OGH: Major Ruling on Rental Agreement Clauses (Part 10)

Sept 20, 2024 Benn-Ibler Rechtsanwälte

Beginning on 19 July this year, in our newsletter we have been publishing excerpts from an extensive decision by the Austrian Supreme Court (Oberster Gerichtshof, hereinafter OGH) fraught with practical implications. Today, we are featuring the tenth part of this ruling, this time dealing with tenant compensation claims.

Clause 30:

‘In respect of the alterations and investments made by the tenant, the tenant waives any claim for compensation against the landlord. This waiver shall not apply to necessary expenses incurred by the tenant within the scope of Section 1036 of the Austrian Civil Code (Allgemeines bürgerliches Gesetzbuch, hereinafter ABGB), unless the tenant is subject to a maintenance obligation which deviates from Section 1096 of the ABGB.’

Clause 34:

‘If the fixtures and fittings are necessary for the tenant within the scope of Section 1036 of the ABGB, and if the tenant makes no provision for their maintenance in derogation of Section 1096 of the ABGB, the fixtures and fittings may remain in the leased property and the tenant shall be entitled to reasonable compensation for them within the scope of Section 1097 of the ABGB.’

The OGH ruled that these clauses are in violation of Section 879(3) of the ABGB. In the case of tenancy agreements within the partial scope of the Austrian Tenancy Act (Mietrechtsgesetz, MRG), the tenant is an ‘unauthorised agent’ according to Section 1097 of the ABGB, if the tenant has caused an expense incumbent on the landlord (Section 1036 of the ABGB) or a useful expense (Section 1037 of the ABGB) within the property after reporting the damage. In principle, it is permissible to waive the reimbursement of expenses in advance, but with regard to necessary expenses only to the extent that the contract parties had agreed on a maintenance provision that deviates from Section 1096 of the ABGB.

Clause 31:

‘The tenant shall only be liable for compensation for pecuniary loss due to a breach of the contract if the tenant or a person for whom the tenant is responsible has caused the loss with intent or by gross negligence.’

Clause 37:

'The tenant shall not be entitled to compensation for pecuniary loss arising from interruptions in the supply of electricity, water, gas, sewerage, or other facilities, unless the landlord is guilty of gross negligence.’

These two clauses were also classified as grossly unfair in accordance with Section 879(3) of the ABGB. Declarations of exclusion as an advance waiver of claims for damages are not permissible, at least not if they were made in a general manner. Neither can the right to a rent reduction and exemption under Section 1096(1) sentence 2 of the ABGB be a reason for a waiver. These rules do not provide compensation for the loss of a claim for damages, but instead offer compensation for a reduced or non-existent possibility of use.

OGH 9 Ob 4/23p (24 January 2024)