OGH: If entry is prohibited, no rent has to be paid

Dec 24, 2021 Benn-Ibler Rechtsanwälte

The Austrian Supreme Court (Oberster Gerichtshof, OGH) ruled for the first time that the rent exemption under Section 1104 of the Austrian General Civil Code (Allgemeines Bürgerliches Gesetzbuch, ABGB) is also applicable if business premises were subject to an entry ban due to lockdowns.

In the original case, the plaintiff operated a tanning salon in a business premises. The lease agreement was subject to the Tenancy Act (Mietrechtsgesetz, MRG). After the announcement of the lockdown measures in March 2020, she switched off all heating and electricity as well as all equipment from mid-March and took her computer with her. Apart from the furnishings, no other items were stored in the business premises. For April 2020, she paid neither rent nor operating costs.

Thereupon, an execution for eviction was granted, which the plaintiff opposed with the lawsuit discussed here. On the basis of Sec. 1104 ABGB, she was exempt from paying rent and was therefore not in arrears with the rent. The landlord was of the opinion that no complete rent exemption had occurred. Rather, she would have had to pay the rent with conditional payments.

According to the OGH, the tenant was in the right:

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

The fact that COVID-19 is an epidemic in the sense of Sec. 1104 ABGB is beyond question for the OGH. Due to the closure regulation, the plaintiff's tanning salon was subject to an unrestricted ban on entry. It could therefore "not be used or utilized at all". According to the OGH, this criterion is also met if - as is the case here - it rises directly from a governmental order (ban on entering) that the property cannot be used as contractually agreed.

The OGH also rejected a partial use claim by the landlord, because the mere "storage" of the furnishings (sunbeds, etc.) does not constitute a "use" for the contractually agreed purpose.

OGH 3 Ob 78/21y (21.10.2021)