Lighting on leases in Eaux-Vives

Following the article published in the “Tribune de Genève” on December 17 concerning the explosion of rents in Eaux-Vives and the numerous comments from readers, it seems necessary to provide clarifications. The original owner was Rentenanstalt, an insurance cooperative. Variations in the mortgage rate (TH) were passed on to tenants, upwards or downwards. In 1997, the cooperative transformed into an SA under the name Swiss Life.

Concerning the evolution of three-room apartments, the journalist made it clear that this concerns all tenants. The explosion in rents follows the renovation work in 2010. If we only take into account tenants who arrived after 2010, the average rent increased from 10,090 francs. in 2014 at 18,932 francs. in 2023, an increase of 87.63%, the latest leases have rents above 20,000 francs, the maximum being 22,800 francs, an increase of 157.68% compared to 2002.

The Swiss consumer price index (CPI) increased from 100.51 in 2014 to 106.32 in 2023, an increase of 5.77%. At the same time, the TH goes from 2 to 1.5% for the same period. A difference of 0.25% in this index results in a 3% variation in rent. Consequently, the increase in the cost of living was entirely offset by the fall in the mortgage rate, and the increase in rents is abusive. Between 2002 and 2014, the CPI went from 101.43 to 108.17, an increase of 6.64%, the TH from 4.25 to 2%, which corresponds to a drop of 27%. Despite the work in 2010, our members were able to benefit from a rent reduction of up to 9.3%.

Swiss Life justifies the increase by the work carried out. In addition to the 2010 work of 18.7 million, Swiss Life invested 9 million: 4 for the entrances to the buildings in 2023, 5 for the insulation of the roof in 2024. This corresponds to two years of rent collection. As the buildings had not been subject to regular maintenance, a significant part of the work cited by Swiss Life was deferred maintenance. On October 26, 2020, the Federal Court issued a judgment modifying two parameters to determine the initial rent authorized for residential premises and commercial premises based on the net yield. In the future, invested equity will have to be fully adjusted to inflation. A return in excess of the benchmark interest rate of 2% will be considered eligible if the benchmark interest rate is equal to or less than 2%. Unfortunately, for old buildings, the TF decided that a yield calculation could not be requested!

A contestation of abusive rent was filed with the lease and rent jurisdiction. We await with immense interest his decision, which we hope will be published in the “Tribune de Genève”, provided that the owner does not demand confidentiality, which he systematically does. You can download the study and its annexes on our site https://asslocimm.jimdofree.com.

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