Statute of Limitations for Construction-Related Damage

Sept 12, 2025 Benn-Ibler Rechtsanwälte

In the case at hand, the Austrian Supreme Court (Oberster Gerichtshof, hereinafter OGH) recently addressed the issue of whether claims for damages arising from water damage to a palais property, resulting from adjacent construction activities, were subject to statutory limitation.

The plaintiffs, both limited partnerships, alleged that the defendant property developer’s construction activities—including modifications to excavation pit safety measures and drainage systems—resulted in persistent water-related damages. Consequently, they pursued compensation amounting to approximately EUR 620,000 and requested a declaratory judgment establishing liability for any future damages.

 The court of first instance dismissed the action, stating that the claims were time-barred, as the limitation period under Section 1489 of the Austrian General Civil Code (Allgemeines bürgerliches Gesetzbuch, hereinafter ABGB) begins when the damage and the responsible party are identified, and the plaintiffs had been aware of the initial damage for several years. The court of appeal found that damages known by February 2021 are time-barred, but any damages discovered after that date are not. Consequently, the court issued a partial interim judgment.

The OGH has stated that for ongoing damage, such as from construction activities, each new occurrence of damage triggers a separate limitation period. Therefore, later incidents are not automatically governed by the limitation period of the first event. After 2020, changes were made to a bored pile-wall by the defendant, and it could not be objectively foreseen that related subsequent damage would occur.

However, the OGH expressed concerns regarding the methodology employed by the court of appeal, noting that a partial judgment is permissible only when the specific damages being addressed are clearly identified. The general reference to damages occurring ‘after February 2021’ was deemed insufficiently precise.

In order to resolve the statute of limitations issue through an interim judgment in accordance with Section 393a of the Austrian Code of Civil Procedure (Zivilprozessordnung, ZPO), it is necessary to present thorough arguments and substantive evidence that attribute each claimed damage to specific harmful events. The OGH has affirmed that a general reference by the appellate court to damages incurred after the specified date in February does not adequately identify which individual claims asserted by the plaintiffs are subject to consideration.

Owing to a lack of sufficient evidence, the OGH set aside the prior decisions and remanded the matter for retrial. The court of first instance is now required to ascertain the exact timing of the damage and when the plaintiffs had become aware of it.

OGH 1 Ob 57/25a (31 July 2025)