OGH: Section 27(3) Tenancy Law and Suspension of Limitations

May 12, 2023 Benn-Ibler Rechtsanwälte

The Austrian Supreme Court (Oberster Gerichtshof, hereinafter OGH) has clarified that Section 27(3) of the Austrian Tenancy Act (Mietrechtsgesetz, hereinafter MRG) normalises suspension of the statute of limitations.

In the case at hand, the plaintiff was the tenant and the defendant was the landlord of a business premises. At the plaintiff's request, rent review proceedings under Section 16 MRG were initiated where it was found that he had been charged too much rent. The landlady refunded him the rent overpayment but did not pay him any interest.

The plaintiff now sought 4 % pa interest at the statutory rate, claiming that in accordance with Section 27 (3) last sentence of the MRG, his claim for interest was suspended during the rent review proceedings and therefore not yet time-barred.

The defendant objected that Section 27 (3) MRG normalises tolling and that the plaintiff’s claim for interest payment had not been brought within a reasonable period of time. His interest claims were therefore time-barred.

The lower instances upheld the claim, as did the OGH.

Pursuant to Section 27 (3) last sentence MRG, the statute of limitations for repayment claims are suspended as long as legal proceedings on the proper amount of rent are pending before a court.

Suspension prevents the commencement or interrupts continuation of the statute of limitations. After the reason for suspension ends, the entire time period or the remainder of time sets on. Tolling, on the other hand, allows the time period to run even while the reason for tolling exists, but the time period ends when this reason ceases to exist or on the expiry of a period thereafter as determined by law.

The protective purpose of Section 27 (3) MRG speaks in favour of suspension. Tenants are supposed to be able to ascertain the allowable rent in a cost-effective and efficient way by means of rent review proceedings without the risk of (almost) all the rent paid up until that point in time becoming time-barred within a short period of time.

Moreover, the wording of section 27 MRG focuses on the duration of the pending proceedings and in this respect contains a similar wording as do other factors considered to be reasons for suspension of the statute of limitations.

OGH 4 Ob 28/23f (28.03.2023)