How much can the rent be increased?
How much can the rent be increased?
"As I'm about to sign a new lease, I was wondering whether there is a limit to how much the rent can increase compared with the previous rent. Are the rules the same for commercial tenancies? " Yacine, Geneva
In lease law, when it comes to rent increases, the law does not specify a precise limit or percentage that is permissible. However, in the canton of Geneva, when a new lease is concluded, the landlord is obliged to notify the initial rent on an official form so that it is clearly stated. The form also states that the tenant has the right to dispute the initial rent.
In this respect, article 270 paragraph 1 letter b of the Swiss Code of Obligations (CO) states that the tenant may request a reduction in the initial rent if he believes that the landlord has "substantially" increased the rent for the same thing compared to the previous rent. According to case law, this is the case if the increase exceeds the last net rent (excluding ancillary costs) by more than ten per cent. Therefore, if you feel that the difference between the previous rent and the rent proposed on the official form is exaggerated, you may dispute the initial rent with the conciliation authority of the Geneva Tribunal des baux et loyers, no later than 30 days following receipt of the rented property. Acceptance of the rented property usually corresponds to the inventory of fixtures at the start of the lease and the handover of the keys.
It should also be noted that a challenge to the initial rent may also be admissible in cases where the rent has not increased in relation to that of the previous tenant. In order to initiate such a challenge, it is sufficient for the new rent to appear unreasonable in accordance with articles 269 and 269a of the Swiss Code of Obligations (CO), which establish the principle that a rent may be unreasonable if it enables the lessor to obtain an excessive return from the rented property.
Finally, it should be noted that not all types of property are open to rent disputes. However, tenants of commercial premises do benefit from the mechanisms described above.
