Increase of up to 64 percent Bern pension fund evicts tenants - to increase returns

In Bern, tenants are being evicted more and more frequently due to planned rent increases - even without redevelopment. The Burgergemeinde pension fund defends its actions, while the tenants' association speaks of abuse.

For one tenant from Bern, the termination came as a surprise. "Why didn't the administration talk to those affected first?" he is quoted as saying by the Berner Zeitung newspaper. Last summer, he - along with several other tenants - received notice of termination for his apartment in Bern's Länggass district, effective from the end of July 2026.

Unlike many current cases in the city of Bern, the property is not about to be renovated. Rather, the reason for the terminations is the owner's intention to adjust the rents to the level customary in the area and neighborhood, according to the Berner Zeitung. The tenant has challenged the planned increase with the arbitration board.

Up to 60 percent below market price

The property in question belongs to the pension fund of the Bernese Burgergemeinde. As a pension fund, it is obliged to "invest its funds as carefully as possible and therefore in line with the market and sustainably", a spokesperson is quoted as saying in the report. The foundation has therefore reviewed its entire real estate portfolio. This has shown that the rents in the Länggass district are "no longer in line with the market".

Specifically, the rents for the two-room apartments with attics were in some cases almost 60 percent below the market level. An adjustment during current rental agreements was not legally possible. For this reason, seven tenants had already been given notice of termination in the summer - with a notice period of one year.

The aim was an average increase of 41 percent. Apartments that previously cost 929 francs per month will now be rented out for 1310 francs from August.

Further terminations in Liebefeld and Brückfeld

The foundation followed the same pattern for other properties: on Sägemattstrasse in Liebefeld and on Brückfeldstrasse in Bern. Four tenants in Liebefeld and seven tenants in Brückfeld were given notice to quit.

According to the foundation, the four-room apartments in Liebefeld were 50 percent below the market rate. Rents there were increased by an average of 41 percent from CHF 1,223 to CHF 1,730.

The discrepancy was even greater in Brückfeldstrasse, where some rents were up to 90 percent below market value. The rent for 3½-room apartments with an attic there rose from CHF 1280 to CHF 2100 per month, which corresponds to an increase of 64 percent.

Tenants' association speaks of abuse

The Tenants' Association of the Canton of Bern sharply criticizes the procedure. "Terminations for the purpose of raising rents are abusive", says Managing Director Sabina Meier to the Berner Zeitung newspaper. This would allow owners to undermine the protective mechanisms of tenancy law and rely on "scaremongering".

Should this practice prevail, "all tenants in long-term tenancies would have to fear being forced to pay higher rents through threats of termination". The tenants' association is therefore calling on those affected to defend themselves against such "blackmailing tactics" and to contest terminations.

Legally permissible - but controversial

However, the procedure is legally permissible. According to Federal Supreme Court case law, which goes back to a leading decision from 1994, terminations to optimize income are "generally not considered an abuse of rights", according to Eva Bachofner, lecturer in tenancy law at the University of Bern.

Termination is particularly permissible "if the currently very low rent does not allow for a legally permissible net yield", i.e. does not correspond to the rents customary for the location and neighborhood. This requirement is likely to be met in the high-priced Länggasse and Brückfeld districts.

At the same time, this practice is controversial. In more recent rulings, it is regularly pointed out that terminations to optimize income could in fact constitute a circumvention of the rules on rent increases. "The Federal Court is aware of the discrepancy between its decision-making practice and the statutory rules on rent increases," says Bachofner to the "Berner Zeitung". However, the court has not yet made a final clarification decision.