Austrian OHG on Capitalisation and Running Costs

Feb 7, 2025 Benn-Ibler Rechtsanwälte

The Austrian Supreme Court (Oberster Gerichtshof, hereinafter OGH) has ruled on two clauses contained in a tenancy agreement.

In the case at hand, the plaintiffs are the tenants of a condominium apartment. In July 2020, they signed a provisional rental offer prepared by the defendant’s manager in the presence of the manager. The lease contained, among other things, the following parts:

7. Capitalisation guarantee:

[…] 7.2 The main rent shall not be subject to review until one year has elapsed since the commencement of the tenancy. A review may be requested if there has been an increase or decrease of at least 5% in the relevant consumer price index figure since the last main rent review.

8. Total running costs:

[...] Running costs are

in particular, the types of maintenance costs listed in Section 21 of the Austrian Tenancy Act (Mietrechtsgesetz, hereinafter MRG), the administrative costs listed in Section 22 of the MRG, the costs for property management listed in Section 23 of the MRG, as well as public levies and special expenses.

The plaintiffs’ claim was for reimbursement of more than EUR 16,000. They claimed that they had erroneously paid this amount as running costs and capitalisation of rent increases, although they believed that these provisions were invalid.

The claim was dismissed by the court of first instance. The court of appeal dismissed the appeal and upheld the judgment of the court of first Instance. The OGH delivered the following judgment, stating these reasons:

Transparency requires that the content and scope of standard contract terms be comprehensible to consumers. The aim is that consumers should not be deterred from the exercise of their rights or be subject to unjustified obligations.

Clause 8 of the lease is non-transparent and therefore null and void. It leaves the plaintiffs in the dark as to what constitutes running costs and what costs they will ultimately incur. Consequently, there is no legal basis for the payment of such costs, and the sums paid are therefore recoverable.

Point 7.2 of the maintenance clause provides for two situations that could lead to the rent changing. In both cases, however, the rent can only be increased after one year having elapsed since the start of the lease. This provision therefore is in line with the OGH’s case law.

OGH 10 Ob 54/24z (17 December 2024)