OGH Rules on Value Protection Clause in Residential Leases

May 17, 2024 Benn-Ibler Rechtsanwälte

The Austrian Supreme Court (Oberster Gerichtshof, hereinafter OGH) has ruled that the following value protection clause is invalid:

‘Value is currently safeguarded in accordance with the Consumer Price Index 2015 (CPI 2015), which is published monthly by the Austrian Federal Statistical Office. The most recently published index value at the time of contract conclusion is the basis for this value protection. No account is taken of index fluctuations of up to and including 3%. This margin must be recalculated to one decimal place each time it is exceeded or undercut, whereby the first index figure outside the respective margin must always be the basis for the recalculation of both the rent and the new margin.’

Section 6(2)(4) of the Austrian Consumer Protection Act (Konsumentenschutzgesetz) is intended to prevent landlords from increasing the contractually agreed lease after a short period of time. Lessees have a legitimate interest in ensuring that the agreed lease remains binding at least for the next few months. Furthermore, the OGH held that provisions regulating pricing in general terms need to be reviewed as to their content.

OGH 8 Ob 6/24a (22 March 2024)