Tenancy law currently provides that rent is determined on the basis of costs, thus allowing landlords to adjust the rent according to changes in mortgage interest rates. The Federal Housing Office (FHO) publishes a reference interest rate that serves as a basis for adjustments. An increase in the mortgage interest rate can therefore quickly have an impact on rent. Landlords are not, however, obliged to automatically adjust the rent when there is a decrease in the mortgage interest rate. It is up to the tenant to request a reduction in rent.

This system lacks transparency and is currently being revised. The essential part of the revision is to stop adjusting rent based on mortgage interest rates. In future, rent should be determined based on the Swiss consumer price index.

Rent may be increased by the landlord at any time on the next possible termination date by making a unilateral amendment to the tenancy agreement. The landlord must, however, comply with certain rules (notice period, forms authorised by the canton, justification). The landlord must give the tenant a clear explanation for the increase with reasons that are justifiable under tenancy law. If the tenant has doubts about the fairness of the increase, he may refer the matter to the conciliation board who will both give him advice, but also act as the coordinating body if the tenant decides (within 30 days) to dispute the increase. The tenant does not need to worry about any termination of the tenancy as he is protected by law.

In certain cases, tenants can send a written request to their landlord for a reduction in rent. A significant change in the basis for calculating rent provides the grounds for reduction, for example, due to a decrease in the reference mortgage interest rate. The landlord has 30 days in which to come to a decision on the request for a reduction. Thereafter, if necessary, the tenant may take the matter to the conciliation board. If a tenant realises, on moving into his apartment, that he is paying considerably more than the previous tenant, he may dispute the initial rent within 30 days by going to the conciliation board. The same holds true for tenants who are forced to terminate their lease due to personal hardship or to changes in the local housing market. A reduction in the value of the apartment (on account of defects or renovation work) is another reason to reduce the rent temporarily.

If the landlord is due to repair a defect in an apartment and fails to do so, the law gives the tenant an easy means of leverage: withholding the rent. Several conditions and formalities have to be met in order for the rent to be lawfully withheld. Contact the conciliation board for further information. The rent is considered to have been paid in the form of a deposit with a third party.

The conciliation board provides information and advice to both tenants and landlords and can issue you with any forms you may need. The tenants’ and landlords’ associations also assist tenants and landlords with their respective concerns and interests in matters relating to rent.