New Decision Regarding Clauses in Rental Agreements (Part 1)

Aug 1, 2025 Benn-Ibler Rechtsanwälte

In the case at hand, the Austrian Chamber of Labor (Arbeiterkammer) has initiated legal proceedings against the defendant company regarding the validity of 34 clauses in rental agreements. A partial judgment upheld 30 of these clauses as invalid. In its current decision, the Austrian Supreme Court (Oberster Gerichtshof, hereinafter OGH) addressed the remaining four disputed clauses. The first two clauses are discussed in this USANCEN edition.

Clause 13:

Should the landlord refrain from exercising the rights associated with the value guarantee, even over an extended period, such inaction shall not be interpreted as a waiver of the value guarantee’s applicability.

The OGH has clarified that the mere non-exercise of a right does not, by itself, amount to an implied waiver. An implied waiver can only be established if, after a thorough assessment of all relevant circumstances, there is no reasonable basis to question the existence of such a waiver.

As the clause does not alter the legal position of the tenant to their detriment, it is neither excessively disadvantageous nor otherwise improper. Accordingly, it is deemed permissible.

Clause 21:

The tenant relinquishes any entitlement to compensation under Section 1097 in conjunction with 1037 of the Austrian General Civil Code (Allgemeines bürgerliches Gesetzbuch, hereinafter ABGB) for investments they have made. This means the tenant is not eligible for reimbursement of useful expenditures unless the landlord was required to undertake these expenses.

Pursuant to the case law of the OGH, a tenant’s advance waiver of claims for compensation for useful expenses (Section 1097 of the ABGB) is permissible and legally effective. This approach recognizes the landlord's legitimate interest in mitigating unforeseen financial liabilities, while allowing the tenant the discretion to determine whether to undertake useful improvements at their own cost.

Clause 21 is therefore also permissible and not grossly unfair or non-transparent.

OGH 9 Ob 31/25m (27 May 2025)