Newsletter Tenancy and Housing Law – OGH Case Law Update March 2026

Litigation

3 Ob 188/25f – Requirements for the Valid Termination of a Lease

The defendant tenant sent the property management company and the long-standing legal representative of the plaintiff landlord a simple email with the subject line “Termination,” to which a PDF document was attached—a letter addressed to the property management company in which the defendant declared the termination of the lease. The defendant’s name appeared at the end of the letter in computer-generated text, but the letter was neither handwritten nor signed with a qualified electronic signature. Therefore, when the declaration of intent (notice of termination) was made, the written form required by law in the sense discussed above was not complied with. Consequently, the defendant had not validly terminated the lease.

5 Ob 176/25 ff – Repairs to the common property generally fall under the concept of maintenance under the Condominium Act, regardless of the amount of the costs

Pursuant to Section 28(1)(1) of the Condominium Act (WEG), the maintenance of the common areas of the property, including structural alterations that do not exceed the purpose of maintenance, is part of the ordinary administration of a condominium. However, the so-called “dynamic” concept of maintenance applies here, according to which even necessary and economically justified renovation work to maintain existing facilities still falls under maintenance, even if it involves the initial restoration of a defect-free condition, results in a complete renovation, and/or involves changes that are to be regarded as “improvements” compared to the previous condition. According to the established case law of the specialized senate, a prerequisite for classification as maintenance work is a need for repair, susceptibility to damage, or functional limitation (5 Ob 244/21z [para. 45]; 5 Ob 23/15s [para. 1]; 5 Ob 5/17x [para. 1]; 5 Ob 56/15v [para. 5.2]).

Work intended to remedy structural defects that endanger the safety of persons or property must, as priority work, generally be carried out within the scope of § 28(1)(1) of the Condominium Act (WEG), regardless of the associated costs. Only if the measure can no longer be classified as a maintenance measure—because the costs of the work are economically completely unreasonable in relation to the value of the entire property—would there no longer be an obligation to maintain (see RS0121905).

In principle, the distinction between ordinary and extraordinary management must be based on economic considerations (RS0041383). However, the necessity of repairing serious damage to the building relativizes the cost factor; repairs to the common property generally fall under the concept of maintenance under condominium law regardless of the amount of the costs (5 Ob 26/07w [Restoration of a part of the building at risk of collapse – measure of ordinary administration]).

In this case, there were structural defects endangering the building’s integrity. Renovation costs of EUR 530,000.00 were deemed economically justifiable in this case for a property with 35 condominium units. When assessing which costs exceed the scope of ordinary administration, no particularly strict standard should be applied (RS0083096 [T2]; 5 Ob 256/07v [para. 4]).

7 Ob 141/25y Right of Assignment or Right of Subletting?

The lease agreement at issue provides: “The tenant is granted an indefinite right of subletting. A condition for the transfer of the leasehold rights is prior written notification of the new subtenant to the landlord. The landlord may object to the transfer on grounds of creditworthiness or reputation.”

If the landlord grants the tenant the right in the lease agreement to transfer all rights and obligations arising from the tenancy to a third party by mere declaration—whether without restriction (see 1 Ob 125/99k) or limited to a specific group of persons (see 6 Ob 258/99f) or subject to a justified right of refusal by the landlord (see 1 Ob 125/99k)—with the effect that the third party becomes the tenant in their place without requiring a declaration (consent) from the landlord—a right of assignment exists (RS0105786; RS0032700; RS0032747). According to case law, this is to be understood as prior consent to the assumption of the contract (RS0032700; RS0032747 [T1]; 1 Ob 125/99k; 5 Ob 152/14k; 3 Ob 7/25p). This therefore concerns the tenant’s right not only to propose a new tenant but also, by mere declaration, to transfer all rights and obligations under the lease agreement to that new tenant (RS0105786). In this case, the new tenant steps into the existing lease agreement. According to established case law, when exercising a contractually agreed (unrestricted) right of assignment, the new tenant only steps into the lease agreement once the landlord has been notified of the assignment of the tenancy rights (RS0032747; RS0032700 [T7]; 5 Ob 250/09i; 3 Ob 247/15t with further references). The previous tenant (as the party entitled to sublease) must therefore exercise the right of sublease by submitting the required declaration of transfer to the landlord (3 Ob 7/25p with further references) . The legal consequence of the effective exercise of the contractual right of assignment is that the new tenant succeeds the previous tenant in the lease agreement without the need to conclude a new lease agreement; the succeeding tenant may immediately sue for performance of the contract (RS0032700; RS0032747; 1 Ob 125/99k; 5 Ob 152/14k; 3 Ob 104/15p). Even if the tenant’s right to select a subtenant is restricted by the landlord’s ability to refuse the subtenant’s entry if there are objectively justified concerns regarding that person as a tenant—i.e., a limited right of subletting has been agreed upon—tenancy law, according to case law (RS0105786 [T1])—as with an unrestricted right of assignment—by a mere declaration from the current tenant (1 Ob 125/99k; 8 Ob 71/17z; 5 Ob 161/22w). In this case, the landlord must declare within a reasonable period after being notified of the intended subtenant whether he consents to the transfer of the lease or not; if there is a dispute as to whether the refusal was justified, the court must decide (4 Ob 548/90).

