Tenancy law in the Canton of Basel-Stadt: New rules for housing shortages

Increased protection for tenants in the canton of Basel-Stadt. That is changing.

The Canton of Basel-Stadt has strengthened tenant protection in times of housing shortages. For landlords, this means less freedom when it comes to determining rents and more bureaucracy. An overview of the most important changes.

New provisions on tenant protection are in force in Basel

In November 2021, voters in the Canton of Basel-Stadt approved the "Yes to real residential protection" initiative. The initiative is intended to provide better protection against rent increases for tenants, as well as to counteract mass termination and early renovation.

The new legal provisions apply during times when housing is in short supply, i.e. when the vacancy rate in the canton is 1.5% or lower. Whenever this is the case, real estate owners must comply with new requirements and obligations when renovating, constructing new replacement buildings, and establishing condominiums. Said requirements and obligations include additional permit procedures and time-limited rent controls, for instance.

There is a housing shortage in the Canton of Basel-Stadt

There is a housing shortage in the Canton of Basel-Stadt

Source: Statistical Office of Basel-Stadt
Last data point: June 1, 2022

What changes are being made with the stricter tenant protection in Basel-Stadt?

The new law has far-reaching consequences for landlords. The main points are:

  • Cap on rent increases for conversions and renovations, as well as for net rental interest for new replacement buildings. In new replacement buildings, the creation of additional residential space is excluded.
  • Control of rent surcharges for five years
  • Right of return for tenants if the residential renovation was carried out in unoccupied condition
  • Authorization requirement for the establishment of condominiums in existing properties of four or more apartments

The Wohnschutzkommission – WSK [Housing Protection Commission] is responsible for determining the maximum surcharges and net rental interest, carrying out rent controls, and issuing the corresponding authorizations.

Requirements for rent increases during housing shortages

The maximum rent surcharge is calculated separately for each apartment based on the transferable investment costs as part of the renovation or new replacement building. Structural activity may only be taken into account for the calculation if it meets certain requirements. For instance, if it becomes necessary because the life cycle of individual components is over. Other conditions include the preservation of the existing building structure and the previous standard of the living space, as well as the achievement of lower energy consumption.

After determining the transferable investments, the maximum rent increase can be calculated. The figure is halved and multiplied by the current transfer rate (as of May 2022: 2.315%). The result is the maximum annual rent increase.

If the tenants can remain in their apartments during the conversion or renovation, the owner can carry out the project using the simplified permit procedure. This reduces expenses, but also limits rent adjustments per month. In this case, they must remain below the statutory flat rate. Said flat rate is currently CHF 80 for one-room and two-room apartments, CHF 120 for three-room apartments, and CHF 160 for apartments with four or more rooms. You can ask the Housing Protection Commission (WSK) for information about the current flat rate amount.

Maximum rents for new replacement buildings in the case of a housing shortage

In the case of apartments that replace demolished housing, net rental increases are limited. They may not exceed a specified maximum amount. The permitted rent is measured based on the number of rooms and the land value category of the apartment. In addition, the owner must grant the tenants a right of return to the apartment or a comparable living space in the converted property.

Exceptions to the authorization obligation

The new regulations generally apply to all properties in the Canton of Basel-Stadt. However, exceptions apply to small properties with fewer than four apartments. They are exempt from the above authorization obligations. Likewise, the rules do not apply to housing that is additionally created. For example, if a new replacement building is built one floor higher, these apartments are not subject to the rent ceiling.

What does the current situation on the real estate market mean for you personally? We would be happy to help.

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