Facts

Parties and contractual relationship: The complainant (landlord, A. AG) and the respondent (tenant, B.) concluded a lease agreement on 30 March and 4 April 2017, respectively, for a 2-room apartment in Zurich (4th floor). The agreed monthly net rent was CHF 1,060.- plus advance payments for heating, hot water and operating costs. The previous rent was CHF 738.-. The landlord justified the increase by reference to the adjustment to local and neighbourhood conditions.

Procedural history:

  • First instance (Zurich Rent Court): Judgment of 26 August 2019: The initial rent of CHF 1,060.- was declared abusive and retroactively set at CHF 855.-.
  • Appeal (Zurich Higher Court): Judgment of 2 March 2020: Confirmation of the first-instance judgment.
  • First Federal Supreme Court appeal (4A_183/2020): Judgment of 6 May 2021 (BGE 147 III 431): Set aside and remittal to the Higher Court for a new decision, as the requirements for rebutting the presumption of abusiveness had been applied too strictly.
  • Second appeal (Zurich Higher Court): Judgment of 17 January 2023: Confirmation of the first-instance judgment; the landlord had not rebutted the presumption of abusiveness.
  • Second Federal Supreme Court appeal (4A_121/2023): Judgment of 29 November 2023: Allowance of the appeal; the initial rent of CHF 1,060.- is declared not abusive.

Considerations

Binding effect of the remittal decision: The Federal Supreme Court emphasises that both the Federal Supreme Court itself and the cantonal courts are bound by the legal assessment of the remittal decision (BGE 147 III 431). The lower court may not examine the facts under different legal aspects CO apply stricter requirements than those specified in the remittal decision (para. 3).

Rebuttal of the presumption of abusiveness: The presumption of abusiveness of an initial rent for residential premises in an old building (Art. 269a CO) can be rebutted if the landlord raises justified doubts as to its correctness. This may be done by means of comparable objects, statistics CO other indicia. The requirements for such indicia are lower at the stage of rebuttal of the presumption than when strict proof of local and neighbourhood conditions is required (paras. 4.1–4.4).

Assessment of the lower court’s findings: The lower court applied the requirements for comparable objects and the consideration of the long previous tenancy too strictly. It wrongly excluded comparable objects, in particular those at the neighbourhood boundary, and did not give sufficient weight to the significance of the long previous tenancy (20 years). The Federal Supreme Court clarifies that it is sufficient if comparable objects are obviously not comparable, while for location, noise pollution may not be…