OGH: Written form of verbal power of attorney in the tenancy agreement

Jun 3, 2022 Benn-Ibler Rechtsanwälte

A written reference to acting (also) in another's name is not required either for the effectiveness of the proxy or for the fulfilment of the written form requirement for temporary tenancy agreements.

A tenancy agreement limited to 3 years was concluded between a tenant and a married couple as co-owners. The first respondent, the wife of the then deceased, agreed to the conclusion of the contract. Later, the applicant concluded a supplementary agreement with the property management that the tenancy should continue for a further 5 years on the full basis of the tenancy agreement. The flat was classified as category D, as there was no internal toilet. The husband of the first respondent had this installed without any agreement on a change in the rent with the tenant.

In the present case, the applicant had the rent of his rented property assessed. The respondents sought dismissal on the grounds that the extension of the term had not been signed by both landlords and that an assessment of the rent was therefore precluded.

The Court of Appeal did not uphold the respondents, as despite the extension of the contract the "original category" remained decisive.

The Austrian Supreme Court (Oberster Gerichtshof, OGH) stated:

Pursuant to Section 16 para 8 of the Tenancy Act (Mietrechtsgesetz, MRG), a claim for exceeding the maximum amount of rent in the case of fixed-term tenancy agreements is only precluded if six months of the combined fixed-term period have expired. The requirement of written form is decisive for the limitation of the term. It is sufficient if both the agreement on a fixed term and the contracting parties can be reliably inferred from the contractual document. For a representation in such a matter, the verbal granting of a power of attorney is sufficient. According to the respondent, a written addendum would have been needed for this. The OGH confirmed that if the representative does not expressly act on behalf of another person, the representative's actions are to be measured on the basis of theory of trust, i.e. how an honest, reasonable recipient of the information could understand it. This was the case for the OGH due to the indication of the contracting parties in the contract document. Also, a silent acceptance of a new rent agreement by further rent payments according to Sec. 864 of the Austrian General Civil Code (Allgemeines Bürgerliches Gesetzbuch) was not to be assumed.

OGH 5 Ob 150/21a (21.03.2022)