OGH Defines ‘Significant Remodelling Measures’

Jul 15, 2022 Benn-Ibler Rechtsanwälte GmbH

When a consumer enters into contracts with different businesses for ‘significant remodelling measures’, each agreement is to be assessed separately. Individual contracts do not constitute a ‘substantial remodelling measure’ within the meaning of Section 1 para. (2) no. (7) of the Austrian Remote and External Business Act, (FAGG).

The plaintiff holds a property with a house as co-owner. He commissioned the defendant with the removal of the old roof and the construction of a new one. The construction of a new residential unit was not included in the contract. The plaintiff ultimately signed a modified contract, which also included the demolition of the roof truss. The defendant did not inform the plaintiff about the rights of contract withdrawal according to the FAGG.

The plaintiff now seeks repayment of EUR 30,000, withdrawing from the contract in accordance with Sec. 11 of the FAGG. The defendant has retorted that the FAGG does not apply in this case.

The Austrian Supreme Court (OGH) found that this case did not fall under the FAGG. Instead, it held as follows:

If there is a significant work of remodelling pursuant to Sec. 1 para. (2) no. (7) FAGG, the FAGG shall not be applicable. According to recital 26 of Directive 2011/82/EU (Consumer Rights Directive), such a measure is deemed to exist if the remodeling work is equivalent to the construction of a new building. According to Austrian law, a rigorous standard shall be applied. Materiality is given (the Supreme Court likens Sec. 1 para. (2) no. (7) FAGG to Sec. 26d Consumer Protection Act, Konsumentenschutzgesetz, KSchG), if the remodelling work is equivalent to the construction of a new object. This does not include contracts for overhauling or renovation, installation of a heating system or replacement of windows and doors. According to the Supreme Court, the erection of a new roof is comparable to constructing an annex or add-on. Even if the contract volume in question is large, it does not reach the required complexity or scope in order to be considered equivalent to the construction of a new building. According to the Supreme Court, only this interpretation provides legal certainty, as in case of a different interpretation, contractors would no longer be able to unequivocally identify their obligation to provide information according to Sec. 4 of the FAGG.

OGH 10 Ob 35/21a (29.03.2022)