On 21 March 2025, the Federal Council adopted an amendment to the Ordinance on the Rent and Lease of Residential and Commercial Premises (VMWG), which will enter into force on 1 October 2025. This amendment concerns the extension of the form for notifying the initial rent and aims to increase the transparency of tenancies. Specifically, landlords will in future have to state the most recent values for the reference interest rate and the national consumer price index (CPI) in addition to the previous rent.
Background to the amendment to the ordinance
Rents in Switzerland are based on various factors, including the reference interest rate and inflation as measured by the CPI. The disclosure of these values should enable tenants to better assess the initial rent charged and, if necessary, to challenge it. The development of these indicators can provide an indication of the appropriateness of the rent. Other criteria such as the net yield or the rents customary for the location and neighbourhood remain unaffected by this change.
Affected cantons and implementation
The amendment particularly affects cantons that have introduced an obligation to fill in forms for the letting of residential property. This obligation currently applies in full in the cantons of Basel-Stadt (BS), Fribourg (FR), Geneva (GE), Lucerne (LU), Zug (ZG) and Zurich (ZH) as well as partially in the cantons of Neuchâtel (NE) and Vaud (VD). These cantons are now required to adapt their forms accordingly by 1 October 2025 and ensure that private landlords also use the updated forms. Failure to do so could result in the rental agreement being deemed invalid with regard to the amount of the initial rent.
Changes to graduated rental agreements
In addition to the extension of the initial rent form, the Federal Council has also decided to make changes to graduated rental agreements. Previously, rent increases for such contracts had to be notified on an official form. From 1 October 2025, the written form will suffice for this, meaning that an official form will no longer be required.
Practical implications and recommendations
The additional transparency represents a considerable advantage for tenants. For the first time, they will have a comprehensible basis for comparison to assess whether the newly set rent is reasonable. This strengthens their position with regard to possible disputes under Art. 270 CO. Particularly in tight housing markets such as Zurich or Geneva, where rents can fluctuate considerably, knowledge of the last rent and the development of the legal parameters is crucial. Prospective tenants should therefore get into the habit of carefully checking this information on the form and seeking legal advice in the event of any ambiguities or significant deviations. It is advisable to keep a record of the information, especially in the event of a later challenge.
For landlords – regardless of whether they are professional property managers or private owners – the change brings with it an additional compliance obligation. The correct and complete use of the new form is mandatory. Failure to do so will not only result in legal disputes, but there is also a risk that the initial rent will be declared invalid by the rental court and adjusted retroactively. Landlords should therefore review their administrative processes and templates by the time the change comes into force at the latest and adapt them if necessary.
In addition, landlords should regularly monitor the development of the reference interest rate and the CPI in order to be able to correctly calculate and communicate objectively justified rent adjustments. The application of the new regulation is not purely formal in nature – it also requires a solid understanding of the parameters of tenancy law.
Conclusion and outlook
The amendments to the VMWG adopted by the Federal Council strengthen transparency on the Swiss rental market and promote a more balanced relationship between tenants and landlords. The mandatory disclosure of the last rent and the relevant indicators such as the reference interest rate and the national consumer price index creates a greater degree of comprehensibility and enables new tenants in particular to make an informed decision.
This reform is a response to the increasingly tense situation on the housing market in urban areas and can be seen as a step towards fairer rent pricing. At the same time, confidence in the tenancy law framework is strengthened, as government transparency requirements represent a preventative protection mechanism against abusively excessive initial rents.
The Federal Council has signalled that the topic of tenancy law will remain on the political agenda. In this respect, further legislative initiatives can also be expected in the medium term, for example in connection with the digitalisation of tenancy law or the promotion of comparison platforms. It therefore remains crucial for legal practitioners and stakeholders to keep a close eye on developments and prepare for possible new regulations at an early stage.
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