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Old 05.07.2016, 10:56
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Rent increase reservation on new contracts

Hi,

I am reviewing a rental agreement for a new apartment. There is a curious section about a Rental Reservation. Basically stating that the rent could go up over the course of the tenancy by 27%. I checked with the Mieterverband, they told me some agencies do this, just a tick box; if they ever do action it I would have 3 months notice and would have to sign to agree etc. (and could contest it). So they are OK with it. ....But it is making me a little nervous. 27% increase on a >3K CHF a month rent is not something I would like to deal with!

This is the entry on the contract:

Mietzinsvorbehalt

Artikel 18 (Verordnung uber die Miete und Pacht von Wohn- und Geschaftsraumen, VMWG) Der Mieter nimmt zur Kenntnis, dass der Vermieter mit dem vertraglich vereinbarten Mietzins derzeit nicht den gesetzlich
zulassigen Ertrag (Art. 269 und 269a des Schweiz. Obligationenrechts OR) erzielt. Der gesetzlich zulassige Ertrag wird
aus den folgenden Grunden unterschritten

Nicht kostendeckende Bruttorendite

Vorbehalt Total 27%



I contacted the agent who replied that it is just a reserve because the property is not very old. But if one day I requested a reduction [rent], it will be a part of the calculation. [??]


Has anyone else seen this on their rental contracts or been through an increase over the course of their tenancies?
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Old 05.07.2016, 11:15
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Re: Rent increase reservation on new contracts

A Mietzinsvorbehalt is normal. 27% appears to be VERY high.

What really is the kicker is "Nicht kostendeckende Bruttorendite" - "gross rental income does not cover cost". With that, anything can be argued.

With this in your contract, net rent (before additional expenses!) may be increased by up to 27% (in stages), and there is nothing that you can do about that, given that you signed that contract in the first place.

You can forget about rent reduction. And the mortgage reference interest rate probably will stay as it is for some time to come.

Also, given that this is a new property, as you say, pay close attention to the additional expenses. If they do not have any history on those, they might have been tempted to put in a number which is too low, so the final bill may result in a large amount of dues.

Take it or leave it.
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Old 05.07.2016, 11:16
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Re: Rent increase reservation on new contracts

Many years ago a friend of mine had something similar in her contract. You don't state how long the contract is for, so the 27% increase is a bit meaningless.

I have been in a 3 room apartment in the center of Geneva, with a rent of less than Sfr 900,-- per month, the owner cannot raise the rent until the tenant leaves, & so these clauses are there to ensure the owner gets a reasonable rent. If the Mieterverband are satisfied, then you could sign it.
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Old 05.07.2016, 11:25
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Re: Rent increase reservation on new contracts

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A Mietzinsvorbehalt is normal. 27% appears to be VERY high.

What really is the kicker is "Nicht kostendeckende Bruttorendite" - "gross rental income does not cover cost". With that, anything can be argued.

With this in your contract, net rent (before additional expenses!) may be increased by up to 27% (in stages), and there is nothing that you can do about that, given that you signed that contract in the first place.

You can forget about rent reduction. And the mortgage reference interest rate probably will stay as it is for some time to come.

Also, given that this is a new property, as you say, pay close attention to the additional expenses. If they do not have any history on those, they might have been tempted to put in a number which is too low, so the final bill may result in a large amount of dues.

Take it or leave it.

thanks. I havent signed it yet - considering maybe to contest this bullet point. Yes 27% is a bit shocking, and the agent seems a bit le se faire in her response.

I did ask about the nebenkosten, whether it has been appropriate for the past 1-2 years and I was told that it was. Guess I take their word for it.

I dunno... Mieterverband says its OK but that one point is holding me back. I also dont know what to propose to amend it. Maybe i''ll bite the bullet and ask for it to be removed. see what they say.
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Old 05.07.2016, 11:28
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Re: Rent increase reservation on new contracts

Full marks for asking before you sign though.
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Old 05.07.2016, 11:44
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Re: Rent increase reservation on new contracts

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Many years ago a friend of mine had something similar in her contract. You don't state how long the contract is for, so the 27% increase is a bit meaningless
The contract is stated as being of indefinite duration, which can be cancelled with 3 months notice.

I really like the apartment and would be gutted to not take it due to this clause on the contract. After all, it was HELL finding something over the past year, with the many disappointing viewings, unhelpful and uninformative adverts etc etc. So, I might still take it, on the basis that if they try to notch up the rent I have 3 months to get out! Or does that sound crazy
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Old 19.09.2016, 16:12
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Re: Rent increase reservation on new contracts

interested how the OP proceeded - we have a similar clause in our contract with regard to 'Mietzinsvorbehalt'. Interested how you finalised your contract.
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Old 20.09.2016, 18:17
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Re: Rent increase reservation on new contracts

They can't increase a rent while you are in the property. So if you stayed there a long long time, the rent you pay could be well below market rate, and may not even cover their costs. I think it unlikely they will increase by 27% quickly or in one go.
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Old 20.09.2016, 19:05
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Re: Rent increase reservation on new contracts

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What really is the kicker is "Nicht kostendeckende Bruttorendite" - "gross rental income does not cover cost". With that, anything can be argued
"Kostendeckende Bruttorendite" has actually little to do with the actual costs.

