OGH: Major Ruling on Rental Agreement Clauses (Part 4)

Aug 9, 2024 Benn-Ibler Rechtsanwälte

The first part of a very extensive and practice-relevant clause decision of the Austrian Supreme Court (Oberster Gerichtshof, hereinafter OGH) was published in the USANCEN Newsletter of 19 July 2024. This week, USANCEN devotes its attention to the fourth part of the ruling.

Clauses no. 8 and 9:

‘The rent shall consist of [...] 1.2 a proportion of the building operating costs.

a) These costs for the operation of the building include [...]

· the pro rata real estate tax (Clause 8), and

· the pro rata costs of other public charges that are levied on the property' (Clause 9).

Section 1099 of the Austrian Civil Code (Allgemeines bürgerliches Gesetzbuch, hereinafter ABGB) stipulates that landlords shall bear ‘all costs and charges’ related to a rental agreement. However, the parties may agree on different provisions in the lease, as this is a matter of non-mandatory law. According to Section 879 (3) of the ABGB, the two clauses are not grossly unfair.

Clause 8 is also not unclear within the meaning of Section 6(3) of the Austrian Consumer Protection Act (Konsumentenschutzgesetz, KSchG), since landlords have no influence on the amount of the property tax. This is regulated by law. However, since tenants cannot see which other public charges they have to pay, Clause 9 is very non-transparent.

Clause no. 16:

‘The tenant shall be liable to the landlord ... for the necessary or reasonable costs of appropriate legal action by the authorities ...’.

The clause deviates from the legally defined rules for reimbursing the costs of ‘official’ legal proceedings without any factual justification and stipulates that the tenant must bear all the costs of legal proceedings, regardless of fault. The OGH considered this to be a violation of Section 879(3) of the ABGB.

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