Facts
By a lease agreement dated March 30 or April 4, 2017, B. (tenant, respondent) rented a 2-room apartment in V. from A. AG (landlord, appellant) effective April 16, 2017. A monthly net rent of CHF 1,060.- plus a down payment of CHF 165.- was agreed upon. The previous net rent amounted to CHF 738.- per month (with the same down payments for ancillary costs). The landlord justified the rent increase by "adjusting to the customary local and neighborhood conditions".
By submission dated May 2, 2017, the tenant filed a request with the competent conciliation authority to declare the initial rent as abusive. The tenancy court declared the monthly net rent of CHF 1,060.- as abusive and retroactively set it at CHF 855.- (plus a monthly down payment of a total of CHF 165.-).
The landlord filed a civil law appeal with the Federal Supreme Court and requested that the initial rent of net CHF 1,060.- per month be declared as not abusive.
Considerations
The Federal Supreme Court notes that in the case of a significant increase in rent compared to the previous tenancy - over and above an (enhanced) duty to cooperate - there is a factual presumption of abusiveness. However, this presumption does not already apply when the rent is increased by 10%. Rather, a massive increase in rent of clearly more than 10%, which cannot be explained by the development of the reference interest rate or the Swiss consumer prices, is required.
In order to rebut the presumption of abusiveness, the landlord must raise well-founded doubts about…