Zug, 18.04.2024

Protection for tenants in Zug

The flat rate for’ general cost increases’ has been halved. Simona Dognini, head of the Zug conciliation authority for tenancy and leasehold law, explains what this means and how tenants can defend themselves in the event of increases above this limit.

Rents are rising – in part due to "general cost increases". These include operating costs that are not separately itemised as ancillary costs, such as insurance premiums. On the other hand, however, they also include maintenance and repair work on the house or flat. If such costs arise, landlords can pass the increase on to the rent each year.

To ensure that tenants are not confronted with unjustified costs, the Zug arbitration authority for tenancy and leasehold law (Schlichtungsbehörde für Miet- und Pachtrecht) decided last year that these rent increases may not exceed 0.25% of the total rent. The authority thereby halved the "flat-rate cost allowance", which serves as a guideline for landlords and tenants. The new flat rate of the canton of Zug has been in force since this April.

Flat rate no longer applies to new rental flats and houses
According to Simona Dognini, the reason for this was the experience gained from the numerous arbitration cases last summer. She is head of the Zug conciliation authority for tenancy and leasehold law, which mediates between landlords and tenants in cases of conflict. "Under the old rules, landlords had to prove the cost increase to the arbitration authority. It's a tedious calculation," she said. In around 80% of cases, the supporting documents were not submitted sufficiently, she estimates, and, as a result, numerous proposed rent increases were reduced.

Feldpark houses, just off the Nordstrasse in Zug  Photo: Matthias Jurt

The new flat rate is lower. In return, landlords no longer have to provide evidence of cost increases to the arbitration authority in the event of disputes. Simona Dognini considers a cap of 0.25% to be appropriate. "This increase reflects the experience of the property industry and the experts."

There is also another change: no flat rate increase may be charged for newly-built rental flats and houses. Simona Dognini adds: "We assume that no cost increases are possible in this case." These are only possible for rental properties that are more than six years old.

Tips for tenants
The Zug conciliation authority expects the changes to result in fewer complaints, as the regulations are now clear. "And neither party has an interest in going to court," says Simona Dognini. The new directive is already having an effect: "Many landlords already accepted the new flat rate in January."

In the event that the rental property becomes neglected, the increase can be contested with the conciliation authority. "The tenants can argue that they assume that the landlords have not incurred any cost increases." There is a possibility that the authority will then suggest that the increase is not legal.

Simona Dognini advises tenants who wish to contest a rent change to seek advice in advance. For example, from the advice centre (Beratungsstelle) of the Zug conciliation authority for tenancy and leasehold law. Or from the Tenants' Association (Mieterinnen- und Mieterverband). An important point here: the application must always be submitted within 30 days of receiving the amendment to the rental contract. Otherwise, the contract amendment will become irrevocably effective.

Requesting help
The Zug conciliation authority (Schlichtungsbehörde) for tenancy and leasehold law can be contacted on Mondays to Tuesdays and Thursdays from 2.30 pm to 5.30 pm on 041 728 37 30; or by email at miet.zug@zg.ch.