Austrian OGH on Rent Increase

Jan 24, 2025 Benn-Ibler Rechtsanwälte

The Austrian Supreme Court (Oberster Gerichtshof, hereinafter OGH) has ruled on the circumstances in which an increase in the ‘actual rent’ (in Austria: Hauptmietzins) due to an indexation clause is invalid.

In the case at hand, the tenant plaintiff and the defendant landlord had entered into a lease agreement containing an indexation clause.

After the defendant had increased the actual rent on the basis of this indexation agreement, the tenant applied for a declaration that the rent increase was invalid and that the legally permissible rent had been overcharged.

The application was dismissed by the court of first instance. The court of appeal overturned the decision and found that the defendant had exceeded the legally permissible interest rate. The increase was therefore invalid.

The decision of the court of appeal was confirmed by the OGH.

If the application of an indexation agreement leads to a higher actual rent than is permissible at that time according to Sections 16 (1 to 7) of the Austrian Tenancy Act (Mietrechtsgesetz, MRG), the excess amount is invalid. The maximum allowable rent must not be exceeded at the time of the application for an increase (specifically, on the interest payment date on which the application for an increase is to take effect).

A claim must be made in court within three years for the invalidity of an increase in rent resulting from the application of an indexation clause. However, according to OGH case law, an independent review of a rent increase based on an indexation clause is possible regardless of whether the three-year limitation period for reviewing the main rent has already expired. Therefore, there is a right of review even if the rent (without indexation) is no longer legally subject to the right of review.

OGH 5 Ob 74/24d (14 November 2024)