Recently, the reference rate was lowered again, from 1.5% to 1.25%. This gives tenants the opportunity to request a reduction in the rent on the next termination date. In return, the landlord often claims an increase in general costs, which cancels out a large part of the savings. The landlord, for his part, is allowed to increase the net rent to take account of inflation (40%) and the general increase in costs. The latter is particularly important: it should cover various cost centres that are not included in the service charges, e.g. house cleaning costs, water, etc.

In practice, this cost increase is compensated by adding a flat rate of 0.5 to 1% of the net rent. This can significantly reduce the amount of the rent reduction: if the landlord increases the rent by one percent for each year since the last rent was fixed, less than three years are sufficient to offset the savings resulting from a 0.25% reduction in the reference rate.

The Federal Court does not protect this practice. It has stated several times that the application of a flat rate is in most cases inadmissible. It is the landlord’s responsibility to calculate the true extent of the cost increase and to provide evidence of it at the tenant’s request. This is usually not the case. It is questionable that the conciliation authorities not only approve of this practice, but even encourage it. The Zurich arbitration authorities, for example, incorporate the relevant calculation basis in their own rent calculator ( In the city of Zurich of all places, where rents are already high, the highest rate of 1% is often applied.

It is understandable and justifiable to want to simplify the calculation. However, this often seems to be at the expense of the tenants, i.e. of all those who are disadvantaged by the asymmetry of information. Many do not even notice this increase or consider it unavoidable. In contrast, landlords are usually professionally represented and are able to calculate the exact development of costs.

Tenants do not have to put up with the lump-sum charge. They have the right to demand the exact calculation of the cost increase from the landlord. If the landlord refuses to do so, the tenant can challenge this decision at the arbitration board. It is also possible that the tenant demands a lower flat rate, e.g. 0.5% – or even lower: the above-mentioned rent calculator of the conciliation authorities allows a flat rate of 0.25% – instead of 1%. This alone can lead to savings of several hundred francs per year.

The following example, with a monthly net rent of CHF 1,800, illustrates this: If the last rent adjustment in October 2017 took place shortly after the last reduction of the reference rate from 1.75% to 1.5%, a new application as of the beginning of October 2020 would result in a reduction of approximately CHF 400 per annum at a flat rate of 0.25%, approximately CHF 240 per annum at a flat rate of 0.5%, while a flat rate of 1% would even result in an increase in rent. If the last rent adjustment took place 2 years earlier when the reference rate fell from 2% to 1.75%, the amounts would be approximately as follows: 900 francs a year with a flat rate of 0.25%, 625 francs with 0.5% and 85 francs with 1%. In principle, the longer the last rent adjustment was made, the greater the impact of the cost increase.