Its legal definition is: Referenzzinssatz + 2%. The idea is roughly that 1% is for maintenance, 1% is for profit, and Referenzinssatz is to cover mortgage payments, currently at 1.75% - but likely they are actually paying much less than that. These days it's easy to get even long term mortgages under 1%.

27% Vorbehalt means they're claiming that they earn 3.75% / 1.27 = 2.95% of apartment's cost in rent per year. This is not so high, but more than enough to run a building and make some profit in light of today's sub-1% mortgages.

The real reason they put this Vorbehalt probably is that Referenzzinssatz statistic is going to drop to 1.5% in half a year or so at current rates, which would normally automatically entitle the tenant to request a deduction. For new buildings, "Kostendeckende Bruttorendite" is one of the criterias allowed by law to justify rents. If they didn't put it into the contract, they could still use that criterion to defend the rent later, but would have to carry the burden of proof and show your the books if you fight rent reduction rejection. Now they can just point you to the contract...
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Old 28.07.2018, 22:31
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Berechnungsgrundlagen and Vorbehalte

A section of my new rental contract is titled "Berechnungsgrundlagen", which as I understand talks about how the rental fee has been computed, followed by "Vorbehalte" which I don't understand precisely. There is a percentage mentioned, holding a reservation for something.

Is there anything here I need to pay special attention to?
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Old 28.07.2018, 23:10
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Re: Berechnungsgrundlagen and Vorbehalte

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A section of my new rental contract is titled "Berechnungsgrundlagen", which as I understand talks about how the rental fee has been computed, followed by "Vorbehalte" which I don't understand precisely. There is a percentage mentioned, holding a reservation for something.

Is there anything here I need to pay special attention to?
It allows the landlord to raise the rent for the reasons mentioned in the contract by the time those reasons become valid.
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Old 29.07.2018, 06:28
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Re: Berechnungsgrundlagen and Vorbehalte

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It allows the landlord to raise the rent for the reasons mentioned in the contract by the time those reasons become valid.
Is that a typical clause? I didn't know one can increase the rent. Mine reads " vorbehalte aufgelaufene Reserve aus Berechnungsstand bis Vertragsabschluss 10%". Does that mean they can increase up to 10% the rent?
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Old 29.07.2018, 11:52
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Re: Berechnungsgrundlagen and Vorbehalte

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Is that a typical clause?
From what I understand, yes it's pretty typical. The most common reasons are the landlord completes renovations or the reference interest rate goes up.
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Old 29.07.2018, 12:03
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Re: Berechnungsgrundlagen and Vorbehalte

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From what I understand, yes it's pretty typical. The most common reasons are the landlord completes renovations or the reference interest rate goes up.
So it's not as they wish. True? What does the "10%" mean there? There another line below it reading "Weitere: Kostenfaktoren"
Many thanks
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Old 29.07.2018, 12:16
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Re: Berechnungsgrundlagen and Vorbehalte

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A section of my new rental contract is titled "Berechnungsgrundlagen", which as I understand talks about how the rental fee has been computed, followed by "Vorbehalte" which I don't understand precisely. There is a percentage mentioned, holding a reservation for something.

Is there anything here I need to pay special attention to?



It's written in German and you live in Romadie, the French part ?
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Old 29.07.2018, 12:19
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Re: Berechnungsgrundlagen and Vorbehalte

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It's written in German and you live in Romadie, the French part ?
I'm moving, and that's why I'm asking questions, to make sure I understand the contract before signing it.
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Old 29.07.2018, 14:11
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Re: Berechnungsgrundlagen and Vorbehalte

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So it's not as they wish. True? What does the "10%" mean there? There another line below it reading "Weitere: Kostenfaktoren"
Many thanks
I'm not a contract expert by any means. I've read here on EF that such a clause is common and how it's used - although I don't recall anyone having had the landlord exercise the clause. I think at the very least the landlord has to give you sufficient notice and explanation of the change in price. If you want to get out of your contract early, I believe the raise in rent would be a reason you don't have to find a nachmieter.

ASitUS will probably be along shortly with some helpful links to the legal stuff.
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Old 29.07.2018, 14:44
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Re: Berechnungsgrundlagen and Vorbehalte

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I'm not a contract expert by any means. I've read here on EF that such a clause is common and how it's used - although I don't recall anyone having had the landlord exercise the clause. I think at the very least the landlord has to give you sufficient notice and explanation of the change in price. If you want to get out of your contract early, I believe the raise in rent would be a reason you don't have to find a nachmieter.

ASitUS will probably be along shortly with some helpful links to the legal stuff.
If the raises are agreed upon (which is happening when the reserve is in the contract) they are no reason to not having to find a nachmieter.
(unless the ground for the raise is failing off course.)
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Old 29.07.2018, 14:45
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Re: Berechnungsgrundlagen and Vorbehalte

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So it's not as they wish. True? What does the "10%" mean there? There another line below it reading "Weitere: Kostenfaktoren"
Many thanks
The 10% means that they can raise up to a total of 10% of the original rent.
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Old 29.07.2018, 14:54
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Re: Berechnungsgrundlagen and Vorbehalte

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The 10% means that they can raise up to a total of 10% of the original rent.
They can increase, "if the interest rate is increased" up to 10%. No?
And it applies to reduction as well, no?
My main concern is that does this clause gives them the right to increase rent as they see fit?

Another question: What if the box for "10%" was empty? Does it mean they can increase unboundedly?

And what about "decreasing the rent"? Because it seems interest rates are being decreases right now, no?
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