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RENTING

Zurich’s housing woes spark illegal rental practices

The demand for affordable apartments in Switzerland’s largest city is so strong that some tenants have resorted to ‘blackmailing’ candidates for the lease takeover.

Zurich's housing woes spark illegal rental practices
You may be told to purchase the sofa — though children and pets are not included. Photo: Pixabay

As Zurich’s population is climbing steadily, fuelled by a continuing influx of foreigners – a trend that is expected to continue, according to demographers – the housing shortage is worsening. 

So much so, in fact, that a number of unscrupulous tenants who want to break their lease and are looking for suitable candidates to take over their rental contract, feel emboldened to pose some unreasonable conditions.

As the Swiss media reported, one practice which has become more commonplace lately is requiring that those taking over the apartment buy the furniture of the departing tenant.

If they refuse, there are plenty of other prospective tenants eager to fulfil any conditions just to get the foot in – both literally and figuratively.

One example of such advertisement cited by the media states that all the furniture currently in the apartment “must be bought for 3,500 francs”.

Some even go so far as to demand 8,000 francs for used furniture, dishes, and appliances.

This practice is, however, illegal and prospective tenants should not be bullied into it.

“The law prohibits making a lease contract dependent on other commercial transactions,” the newspaper said, adding that in such cases, it is advisable to contact the landlord or property management company directly, rather than deal with greedy tenants.

This unethical tactic is far from unique in Switzerland.

In other cases, rental agencies, rather than tenants themselves, have taken advantage of housing shortages by engaging in similarly unlawful practices.

In Geneva, for example, which suffers from a housing crisis of its own, some agencies were caught charging potential tenants hundreds of francs just to view vacant apartments. 

And that’s not all: Swiss Tenants Association (ASLOCA) found that some property managers routinely charge unwitting tenants fees for services that are either already included in their rent, or ones that shouldn’t have extra costs attached to them.

Among them are “application fees”, with some management companies charging from 100 to 200 francs, ostensibly for preparation of your contract, even though agencies cannot require additional fees for this service.

How can you avoid falling victim to these, and other, such tactics?

Unless you are an expert in tenancy law (which most people aren’t), you could benefit from joining your local tenants’ group.

Not only will it be a good source of information relating to your rights and obligations, and answer any questions about your tenancy, but it will also advocate for you if you ever have a disagreement or conflict with your landlord (provided, of course, that you have a defendable case).

These groups are divided according to linguistic regions, which means you can easily find one in your area:
Swiss German
Swiss French
Swiss Italian

READ ALSO: The common scams foreigners in Switzerland need to be aware of

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RENTING

EXPLAINED: How Switzerland plans to keep rent prices from rising

Rent prices have increased in Switzerland in the past year and even more hikes are on the horizon, prompting the government to devise cost-curbing measures.

EXPLAINED: How Switzerland plans to keep rent prices from rising

Many tenants in Switzerland have been impacted by climbing housing costs.

Among the reasons for this upward evolution is the general housing shortage, with the demand far outstripping the available supply.

Another major factor is the reference interest rate, which is based on the average mortgage rate in Switzerland and plays an important role for current leases.

In 2023, tenants experienced their first increase since 2008: the rate went from 1.25 to 1.5 percent in June, and then climbed to 1.75 percent in December.

Each increase of the reference interest rate has given landlords the right to raise the rent by 3 percent.

That doesn’t bode well for tenants:  according to government calculations, they could face  — depending on the further evolution of the interest rate — rent increases of between 10 and 15 percent by 2026.

READ ALSO : Switzerland sees new rent hike but will yours go up?

Faced with this possibility, the Federal Council devised some measures to curb rents from soaring, at least in the immediate future, which it announced on Wednesday.

What plans are they talking about?

The government strategy is based on four measures:

Removal of the flat-rate fee on general cost increases

Currently, in addition to the increase in the reference interest rate, landlords are allowed to add a lump sum for other items mentioned under ‘general cost increases.’

The new plan would ban this lump sum in favour of the amount based on actual costs.

Lower compensation rate

The Federal Council also wants to reduce, from 40 to 28 percent, the rate intended to compensate for costs of equity capital that landlords can presently offset through rent hikes.

This measure, however, would provide only a minimal relief for tenants:  the government conceded that for a rent of 2,000 francs, this reduction – in the event of a 2-percent increase — would only be 4.80 francs per month.

Notification of rent increases

When increasing rents, landlords will have to inform tenants of their right to contest higher rent on the grounds that it will generate ‘excessive yield’ or that the rent is higher than others charged for similar apartments in the same neighbourhood.

Additionally, landlords will have to disclose to prospective tenants the reference interest and inflation rates determining the old rent.

Procedure for communicating rent increases

During its autumn 2023 session, the parliament decided to modify the procedure for communicating staggered rent increases and rent instalments.

In the latter case, the extent of the increase, which occurs on fixed dates, is defined in advance.

What happens next?

The plan will be under consultation of cantons, tenant associations, and other interested parties until July 11th.

Are there any other rent-reducing proposals on the table? 

The one making news currently involves not rents per se, but measures to improve housing shortage which, in turn, could lower rents.

The Liberal-Radical Party (PLR) is suggesting creating additional living space on top of current residential buildings.

To that end, “building and zoning regulations in Swiss cities must be adapted so as to systematically integrate the raising of one or two floors into urban plans,” the party said.

READ ALSO: Why there is a push in Switzerland to make buildings higher

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