OGH: COVID-19 Rent Reduction for Swingers Clubs

Apr 26, 2024 Benn-Ibler Rechtsanwälte

The Austrian Supreme Court (Oberster Gerichtshof, hereinafter OGH) has clarified that, due to the obligation to wear FFP-2 masks, it was not possible to use a property in accordance with its agreed contractual purpose of operating a swingers club and that, therefore, no rent was to be paid for these periods.

The landlord is suing the tenant, who runs a swingers club in the landlord’s business premises, for the back payment of underpaid rent for various periods between March 2020 and March 2022. The premises are operated as a swingers club, although the lease describes the operations as a ‘sauna business providing catering, a solarium, massages, and a fitness studio’. The underlying business purpose of the lease is to provide premises for engaging in interpersonal (sexual) contact.

The plaintiff argued that although there was a right to rent exemption for restaurants during the period of the entry ban, there was no right to rent exemption for periods when there was no entry ban, but when only distancing rules and the obligation to wear a mask were in force.

On this occasion, the OGH clarified its case law on Section 1104 of the Austrian Civil Code (Allgemeines Bürgerliches Gesetzbuch, hereinafter ABGB) and ruled in favour of the defendant:

According to Section 1104 of the ABGB, there is no obligation to pay rent if a property cannot be used or utilised due to extraordinary circumstances, in particular, due to epidemics.

The question of unusability is to be judged in accordance with the purpose of a contract.

So far, not only entry bans but also less serious measures such as access restrictions, minimum distancing rules, or limits on the number of customers have been regarded as official measures resulting in a loss of turnover as ‘specific consequences of an objective restriction of the contractually agreed use of a property’. The obligation to wear FFP 2 masks has not been considered sufficient in the context of clothing shops, as the potential discomfort of customers due to the wearing of masks is considered to be an individual matter.

The case law on clothing stores cannot apply to swingers clubs, according to the OGH. This is because, from a realistic point of view, the use of the property in its basic function of initiating and enabling informal (i.e., private and non-commercial) sexual encounters between strangers would not have been possible, even without distancing requirements but an obligation to wear FFP2 masks.

OGH 4 Ob 225/23a (19 March 2024)