Facts
The City of [A.] (appellant) had concluded a lease agreement with [B.] (respondent) for a 6-room single-family house. In August 2020, the City informed the tenant that additional obligations under the Ordinance on the Principles of Renting Municipal Dwellings (VGV) would apply from January 2024 onwards. The tenant then filed a lawsuit and requested that the announced unilateral contract amendments be declared null and void or abusive.
The Rental Court and the High Court of the Canton of Zurich upheld the tenant's claim and declared the notice of contract amendment to be abusive. The City of [A.] appealed against this judgment to the DFC.
Considerations
The DFC upheld the appeal of the City of [A.] and set aside the contested judgment. It decided that the unilateral lease agreement amendments announced by the City are lawful.
The DFC stated that the clause on subletting complies with the requirements of Art. 262 CO and is not abusive. The introduction of provisions on the occupancy of the dwelling is also lawful, as it serves the legitimate interest of the City in optimal utilization of the properties and is not in gross disproportion to the interests of the tenant.
Likewise, the introduction of criteria for the tenant's financial situation and income is permissible, as these are publicly subsidized dwellings…