Unlike a (unrestricted or restricted) right of assignment, a right of presentation constitutes a preliminary agreement within the meaning of § 936 of the Austrian Civil Code (ABGB) in favor of third parties, which only contains the landlord’s obligation to the tenant to grant, under certain conditions, consent for a third party (in place of the tenant) into the lease or to conclude a new contract with a suitable third party proposed by the tenant, with the same or certain other terms (RS0032739; RS0032804). In this case, the named subtenant is not entitled to seek a declaration of his tenancy rights because the tenancy rights have not yet been effectively transferred due to the landlord’s lack of consent. However, he is entitled to sue the landlord to compel him to grant consent to the assignment of the tenancy rights from the previous tenant to him (1 Ob 125/99k).

In this case, no right of presentation was granted, but rather a (limited) right of assignment.

Non-contentious Proceedings

5 Ob 64/25k – An agreement to index-link the lease payment within the scope of the Allotment Garden Act is generally permissible

Indexation based on the CPI is justified by the landlord’s legitimate need to adjust the rent—particularly in the case of longer contract terms—to account for actual inflation and thereby maintain the equivalence ratio (2 Ob 36/23t para. 9; 1 Ob 64/24d para. 8; 10 Ob 54/24z para. 44). Changes in the value of money lead to a change in the original subjective equivalence of the performances and to a divergence in their value ratio (RS0132652 [T4]; 1 Ob 64/24d para. 10; 10 Ob 54/24z para. 44) .

Value protection clauses do not in themselves violate the law or public policy and are inadmissible only to the extent that they are expressly prohibited (for an overview of statutory prohibitions that existed in the past but have since been repealed, see Ertl in Fenyves/Kerschner/Vonkilch, Klang3 [2013] § 985 margin note 76 et seq.; Liebel/Perner in Schwimann/Kodek, ABGB Praxiskommentar5 [2021] § 985 ABGB margin note 17). They are therefore generally permissible (RS0016806; 6 Ob 226/18f, point 1.1.; Aichberger-Beig in Kletečka/Schauer, ABGB-ON1.04 § 985 margin note 5 et seq. [as of Dec. 15, 2023, rdb.at]; Bollenberger/P. Bydlinski in KBB6 [2023] § 985 margin note 3; Ertl in Fenyves/Kerschner/Vonkilch, Klang3 [2013] § 985 margin note 66 et seq.; Liebel/Perner in Schwimann/Kodek, ABGB Praxiskommentar5 [2021] § 985 ABGB margin note 16).<br>The Allotment Garden Act (BGBl 1959/6, as amended by BGBl I 2001/98) does not contain a statutory prohibition on indexing the leasehold rent, nor does it expressly regulate such indexing.

The MRG itself already presupposes the possibility of rent indexation (in §16 MRG) (see Stabentheiner in Geko Wohnrecht I2 [2025] § 16 MRG margin note 121). The fact that the legislature presumes the agreement on rent indexation to be permissible precisely within the full scope of application of the MRG—which is particularly oriented toward tenant protection—by creating a special provision for reviewing the validity of a rent increase made in application of such a provision, suggests that rent indexation agreements are generally valid (see Scharmer, On the Admissibility of Value Protection Agreements (Index Clauses) in Consumer Lease Agreements—General and Specific Considerations in Light of the “Landmark Decisions” OGH 2 Ob 63/23 and 8 Ob 37/23h, wobl 2023, 291 [292 f]; Vonkilch, Commentary on the Decision in 6 Ob 226/18 et seq., wobl 2020, 300 [301 f]).

