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How to calculate your rent ?

The tenant must know exactly what he is paying for and must ensure that his rent is calculated correctly.

If you already rent space, please see what’s your current rent. This will be your benchmark.

If you pay rent for premises, storage, parking, showroom, etc. make sure you list all of these premises separately.

Make sure you rental rate is quoted in a set of two terms:

  • Base rent per sqm of office/parking/storage/atelier/production separately, and

  • Operating expenses/charges per square meter rented.

This division is done to specifically show the net price per sqm and to agree on all the additional operating cost and to split the responsibility for covering these costs between the landlord and the tenant. The structure breaks out who is responsible for what operating costs.

Pay attention to the definition base rent per sqm and double check for which sqm you are paying: rentable/usable, as these two may not be the same. Check how the square meters are calculated, and make sure you are not overpaying.

Leases vary greatly as to what is included in the operating cost. In addition to rent on the actual space, you may be paying for repairs and maintenance to your unit or the entire building and grounds, utilities, property taxes, insurance, janitorial services, security costs, and more. Other times, the landlord pays for some or all of these costs. Know who is paying for what and, if you are paying for variable costs, see if you can negotiate a cap on these costs so you don’t face an unpleasant surprise.

Operating expenses should be paid for the services effectively used and they are also calculated on a per sqm basis. Whenever possible, try to pay directly in accordance with consumption/meter directly to service providers for the service used.

Maintenance and Repair Clauses

While residential leasing often places the burden of maintenance and upkeep on the shoulders of the landlord, commercial leases are different. Just because the landlord owns the building, it would make sense to believe that they are responsible for repairs and upkeep, but this is not always the case.

Commercial leases vary in their approach to this. Some stipulate that the tenant is responsible for all property upkeep and repairs (this is often the case if tenant is the sole occupier of the whole building), while others specify that the tenant is responsible for systems such as the air conditioning, plumbing, etc. Check your lease—in addition to stating who is responsible for what, it may also contain the monetary limits on how much the tenant must pay for maintenance and repair.

Under the Swiss law the landlord is responsible for maintenance of the building structure and all structural repairs of the property, even if the building is let to the single tenant.

Check your lease—in addition to stating who is responsible for what, it may also contain a monetary limits on how much the tenant must pay for maintenance and repair.

Common area maintenance

Some leases, in addition to rent and operating expenses may have separate charge known as common area maintenance, also known as “CAM”, although in Switzerland they are usually included in the charges. CAM refers to the additional money a tenant pays over and above the base rent. CAM charges cover certain expenses that the landlord incurs to manage common areas. A common area definition is determined lease by lease, but it typically includes areas such as the parking lot, sidewalk, green areas, etc. Therefore, CAM charges usually cover, among others: snow removal, landscaping, repaving, etc.

Common area maintenance is usually charged in proportion to number of sqm rented by a tenant’s and is typically an area that landlords do not like to negotiate on. The reason for this resistance is because landlords like consistency, especially with respect to cash flow. It creates additional work for the landlord if some tenants are paying for CAM and some are not.

However, you should negotiate in your lease a right to audit the charges incurred annually. You should agree in your lease that your service charges are covering only the actual costs incurred, and the landlord does not have the right to add any charges unless they have been pre-agreed with the tenant.

If the landlord uses a method that charges its tenants retroactively according to the actual CAM costs it incurred, then you should agree to this but also require a cap on the amount CAM charges can increase year over year.

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