OGH: COVID-19 - Contractual waiver of Section 1104 ABGB

Feb 4, 2022 Benn-Ibler Rechtsanwälte

In the case at hand, the Supreme Court (Oberster Gerichtshof, OGH) dealt with the question of whether rent must be paid in the case of a pandemic-related ban on entering the premises despite a contractual waiver of a rent exemption.

The plaintiff operates a shopping centre in which the defendant runs a nail and beauty salon, among other things. Due to the 2020 and 2021 lockdowns, customers were prohibited from using non-basic services. Nevertheless, there was a waiver of rent exemption between the plaintiff and the defendant in one of the points of the lease agreement, which only stipulates as an exception the gross negligence in causing non-use by the landlord or a significant and demonstrable disadvantage for the tenant. The plaintiff demanded payment of the rent for the periods of lockdown in the amount of approximately EUR 13,003 and filed a request for eviction.

The lower courts only ordered the defendant to pay the rent for an undisputed month outside the lockdowns and dismissed the eviction request. The OGH confirmed:

If the use of a property is not possible due to "extraordinary circumstances", e.g. epidemics, the tenant's obligation to pay the rent ceases according to Section 1104 of the Austrian Civil Code (Allgemeines Bürgerliches Gesetzbuch, ABGB). The unusability depends on the fulfilment of the contractual business purpose. The fact that it was not possible for the defendant's customers to visit the nail salon due to official bans on entering the premises meant that the business purpose could not be fulfilled. According to the OGH, it is also irrelevant for the purpose of use whether the officially closed rental property is located in a shopping centre.

In principle, the OGH confirmed that Sec. 1104 ABGB is dispositive law and can thus be waived by contract. The OGH agreed with the interpretations of the waiver by the lower courts and ruled that the unusability of the existing property cannot be attributed to the general business risk and thus cannot be a burden for the defendant, because in this case there is an exception regarding the contractual waiver and therefore the rent does not have to be paid.

3 Ob 184/21m (25.11.2021)