Austrian Supreme Court Decides Rent Cut Cases

Sept 12, 2025 Benn-Ibler Rechtsanwälte

The Austrian Supreme Court (Oberster Gerichtshof, hereinafter OGH) dealt with the stipulated use of existing property and the right to a rent reduction.

In 1981/1982, the plaintiff in the case at hand had entered into a lease agreement with the defendant for their property to be used for commercial purposes. The written rental contract did not include any undertaking by the defendant to refrain from developing adjacent properties, nor did it establish specific operating hours, define the nature of the business, or delineate requirements regarding the structure in which the operations would take place.

Following the development of the adjacent property, all operations proceeded in accordance with specified conditions

A scrap metal business has been operating at that location. Following the completion of a neighbouring residential complex at the end of 2022, the business has been subject to specific operating conditions. Despite undergoing restructuring, all activities are still conducted on-site, although at reduced volumes and with decreased capacity. The operating hours remain unchanged, as no modifications to the schedule were necessary.

The plaintiff requested repayment of excess rent paid for the year 2023, referencing Section 1096 of the Austrian General Civil Code (Allgemeines bürgerliches Gesetzbuch, hereinafter ABGB). The lower courts rejected the claim, determining that the property retained adequate usability following the construction work. The OGH, however, upheld the rulings of the lower courts.

No entitlement to rent cuts if the leased property remains suitable for its intended use

Pursuant to Section 1096 (1) of the ABGB, if the leased property is unsuitable for its contractually agreed use, the tenant is relieved from the obligation to pay rent for the period and extent of such unusability. The property’s usability is assessed in accordance with the contractual purpose. Unless otherwise specified, it is presumed that the property should meet average usability standards.

A tenant may demand that the landlord and third parties shall not significantly interfere with the stipulated use of the property but may not demand that all conditions and circumstances existing at the time of conclusion of the contract remain unchanged.

The (usual) subsequent development of previously undeveloped neighboring properties is a circumstance that must be expected at any time in urban areas and does not in itself give rise to a claim for a rent cut.

OGH 6 Ob 118/25h (13 August 2025)