OGH on Rent Increase for Maintenance Work

May 10, 2024 Benn-Ibler Rechtsanwälte

According to Section 3(2) no. 1 or no. 5 of the Austrian Tenancy Act (Mietrechtsgesetz, hereinafter MRG), insulating the roof may, in principle, constitute maintenance work. Accordingly, if there is a shortfall in coverage, an increase in principal rent can be demanded.

Due to planned renovations, the landlord applied to increase the main rent according to Sections 18 ff of the MRG. Insulating the roof was listed as maintenance work in his application. After completion and invoicing of the renovation work, the applicant would have been entitled to a subsidy of approx. EUR 30,000.

Both the court of first instance and the court of appeal rejected the applicant’s application. The Austrian Supreme Court (Oberster Gerichtshof, hereinafter OGH) upheld the lower courts’ decisions.

The precondition for an increase in the main rent is that there must be a shortfall in the coverage of costs. The anticipated costs must be in excess of the current and future rental income.

If such an imbalance exists, an increase in the main rent for the maintenance work listed in Section 3 (2) MRG can be requested in accordance with Section 18 MRG. If repair is no longer possible or economically justifiable, ‘maintenance’ can also include appropriate and economically feasible renovation work. Section 3 (2) No. 5 MRG also covers maintenance work that does not remedy a defect but leads to a reduction in energy consumption.

The OGH confirmed the decision of the court of appeal. As the roof was not defective and the insulation does not qualify as an energy-saving measure, the refurbishment does not fall under Section 3(2) MRG. Furthermore, the OGH emphasised that subsidies must be considered when calculating the coverage requirement, even if the subsidy has not yet been bindingly guaranteed. As a result, the application for an increase of the principal rent was rejected.

OGH 5 Ob 128/23v (12 March 2024)