you have to contest it as unlawful at the responsible mediation authority for rent and lease matters within 30 days. It is not enough to just submit an objection to the landlord. Use our sample letter for this purpose.
What happens if I miss this 30-day deadline?
The objection to the rent increase has to be made within 30 days after receipt of the cantonal form. If you miss this deadline, then you have to pay the higher rate, even if the increase is not justified.