However, an allotment gardener is in a situation that warrants less protection than a tenant who rents an apartment to meet his or her housing needs (Szalkay-Totschnig/Weixelbraun-Mohr in Geko Wohnrecht I² § 1 Allotment Garden Act, margin note 13). At the time the Allotment Garden Act was enacted, the primary purpose of allotment gardening was to supply the population with food. This purpose is of little significance today. The focus is now on recreation and leisure activities (3 Ob 2090/96s; 8 Ob 240/01d; see Szalkay-Totschnig/Weixelbraun-Mohr in Geko Wohnrecht I² Preamble to § 1 of the Allotment Garden Act, margin note 4; § 1 of the Allotment Garden Act, margin note 2; Hinghofer-Szalkay, Bauen im Kleingarten, wobl 2005, 325 [331 f]). Furthermore, the long term of the contract—lease agreements under the Allotment Garden Act may only be concluded for an indefinite term or for a fixed term of at least 10 years (see § 2 of the Allotment Garden Act)—also justifies an adjustment of the rent to account for actual inflation.

5 Ob 78/25 v – Whether a value preservation agreement violates § 6(1)(5) and (2)(4) of the Consumer Protection Act (KSchG) or § 879(3) of the Austrian Civil Code (ABGB) is not subject to the jurisdiction of the non-contentious court in proceedings under § 37(1)(8) of the Housing Act (MRG) in conjunction with § 16(8) and (9) of the MRG

The subject matter of proceedings under § 37(1)(8) MRG in conjunction with § 16(8) and (9) MRG is not the question of the (in)validity of a value protection agreement per se under general civil law criteria, but rather the admissibility of the resulting increase in the base rent under the mandatory provisions of tenancy law. In this context, the judge in non-contentious proceedings must, as a preliminary matter, examine whether there is a sufficiently specific value protection agreement that is, in principle, permissible under tenancy law. If this is the case, the proceedings under § 37(1)(8) MRG must determine whether, for the rent payment date(s) on which the request(s) for an increase took effect, the increased base rent complies with the mandatory statutory provisions governing rent determination.

An agreement—such as the one at issue here—to index the base rent by reference to the indexation provision of the MRG (Section 16(6) MRG), which, due to the reference contained in Section 15a(3) MRG, also applies to Category A rents, is —just as an agreement to index-link the reference rent by reference to § 5 of the Reference Rent Act (RichtWG), which is also linked to the consumer price index (see 5 Ob 166/24h; 5 Ob 110/24y, each with further references)—sufficiently specific. Whether, beyond that, its formation or content complies with general civil law provisions in individual cases is not to be clarified in proceedings under § 37(1)(8) MRG.

The deadline specified in § 16(8), second sentence, of the MRG is a preclusive deadline, and failure to meet it results in the loss of rights (see RS0034591; RS0020748), which must be noted ex officio upon becoming known (RS0112180 [T2]). The expiration of the unused deadline ultimately results in the rectification of partially void rent agreements that exceed the permitted interest rate (RS0083814 [T2]). Pursuant to the statutory reference in § 16(9) MRG, this also applies to any impermissible increase in the base rent resulting from the application of a value adjustment agreement, such that any partial invalidity caused by the rent increase is remedied by the expiration of the three-year preclusive period.

5 Ob 136/25 y – On the Legal Consequences of the Lapse of an Agreed Allocation Formula Under the WEG

In the event of the lapse of an allegedly agreed-upon alternative allocation formula and in the absence of a court-ordered alternative allocation formula within the meaning of § 32(5) WEG 2002, property expenses within the meaning of § 32(1) WEG must be allocated according to the statutory allocation formula. As a result, the condominium owner must contribute to these expenses in proportion to their co-ownership shares, and a “complete omission” of these items from the operating cost statement provided to them is not permissible.