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14 July 2006
Duty to Prevent Health Hazards
Compensation for Replacing Thermal Heaters
Duty to Notify Lessor of Defects
Second Chance When Failing to Evict
Changes to Condominium Act
After several years of debate, Parliament has passed an amendment to the Tenancy Act. The amendment makes significant changes in certain areas of tenancy law, particularly in connection with (but not limited to) the termination of lease agreements. However, unfortunately, not all the debated changes were implemented. The amendment will come into force on October 1 2006.
The amendment entails advantages for both the tenant and the lessor. For example, after the entry into force of the amendment, the tenant will no longer be required to terminate a lease agreement through the courts. However, the amendment grants the lessor a second chance if it fails to evict the tenant at the end of a lease.
The present act contains an exception regarding leasing objects situated in lofts approved by building permits issued after December 31 2001. According to this exception, only certain provisions of the Rent Act apply to lease agreements for such leasing objects. For example, the restrictions on the termination of such lease agreements do apply, whereas the provisions concerning rent control do not (for further details please see the Overview (December 2004)).
The recent amendment clarifies that this exception also covers loft extensions in the sense of physical modifications to cubic space and increases in height. Further, the same exception applies to physical additions to the building.
The amendment extends the lessor's duty to provide maintenance. According to the amendment, the lessor must avert considerable endangerments to residents' health, regardless of whether the endangerments stem from general parts of the building, common facilities or leased property. The lessor's duty also extends to the inside of the leased property if the endangerment originated in the leased property. However, the lessor's duty does not include those interferences that could be perceived only with abnormal sensitivity.
The existing Tenancy Act does not grant the principal tenant the right to compensation when he or she has to replace a defective thermal heater that was present in the apartment at the beginning of the lease. In contrast, the new amendment classifies the repair of a damaged heater as a recoverable investment and entitles the principal tenant to compensation.
The tenant's right to compensation pertains not only to wall-mounted heaters but also to central heating boilers installed in basements. Furthermore, the amendment provides temporal and formal provisions for enforcing compensation claims.
To avoid abuses and circumventions, the inheritance of lease rights for apartments specifically designed by the elderly by relatives is prevented by the following conditions:
If all these conditions are fulfilled, the tenant's family can neither acquire nor be assigned the lease after the principal tenant's death.
The amendment to the Tenancy Act imposes a duty on the tenant to notify certain defects to the lessor. In case of such notification the lessor shall have the opportunity to take measures to remedy the defects. To this end, the amendment grants an absolute period, not to exceed three months, running from the date when the lessor receives the tenant's notice.
Notice of a defect by the tenant is subject to no formal requirements and can be accomplished either orally or in writing. However, the tenant's duty to provide notice of defects is restricted to the unsuitability of the entire dwelling or a categorically important feature, rather than the absence or insufficient form of such features. Moreover, in order for the rental property's category to be reduced, the tenant must give notice of the defect and the lessor must fail to remedy the defect within the three-month period. Even if the lessor has begun to remove the defect but has not yet finished at the end of three months, it will lose its opportunity to renovate and the category will be lowered.
If the tenant fails to notify the lessor in time, the defect shall not be taken into account when determining the maximum permissible rent.
Under the present Tenancy Act, lease agreements can be terminated only by court order. The amendment removes this much criticized requirement for the tenant. Thus, under the amendment the tenant can terminate the lease agreement by written notice. If the termination period is not met, then the termination is deemed to be effective for the next possible date.
The lessor is still required to terminate lease agreements through the courts.
Under the new provisions, a limited tenancy will no longer become an unlimited tenancy when the lessor fails to evict the tenant (either by mistake or kindness). In this case, the lease agreement is automatically renewed for a three-year period, whereby the tenant has the indispensable right to terminate the lease by giving three months' notice. If this three-year period lapses and the lessor still fails to evict the tenant, then the tenancy becomes an unlimited lease as under the old regime.
Parliament passed an amendment to the Condominium Act along with the amendment to the Tenancy Act. This amendment also enters into force on October 1 2006.
The present Condominium Act was adopted only in 2002 (for further details please see "New Condominium Act Acknowledges Ownership Investment Potential"). Although the amendment does not modify the essential aspects of the Condominium Act, it does introduce some important changes.
The amendment clarifies that condominium ownership can also be established over parking spaces for motorized vehicles that have been made possible through modern techniques (eg, parking spaces on mechanical rockers or parking lifts). The only requirement is that each parking space be designated to a specific owner.
Further, the amendment lifts some of the existing restrictions on the separate sale of parking spaces during the first three years following the establishment of condominium ownership.
Under the present act, two persons may hold condominium ownership jointly. The recent amendment provides that each of them can sell his or her share in the apartment, subject to the permission of the other person. The co-owners may still pledge their ownership only jointly. In addition, the amendment contains certain provisions regarding the death of one of the co-owners.
The amendment also deals with:
For further information on this topic please contact Nikolaus Pitkowitz or Martin Foerster at Graf & Pitkowitz Rechtsanwälte GmbH by telephone (+43 1 401 17 0) or by fax (+43 1 401 17 40) or by email (firstname.lastname@example.org or email@example.com). The Graf & Pitkowitz Rechtsanwälte GmbH website can be accessed at www.gmp.at.
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