Under Austrian law the ownership of a building is generally vested with the owner of the land, unless a third party holds a development right with regard to the property or the building constitutes a superstructure. In a recent decision the Supreme Court called the criteria of what constitutes a superstructure into question.
In a recent judgment the Supreme Court ruled that a lease agreement for business premises in a shopping mall falls within the scope of the Rent Act, and thus the tenant should enjoy tenancy protection. Although this judgment confirms a previous judgment, it is still undecided whether the act generally applies to business premises in shopping malls.
The Developers' Contract Act concerns agreements for the acquisition of apartments or other real property before the construction of the building. The act generally intends to protect the buyer against onerous provisions dictated by the typically stronger developer. Parliament has recently passed a reform of this act.
In two recent decisions the Supreme Court held that certain clauses contained in widely used standard forms for rent agreements violate the Consumer Protection Act and the Tenancy Act, respectively. The court has now handed down the first follow-up decision on an individual agreement containing one of the clauses in question, albeit not in the context of a consumer contract.
Under Austrian tenancy protection laws landlords can, in general, terminate lease agreements only in certain specified circumstances (eg, if the tenant defaults on its lease obligations). A recent Supreme Court decision addressed the question of whether a landlord still has a right to terminate the tenancy agreement if its tenant is in arrears with monthly payments and subsequently files for bankruptcy.
In Autumn 2006 the Supreme Court held for the first time that the Consumer Protection Act also applies to the landlord-tenant relationship and blacklisted 39 clauses contained in a standard lease form. The court recently developed this jurisprudence by questioning the validity of repair and renewal obligations imposed on the tenant.
The Supreme Court has held a creative interpretation of the rules on the admissible height of buildings, which had become regular practice in Vienna, to be unlawful. As a result, all procedures involving building permit applications that would be rejected as a result of this ruling have been stayed pending the enactment of a new law.
In a recent ruling the Supreme Court analyzed a standard form widely used for rent agreements and held that 39 of the contract clauses were unlawful. These clauses ranged from minor matters, such as certain formal requirements, to the key clauses of lease agreements, such as the tenant's duty to maintain the rented property in good order.
The Supreme Court has ruled that a lease agreement concerning a shop situated in a shopping centre fell within the scope of the Rent Act and, therefore, the tenant enjoyed tenancy protection. If this decision is generally applied, landlords will find it increasingly difficult to terminate thousands of lease agreements for shops in shopping centres, airports and stations.
If an entity operating on leased premises is transferred in a share deal, the lessor is entitled to increase the rent to the market level, provided that the opportunity to exercise legal or economic influence in the entity subsequently changes. A recent Supreme Court decision not only explicitly confirms the change of control theory, but also comprehensively sets out its theoretical basis.
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. At the same time, Parliament has also amended the Condominium Act.
In a recent Supreme Court case a real estate agent was engaged by a seller. After a purchase agreement had been concluded, the agent requested a 3% commission from the purchaser. The purchaser refused to pay, arguing that he had not concluded an agency agreement with the agent and that he was not aware that the agent was also acting on his behalf. The Supreme Court rejected the agent's claim.
Under Austrian law, special provisions regulate superstructures. A 'superstructure' is a building which is erected on the land of another party with the express intention that it should not remain there forever. In a recent case the Supreme Court confirmed that the Rent Act applies (by analogy) to the lease of empty building lots for the purpose of constructing a superstructure there.
Section 12a of the Tenancy Act provides that if a legal entity rents business premises and the opportunity to exercise legal or economic influence in that entity subsequently changes (eg, through transfer of the majority of the issued share capital), the lessor becomes entitled to increase the rent to market levels. The Supreme Court has recently handed down several decisions interpreting this provision.
Following recent uncertainty over whether the lease agreements for shops and businesses in airports and stations fall within the scope of the Rent Act, the Supreme Court has held that such agreements are not protected by the act as they do not concern the lease of business premises.
In a recent decision the Supreme Court ruled out the possibility of agreeing arbitral clauses with respect to core provisions of rent agreements. It has also handed down a number of decisions in cases where tenants occupying commercial premises requested a rent reduction due to increased competition from new businesses opening in the immediate vicinity.
The Fifth Chamber of the Supreme Court recently handed down a decision on the lessor's right to increase rent in light of corporate transactions. The decision deviates significantly from past case law and creates a great degree of uncertainty as to the effects of corporate transactions on the retail sector in particular.
The new Real Estate Investment Funds Act took effect on September 1 2003. The act aims to make risk-diversified real estate investments accessible to a wide range of investors. Real estate investment funds are subject to relatively strict organizational rules in order to protect investors.
In separate rulings, the Supreme Court has ruled on the effects of a breach of a non-compete clause, premature termination of a fixed-term lease and detrimental use of the lease object. In particular, the non-compete clause ruling represents a landmark decision by the court.
Including: Real Property Law; Tenancy Law; Taxation.