I've been offered a new lease...

I've been offered a new lease...

I have a lease that is renewable from year to year, and some time ago my management sent me a proposal for a new five-year lease with a rent increase indexed to inflation, which I didn't accept. Despite this, my management company persists in wanting to increase my rent on the grounds of an increase in the cost of living. I've replied that this isn't possible because my current lease doesn't include such a clause. Who's right?

G. Geneva

In principle, under article 255 of the Swiss Code of Obligations (CO), a lease is for an indefinite period, unless the parties have agreed that it will end without notice at the end of an agreed period. However, article 266 CO stipulates that if the lease is tacitly renewed, it becomes for an indefinite period. Such renewal will result in the fixed-term contract being reclassified as an open-ended contract, unless the parties sign a new fixed-term contract.

On this point, the Federal Court stated that the law does not require any particular reason for entering into a fixed-term lease and does not prohibit the linking of two or more such leases. However, if the lessor has set up a system that can only be explained by the desire to circumvent the mandatory rules of the law, the lease must be considered to be for an indefinite period.

It should be noted that in the case of a fixed-term contract, it is not possible to change the rent during the agreed period, unless a clause providing for indexation of the rent or its payment in instalments has been included in the lease. On the other hand, if the contract is for an indefinite period, the lessor may increase the rent for the next termination period.

In this case, your lease would appear to qualify as a contract for an indefinite period if you did not sign the new five-year contract that was offered to you while remaining in the premises beyond the term of the initial contract, in which case it was tacitly renewed. In this case, your landlord is entitled to request a rent increase for the next legal term of the contract, i.e. 3 months' notice for the end of a lease term. If you do not agree with the new amount requested, you may dispute it with the Conciliation Board for Leases and Rents within 30 days of receiving the notice of increase.