Facts
The owner of the building located at 8 Vicaire-Savoyard Street in Geneva, company [G. SA], leased a 3-room apartment on the 3rd floor to F. In 1989, the owner company undertook "refurbishment-renovation" works with the authorization of the competent administrative authority. By a notice of increase dated March 8, 1990, [G. SA] increased F.'s rent to 11,604 francs per year, justifying this 35.05% increase in particular by additional services provided by the landlord amounting to 1,926 francs.
F. contested the rent increase, considering it abusive. After the conciliation failed, the owner company brought the case before the Rental Tribunal, which allowed the rent increase by judgment of June 20, 1991. The Rental Appeals Chamber confirmed the judgment of the court of first instance by a decision of April 15, 1992.
Partially admitting F.'s appeal for reform, the Federal Tribunal considered the rent due from July 1, 1990 as not abusive, if it did not exceed 10,764 francs per year.
Considerations
As a general rule, rents justified by additional services provided by the landlord are not considered abusive (Art. 269a(b) CO). Investments resulting in improvements creating added value are considered additional services.
When the landlord undertakes major repairs, it is often difficult to distinguish between routine maintenance work and work creating added value. Art. 14(1) OBLF provides that as a general rule, 50-70% of the total investment has this character of added value. However, this presumption is not irrefutable and the exact rate of value-added work can be determined.
According to the findings of the cantonal court, out of a total investment of 478,682 francs, 252,591 francs constituted value-added work. The Federal…