OGH: Keep No Secondary Residence Use out of Land Register

Oct 7, 2022 Benn-Ibler Rechtsanwälte GmbH

Tolerations or prohibitions to which the owner of a servient property is subject must be related to property utilisation and not simply to the owner’s economic activities. Therefore, servitudes that only concern the obligatory use of a property may not be incorporated into the land register.

In the present case, the Austrian Supreme Court (Oberster Gerichtshof, OGH) dealt with the question of whether a servitude agreed to in order to safeguard local zoning objectives can be incorporated into the land register.

In the agreement in question, the land owner and a business company agreed to use a certain property only for staff and operator housing purposes as well as a restaurant. Use of the property for vacation housing was explicitly prohibited. The respective servient land owner is obliged vis-à-vis the benefitting local municipality not to use the property for vacation residences as specified in Section 13 of the Tyrolean Regional Planning Act 2016 (Tiroler Raumordnungsgesetz, TROG). This legal obligation was backed up by contractual penalties.

The court of first instance as well as the court of appeal did not uphold the entering of such a servitude into the land register. Although the usefulness criterion of a servitude in benefit of municipalities is not a strict one, sufferance or prohibitions are not necessarily limited to the use of the property itself, as in the present case.

The Austrian Supreme Court ruled against the appeal as well:

If the entitlement holder is not the actual owner of the property but another natural or legal person is, this is referred to as an irregular servitude pursuant to Section 479 of the Austrian Civil Code (Allgemeines Bürgerliches Gesetzbuch, ABGB). Such a servitude is to be treated as a praedial servitude. The benefits to the beneficiary are derived irrespective of property ownership. However, one must not deduce from this that every business purpose in the form of an obligation to cease and desist justifies the creation of such a servitude. In previous case law it was already determined that the prohibition of leasing apartments and certain other commercial activities shall not require the entry of such prohibitions in the land register. According to the Austrian Supreme Court, this also applies to a person’s obligation not to use a property for recreational residences, from which a local municipality benefits.

OGH 5 Ob 3/22k (14 July 2022)