Facts
The spouses X. (tenants) are tenants of a 3-room apartment in Z., the owner of which is the Y. Investment Foundation (landlord). Due to high ancillary costs resulting from a heating defect, the tenants threatened to deposit the rent with the State Conciliation Board for Tenancy Disputes (SSM). After the defect was remedied, the tenants nevertheless deposited the rent for April, May, and June 2010 with the SSM. Thereupon, the landlord terminated the tenancy agreement due to arrears in rent payment. The tenants contested the termination with the SSM, which declared it invalid. The landlord then filed a lawsuit with the Civil Court of Basel-Stadt, which dismissed the claim. However, the Court of Appeal of the Canton of Basel-Stadt overturned this judgment and ruled that the tenancy agreement had been terminated as of June 30, 2010.
Considerations
The Federal Supreme Court dealt with the question of whether the requirements for termination due to arrears in rent payment pursuant to Art. 257d CO were met. It concluded that the tenants had wrongfully deposited the rent, as the defect complained of had already been remedied at the time of the deposit. Therefore, the deposit could not have a discharging effect. Furthermore, the tenants had not offset their claims for rent reduction and…