OGH: Major Ruling on Rental Agreement Clauses (Part 11)

Sept 27, 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 eleventh and final part of this ruling.

Clause 35:

‘In the event of excessive wear and tear to the walls, ceilings, and floors in the rented property, the tenant shall be obliged to professionally repaint the rented property with white emulsion paint and/or to restore the surface coverings to their proper condition. This obligation also applies in the event that the tenant has painted the leased property in a different colour or put in a different floorcovering than there was in the rented property at the time of the initial takeover.’

Clause 35 gives the landlord an advantage at the end of the tenancy because the property is to be returned in a better condition than in which the tenant took it over. Sentence 1 requires the tenant to return the property in a specific condition, while sentence 2 of the clause does not refer to excessive wear and tear. Irrespective of fault, the tenant would have to restore the floor coverings to their original condition at the end of the lease. This provision lacks objective justification. Accordingly, the OGH held that this clause constituted an unfair disadvantage within the meaning of Section 879(3) of the Austrian Civil Code (Allgemeines bürgerliches Gesetzbuch, ABGB).

Clause 43:

‘The tenant further acknowledges that only authorised employees of the landlord, or the landlord’s representative, are entitled to grant the tenant additional rights or to waive obligations.’

A restriction of the power of attorney is only effective vis-à-vis the consumer if the consumer is aware of this, according to Section 10(1) of the Austrian Consumer Protection Act (Konsumentenschutzgesetz, KSchG). This clause therefore wrongly prevents tenants from relying on declarations by third parties within the scope of an apparent power of attorney.

Clause 44:

‘If a contractual provision cannot be invoked by one of the parties due to applicable legal provisions, the same shall apply to the other party.’

Clause 44 places the tenant at a gross disadvantage as it does not redress the balance between the parties. The relative nullity of a clause is intended to give the party unlawfully disadvantaged by it the choice of accepting or not accepting an invalid provision. The clause at issue deprives the tenant of this option without any objective justification.

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