OGH: Ineffective Clause in Rental Contracts

May 17, 2024 Benn-Ibler Rechtsanwälte

The Austrian Supreme Court (Oberster Gerichtshof, hereinafter OGH) has declared the following clause in tenancy agreements invalid:

‘Any electrical appliances (electric cooker, cooker hood, dishwasher, refrigerator/freezer) must be returned to the landlord in a working condition when the tenancy ends. Any repairs will be at the expense of the tenant. (...) The tenant acknowledges that any blinds in the property shall be the responsibility of the tenant for maintenance and repair. The condition and functionality of the blinds is not the responsibility of the landlord.’

The exclusion of liability and the passing on of maintenance obligations to the tenant constitute a breach of Section 9(1) of the Austrian Consumer Protection Act (Konsumenschutzgesetz, KSchG). Warranty rights may not be excluded vis-à-vis consumers. Furthermore, the clause is also grossly unfair under Section 879(2) of the Austrian Civil Code (Allgemeines bürgerliches Gesetzbuch, hereinafter ABGB). However, a partial transfer of maintenance obligations to the tenant would be objectively justified if a certain amount is offset against the rent.

‘In respect of any investments made by the tenant, the tenant waives the right to claim compensation pursuant to Section 1097 in conjunction with Section 1037 of the ABGB. Therefore, unless otherwise agreed between the parties in individual cases, the tenant shall not be entitled to compensation for useful expenditure for the predominant benefit of the landlord.’

The OGH did not find this clause problematic. The tenant’s waiver of clearly defined claims, in this case claims for compensation for useful expenses, is permissible. After all, it is in the landlords’ interest to protect themselves from unforeseeable payment obligations, and tenants can decide whether or not to make the investments at their own expense. However, the OGH emphasised that the costs of restoring the apartment to its contractual condition are in any case compensable under sec 1097 in conjunction with Section 1036 of the ABGB.

OGH 8 Ob 6/24a (22 March 2024)