The Zurich “Rental Vote”. What Does It Mean?

by Christian on November 27, 2012


The Zurich “Rental Vote”. What Does It Mean?

When people decide to move to Zurich or arrive here there is one thing that most notice right away — it’s expensive. the city is consistently ranked amongst the most expensive in the world. This is not just a fact for expats, but for many Swiss and longterm residents of the city as well. Recent reports about the Bahnhofstrasse have shown that even for old and established businesses the rents have become hard to pay. On Sunday November 25th residents of canton Zurich were asked to vote on a new initiative backed by the Zürcher Mietverband (ZMV — Zurich Renters’ Association). The high influx of people to canton Zurich from the rest of Switzerland, Europe and elsewhere has seen rent prices shoot up, especially in the Limmat city. At present there are two central issues responsible for high rent prices in the city and canton of Zurich. First, there is a very high demand for flats in Zurich. Second, any new and newly renovated flats have been designed for the upper price segment. If one looks on one will find just under 250 flats in the city of Zurich that are at least 1.5 rooms large and under CHF 2000/month, whereas flats with at least 1.5 rooms and a price starting of CHF 2200/month delivers 675 available flats in the city of Zurich. The two people’s initiatives (Volksinitiative) that were put forth would have required landlords to openly present the rent conditions and price the previous renter paid to new tenants without their explicit request. This is meant to hinder cases like that of Maite Torrente, who took over a lease after subletting the flat and saw the rent go from CHF 1532/month to CHF 1744/month even though the interest rates went down this past year. After having a lawyer get involved the rent was lowered to CHF 1478/month. The ZMV and many others believe that this is unfair and that it should never get to the stage where lawyers are

needed in the first place. Furthermore, many looking for flats and the ZMV argue that with the housing shortage many potential tenants are afraid of asking for information because they are so desperate to get into a flat that they don’t want to “start any trouble.” According to Walter Angst from the ZMV tenants have 30 days after signing a lease contract to request any information regarding the previous terms of rent and to request rent reductions. With the two initiatives landlords would need to present that information before hand and thus the onus would be taken off of tenants to defend themselves against unfair rent increases. The initiatives clearly accused Landlords of withholding this information from new tenants. In a recent article in the Tages Anzeiger, it was reported that many tenants from the same house or settlement will not be approved to switch flats, should they be seeking a larger flat or just to move to a flat with a better view, because they have a good idea of what the rent was and/or should be, and will easily spot if the rent has been raised by too much. Landlords are of course allowed to raise their rents, however, this is also controlled. Principally a new building should have no more than 4.25% gross rate of return and older buildings no more than a 2.75% net rate of return. At present if a tenant believes they are being gouged, it is their responsibility to approach the landlord or rental agency and get the arbitration office involved. If the arbitrator cannot help the two sides come to a settlement them further legal procedures may be necessary, however, most landlords will choose to settle outside of court. This takes time and costs money. The first of the initiatives “Rechtschutz für alle (Mietgericht gebührenfrei)” would have made this free for tenants, for which reason the Canton of Zurich has encouraged constituents to vote against the initiative. Zurich voters followed the adviceof the canton and votes 60% against the initiative “Rechtschutz für alle (Mietgericht gebührenfrei),” which for the cash strapped canton was a blessing On Wednesday November 21, the ZMV issued an open letter inviting the HEV (Hauseingentümerverband: Home owners association) to meet for a roundtable and work on creating a label of “fair landlords”. The goal of such a label would be that landlords and agencies renting out flats will freely and openly show their tenants, especially new tenants, all of the documents regarding the costs of the building, former rent rates and to freely pass on reductions in interest. It is exactly this that the second ballot item on Sunday also aimed to address, though not with a label, but through making it mandatory. The HEV response was that the ZMV should have suggested this earlier and that they would also like to see a label for good renters. The open letter does make one wonder if there was fear by the ZMV that the issue would not pass the vote. For future renters, the second initiative passed with a 52% majority, however, the new law will not come into effect until November 2013. For their part the people of Zurich tamed the real estate shark (Immo-Hai) without asking the state to bare the costs and have set the ball rolling to ensure that the renting scene in the canton becomes more favourable for those seeking new lease objects. The threat that was put forth by the HEV that voting yes would cause a split between tenants and landlords was unfounded, as the yes simply takes the onus off renters to make sure they are not being taken advantage of. Landlords maintain the right to make a profit and to choose their tenants. At present the best way for renters to protect themselves is by joining the ZMV, which provides legal advice and assistance when dealing with landlords. Christian Langenegger Marathon Sprachen Am Wasser 44 8049 Zürich

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