Austrian VfGH: The ‘Orderer’s Principle’ Is Constitutional

Apr 18, 2025 Benn-Ibler Rechtsanwälte

Since 1 July 2023, in Austria the ‘orderer’s principle’ (Bestellerprinzip) has applied to the letting of residential property. The Bestellerprinzip refers to a policy in Austria’s real estate market that whoever hires an estate agent to arrange a tenancy agreement must also pay the agent’s commission. The aim of this regulation is to prevent financially weaker tenants from being overwhelmed by the cumulative costs at the beginning of a tenancy.

In the case at hand, the applicant is the owner of a plot of land and an apartment building with 20 rented flats in Vienna. He filed an individual application with the Austrian Constitutional Court (Verfassungsgerichtshof, hereinafter VwGH).

The plaintiff argued that the ‘first customer’ criterion described in Section 17a(1) of the Austrian Real Estate Agents Act (Maklergesetz, hereinafter MaklerG) is not an objective criterion for the obligation to pay remuneration, since the services of an estate agent are of equal benefit to the landlord and the tenant.

The VwGH failed to find that the Act violated the Principle of Equality. Section 17a of the MaklerG establishes the ‘first client principle’ for commission agreements for the brokerage of residential leases. The estate agent can only agree on a commission payment with a tenant if the tenant is the first client of the estate agent with an agency contract. If, on the other hand, the landlord approaches the estate agent first, the estate agent cannot agree a commission with the person looking for accommodation.

The VwGH also failed to see that the right to ownership was violated.

Section 17a(5) of the MaklerG prohibits landlords from agreeing to certain performance obligations of tenants in connection with brokerage activities and the conclusion of a contract. If a landlord agrees to a tenant's performance obligation in contravention of Section 17a(5) of the MaklerG, this agreement is invalid. However, this encroachment on private autonomy does not raise any constitutional concerns. The aim of the contested provision is to relieve tenants of financial burdens, to enable them to satisfy their housing needs, and to protect them from any relationships of power on the market.

As a result, the individual application was dismissed as unfounded.

VfGH G 168/2024 (27 February 2025)