Rent is set in the tenancy contract and is the tenant's central obligation. A distinction is made between the net rent (also base rent) and the ancillary costs: the net rent covers use of the property, the ancillary costs the consumption-based operating costs such as heating and hot water. Together they form the gross rent. Rent may not be abusive: under tenancy law (Art. 269 ff. CO) it is abusive if the landlord thereby obtains an excessive return or it is based on an obviously excessive purchase price.
An important mechanism is the link to the mortgage reference interest rate. If this nationwide rate falls, the tenant can demand a rent reduction; if it rises, the landlord may – observing the deadlines and formal requirements – announce an increase. Other grounds for adjustments are inflation (consumer price index), higher maintenance costs and value-enhancing investments such as renovations. Increases must be communicated with an official form and justification, respecting the notice period.
The initial rent is specially protected: if a new tenant moves in and the rent is significantly above that of the previous tenant, they can challenge it within 30 days at the conciliation authority – especially in regions with housing shortage. Several cantons (e.g. Zurich, Vaud, Geneva, Zug, Basel-Stadt, Fribourg, Neuchâtel) therefore require a form disclosing the previous rent. A typical benchmark rent is hard to state, as it depends heavily on location, size and condition – in city centres CHF 25 to 35 per m² per month are not unusual (no guarantee).
Rent concerns virtually all tenants and landlords. For tenants it is worth checking for an adjustment whenever the reference rate falls and questioning the initial rent when moving in. For landlords the formally correct announcement of increases is decisive, otherwise they can be challenged. In case of disagreement, the free conciliation authority for tenancy matters is the first point of contact.