OGH: Vacate Agreements in Advance are Unlawful

Apr 7, 2023 Benn-Ibler Rechtsanwälte GmbH

In the case at hand, the Austrian Supreme Court (Oberster Gerichtshof, hereinafter OGH) considered an open-ended tenancy and the parties' periodic court-enforceable arrangements requiring the tenant to vacate the premises (the Austrian legal term describing such an arrangement is Räumungsvergleich).

The plaintiff has been renting business premises from the defendant since 1992. The lease was concluded for an indefinite period of time and is subject to protection against termination according to Sections 29 of the Austrian Tenancy Act (Mietrechtsgesetz, hereinafter MRG). From 1997 onwards, the parties had concluded arrangements on vacating the premises, ‘for precautionary reasons’ (as demanded by the landlord), every 5 years. In October 2022, the defendant gave notice that he wished to terminate the lease whereupon the plaintiff's lawyer countered that no contractual adjustments had been made as a result of past vacating arrangements, and that the leased property therefore did not have to be vacated.

The lower courts upheld the ruling that the arrangement to vacate the premises was invalid. By concluding such arrangements, the indefinite tenancy agreement had not been converted into a fixed tenancy agreement.

The OGH ruled as follows:

The defendant was supported to the effect that a tenancy that falls under protection against termination under Sections 29 et. seqq. of the MRG can also be terminated by mutual agreement. An implied agreement to vacate could also result in this. In the case at hand, however, such an agreement did not exist. Here, vacating arrangements had been entered into without a corresponding inherent wish to terminate the lease agreement. The OGH perceived such a practice as the granting of a legally non-existent right to the landlord to alter a legal relationship. The defendant's referral to the legal opinion of Judge Kodek in his extraordinary appeal did not solve the problem, either. According to Judge Kodek, an unenforceable deadline cannot be circumvented by concluding a vacate arrangement before or at the conclusion of a lease relationship. During the lease, however, it can.

According to the OGH, the defendant failed to take into account that this opinion is not applicable to the special constellation of this case, where the landlord is provided with a unilateral right of termination in the case of an indefinite continuing obligation not compatible with the statutory protection against termination. The Supreme Court thus rejected the extraordinary appeal.

OGH 4 Ob 224/22b (31.01.2023)