Facts
The plaintiff, [A.] , and the defendants, [B.] and [C.] , are parties to a rental agreement. The defendants have been tenants of a part of the property [X.] since August 1, 1995, and the plaintiff is the landlord. In September 1998, various renovation work was carried out at the request of the defendants. The plaintiff notified the defendants on March 5, 1999, of a rent increase to CHF 1,328.05 as of October 1, 1999, which included a reduction due to a decrease in mortgage interest rates and an increase due to value-enhancing investments.
The rent court declared the rent increase demanded by the plaintiff to be admissible up to the amount of CHF 1,264.20 as of October 1, 1999. The High Court of the Canton of Zurich confirmed the judgment. The plaintiff appealed and requested that the rent increase announced as of October 1, 1999, in the amount of CHF 1,328.05 per month be declared not abusive to the extent of CHF 1,322.80.
Considerations
The Federal Court examined whether the renovation work carried out by the plaintiff could be qualified as a comprehensive overhaul within the meaning of Art. 14 para. 1 sentence 2 RRBPO. The plaintiff argued that the work should be qualified as a comprehensive overhaul and that therefore a share of 50% to 70% of the costs could be passed on to the defendants as value-enhancing investments.
The Federal Court found that the work was limited to two clearly defined categories of work, namely kitchen and window renovations. It examined whether the value-maintaining and value-enhancing share could be determined individually. The court came to the conclusion that the value-enhancing share for the kitchen renovation could be set at 60% and that a value-enhancing share…