OGH: Circumvention transactions in the case of § 5 para 2 WEG

Feb 17, 2023 Benn-Ibler Rechtsanwälte GmbH

Section 5 (2) of the Austrian Condominium Act (Wohnungseigentumsgesetz, hereinafter WEG) favours property owners by means of a 3-year period for the purchase of parking spaces. The purpose of the law requires that a purchase should not only cover the disposition under property law, but also the obligation by transaction. Thus, a derivative purchase by concluding a purchase contract before the expiry of the waiting period violates Section 5 (2) WEG and is thus void pursuant to Section 879 (1) of the Austrian Civil Code (Allgemeines Bürgerliches Gesetzbuch, hereinafter ABGB).

In the case at hand, the first applicant is the owner of parking spaces belonging to a housing complex. She sold twelve of these parking spaces to the second applicant in 2018. The contract states that according to Section 5 (2) WEG the establishment of apartment ownership cannot take place before three years have elapsed. Therefore it was agreed that the transfer of ownership could not take place before this time. However, the usufruct rights pursuant to Section 509 ABGB were agreed as collateral. In 2021, the applicants requested incorporation of the property.

The court of first instance and the court of appeal rejected their application for the incorporation. The Austrian Supreme Court (Oberster Gerichtshof, hereinafter OGH) confirmed this.

By imposing purchasing restrictions such as the one described above, lawmakers want to ensure that priority is given to those apartment owners living on the property. After the expiry of the three-year period, however, no further purchase restrictions apply. Pertinent legal doctrine defines ‘purchase’ only as the constitutive, first-time establishment of ownership; in the case of a derivative acquisition of ownership, these restrictions therefore do not apply. The OGH also cited legal opinions such as those by Dobler and Sollereder, where Section 5 (2) WEG is considered insufficient, as a prohibition of the conclusion of purchase agreements is not covered by this provision. In an earlier decision, however, the OGH stated in a quite different case that property titles were not covered by this restriction. However, it follows from the legal materials that an obligatory connection through a purchase contract runs counter to the intentions of Section 5 (2) WEG. The OGH thus ruled that such a purchase contract must result in nullity according to Section 879 (1) ABGB.

Austrian Supreme Court 5 Ob 121/22p (02.11.2022)