Value Guarantee: Review of Basic Rent in Non-Contentious Proceedings

Jun 13, 2025 Benn-Ibler Rechtsanwälte

According to Austrian general civil law criteria, the validity of a value guarantee agreement is not subject to review in non-contentious proceedings under Section 37(1)(8) of the Austrian Tenancy Law Act (Mietrechtsgesetz, hereinafter MRG). As a preliminary question, the judge must first clarify whether a corresponding agreement exists as prerequisite for increasing the rent.

In the case at hand, a tenant had requested a review of their main rent.

The applicant had been the main tenant of an apartment from October 2008 until September 2021. The respondent was the landlord. The parties orgininally had a written rental agreement for a fixed term of five years, setting a monthly main rent of approximately EUR 650. In 2012, the tenancy agreement was extended by five years. In June 2018, the parties signed a new agreement for a fixed term of three years, setting a monthly rent of approximately EUR 770.

In an application to the local arbitration board, the applicant requested a review of the prescribed basic rents from October 2008 to September 2021.

The arbitration board found that the legally permissible basic rent had been exceeded for the period from November 2011 to September 2021. The respondent appealed against this decision in a timely manner.

The court found that the statutory maximum rent had been exceeded during this period and ordered the respondent to repay the excess amounts. The court of appeal also declared all increases in the basic rent based on the value guarantee agreement invalid.

Austrian Supreme Court (Oberster Gerichtshof, hereinafter OGH): The validity of a value guarantee clause is not reviewed in non-contentious proceedings

The OGH upheld the respondent’s appeal and reinstated the decision of the court of first instance.

Rent agreements are invalid insofar as the agreed main rent exceeds the maximum amount permitted under Section 16(1) to (7) of the MRG. Pursuant to Section 37(1)(8) of the MRG, the appropriateness of the agreed main rent must be decided in non-contentious proceedings. Other questions on which the amount of the main rent owed under the agreement depends (such as the validity of a value guarantee clause) must be clarified in contentious proceedings.

OGH 5 Ob 166/24h (2 April 2025)