How do you know if the rent on a property is unfair?
How do you know if the rent on a property is unfair?
"I live in a flat in the centre of Geneva. The management company uses the fact that the flat is furnished to justify the price of the accommodation. The furniture is old and cheap. What are the criteria for calculating whether or not the rent for a flat is excessive?"
Céline, Geneva
In the Code of Obligations, no distinction is made between furnished and unfurnished accommodation, with the exception of art. 266e of the Swiss Code of Obligations, which concerns notice periods and terms for furnished rooms.
Protection against unfair rent is governed by art. 269 et seq. of the Swiss Code of Obligations. Article 269 of the Swiss Code of Obligations states that rents are unfair if they enable the lessor to obtain an excessive return on the rented property or if they result from a manifestly exaggerated purchase price.
Under art. 269a of the Swiss Code of Obligations, however, rents are generally not unfair if, in particular are within the range of rents that are customary in the locality or district; are justified by cost increases or additional services provided by the landlord; are, in the case of newly built properties, within the range of the gross yield that allows costs to be covered; serve only to compensate for a rent reduction previously granted through the partial deferral of normal financing costs, and are set out in a payment plan known to the tenant in advance; compensate only for inflation in the case of capital at risk; do not exceed the limits recommended in the framework agreements concluded between landlord and tenant associations or organisations representing similar interests.
The fact that the flat is furnished could be taken into account, for example, in a comparison with the usual rents for similar properties in the area or in calculating the return on the rented property. However, if the furniture is of little or no value, it will not justify a higher rent than for the same unfurnished flat.
