Facts
The municipal authority of the city of Basel (Plaintiff) is the landlord of a four-room apartment in Basel, which has been rented by [A.] (Defendant) since 1986. In addition, the Defendant has been renting two attic rooms in the same property since 1995. In 1995, the Rent Contribution Act came into force, changing the system so that apartments are no longer subsidized, but individual tenants receive financial assistance if they need it. On 11 September 2000, the Plaintiff notified the Defendant of an increase in the net rent for the four-room apartment from CHF 476.-- to CHF 662.-- as of 1 May 2001. The justification was based on a step-by-step adjustment of the net rent to the "target rent" of CHF 1'036.--. The Defendant contested this rent increase with the State Conciliation Board for Tenancy Disputes. The Court of Appeal of the Canton of Basel-Stadt declared the rent increase null and void, as the justification had not been sufficiently clear.Considerations
The Federal Supreme Court overturns the judgment of the Court of Appeal and remands the case for a new decision to the lower instance. It concludes that the Plaintiff has clearly and unambiguously justified the rent increase for the four-room apartment based on the adjustment…