The Supreme Court (OGH) has clarified operating cost regulations and value guarantee clauses in rental agreements with its decision 10 Ob 54/24z. In the case in question, tenants of a condominium had demanded reimbursement of operating costs. They argued that the relevant clause in the rental agreement was unclear and therefore invalid. While the lower courts had dismissed the claim, the OGH ruled in favour of the tenants. They will no longer have to pay operating costs and any payments already made must be refunded. At the same time, the highest court confirmed that a value guarantee clause that adjusts the rent to the consumer price index (CPI) is legally permissible.

The decision is significant for landlords and tenants. Press reports celebrated the decision as a "victory for tenants", although this interpretation is probably too superficial, as the decision provides greater clarity overall regarding the requirements of rental agreements, and the Supreme Court's ruling on the value guarantee clause is also positive for landlords:

 1. Landlords should prevent their rental agreements from being classified as "standard form contracts" or "form contracts."

The plaintiffs (consumers) based the invalidity of the contractual provisions, among other things, on a violation of the transparency requirement under Section 6(3) of the Austrian Consumer Protection Act (KSchG). According to this provision, a contractual provision contained in general terms and conditions or contract forms is invalid if it is unclear or incomprehensible.

It is therefore important for landlords to prevent the rental agreement from being classified as a "standard form contract". This can be achieved, for example, by sending the rental agreement to the tenant for review before signing and asking the tenant to submit any proposed changes or additions. It is also important that such proposed amendments are actually negotiated in good faith and, if necessary (provided that the relevant provision is not of such great importance to the landlord), that the tenant's wishes are (at least partially) accommodated or that the proposed amendments are incorporated into the rental agreement. If the landlord's serious willingness to amend the contractual provisions is well documented, there is a significantly higher chance that the rental agreement will not be classified as a standard form contract in the event of a dispute. This would be positive for the landlord in that the provisions of Section 6 (3) KSchG and Section 879 (3) ABGB would not apply and the court would not even examine the potential invalidity of any grossly disadvantageous and non-transparent clauses in the rental agreement.

 2. Avoiding unclear operating cost clauses

The Supreme Court declared the provision on operating costs to be invalid because it was not sufficiently specific (the word "in particular" preceded the list of operating costs). The costs passed on were therefore only listed as examples and the clause was unclear because the tenant could not assess what was meant by management costs and what costs he would have to bear.

Practical tip: Landlords should therefore ensure that the list of operating costs in the rental agreement is formulated in a conclusive manner and does not contain any vague terms such as "in particular", "all operating costs" or "special expenses".

 3. Value guarantee clause in rental agreements generally permissible

With regard to the value guarantee clause in the rental agreement, the Supreme Court has made two clarifications that are important for landlords:

The Supreme Court has confirmed that it considers agreements on value guarantees based on the CPI in rental agreements to be permissible in principle, and that such agreements do not in themselves contradict the requirement of objectivity.

Practical tip: It is therefore important for landlords to ensure that the value guarantee clause is always linked to the CPI (and not to any other undefined index). We currently recommend agreeing on the index value announced for the third month after the start of the contract as the basis.

However, according to the Supreme Court, it is not transparent to agree on an index figure from the distant past, such as the index figure used as the basis for the last recalculation of the reference values, if only the rent currently payable is specified. It remains unclear whether it is permissible to agree on the index figure that is the most recently published index figure on the date the contract is concluded.

 4. Liability in the event of a change of ownership of the rented property

In the case in question, the Supreme Court also had to decide who was liable for the tenant's claims for reimbursement if the property had already been sold to a new owner. In this specific case, the new owner is also liable for the tenant's claims for reimbursement relating to payments made by the tenant to the previous owner prior to the acquisition of the property. The decisive factor was that, in the present case, the purchase agreement provided for the transfer of the lease agreement, including all associated rights and obligations, between the seller and the buyer. In the case of a contract transfer involving the transfer of all mutual rights and obligations, case law assumes that this entire transfer also includes claims for reimbursement based on payments made to the former party, which must be reversed due to the invalidity of the legal transaction.

This shows that buyers should always check carefully whether existing liabilities are being taken over when purchasing rented properties. If the rented property is subject to the (full or partial) scope of the MRG, the buyer, as the legal successor to the landlord, is already bound by the validly concluded main rental agreement in accordance with Section 2 MRG.

Practical tip: The purchase agreement should therefore explicitly state that all claims and entitlements (including claims for reimbursement, as in this case) relating to the period prior to the purchase are not transferred, but that the agreed transfer of rights and obligations only applies to claims and entitlements arising from the acquisition of the property.