We would like to ensure that you are still receiving content that you find useful – please confirm that you would like to continue to receive ILO newsletters.
06 September 2013
A lease agreement concerned premises in a business park that were used by the tenant for the purpose of operating a block heat power plant.
Operation of the power plant was subject to a public permit, which required that the floor of the machine hall be liquid-tight and oil resistant. At the time of concluding the lease agreement, neither the landlord nor the tenant was aware that the flooring did not meet these requirements. After learning about this defect, the tenant stopped operating the unit immediately and refused to pay the rent, arguing that the leased premises were not fit for the agreed use.
The landlord demanded payment of the full rent, relying on the following clause contained in the lease agreement:
"Tenant takes over the property as inspected. Tenant demands no further repairs or improvements deviating from this condition, and decides not to raise any objections that the rental object fully or partially does not have required or usually presupposed characteristics… Tenant agrees to maintenance of the inside of the rental property… Tenant takes over the property in the condition as described in Appendix ./2. Measures, which are furthermore required in order to operate tenant's operation in the property… have to be conducted by tenant at his own expense… Regulatory approvals, which are required for the operation, have to be obtained by tenant at his own expense. Tenant moreover agrees to bear all costs arising from complying with the relevant statutory provisions, administrative decisions and requirements."
The Supreme Court ruled that under the terms of the agreement, the landlord was obliged only to hand over the property in the condition as at the conclusion of the contract. Any necessary repairs for both existing and subsequently occurring defects were validly shifted to the tenant. As this also comprised hidden defects, such as the insufficient floor covering, the repairs were the tenant's responsibility. Therefore, the tenant was liable to pay the full rent.
For further information on this topic please contact Martin Foerster at Graf & Pitkowitz Rechtsanwälte GmbH by telephone (+43 1 401 17 0), fax (+43 1 401 17 40) or email (email@example.com). The Graf & Pitkowitz Rechtsanwälte GmbH website can be accessed at www.gpp.at.
The materials contained on this website are for general information purposes only and are subject to the disclaimer.
ILO is a premium online legal update service for major companies and law firms worldwide. In-house corporate counsel and other users of legal services, as well as law firm partners, qualify for a free subscription.