Legal Questions Concerning the Corona Virus in Austria: Temporary Relief Measures for Tenants in Light of the COVID-19 Pandemic

On 3 April 2020, Austria adopted the 4th COVID-19 Act which includes provisions in the area of property law to help ease the burden on apartment tenants who are having difficulty paying rent for private residential dwellings.

Under Section 1118 of the Austrian Civil Code, landlords are not permitted to terminate leases or demand lease cancellations if a tenant is unable to pay his or her rent partially or in full for payments due between 1 April and 30 June 2020. This protection only applies to those tenants who have experienced severe financial hardship due to state of emergency that has been enacted in the wake of the pandemic. The tenant must have experienced a loss of income due to the special measures currently in effect and this income loss must be the reason for the total or partial non-payment of rent. Therefore, tenants taking advantage of the payment deferral provision will have to provide evidence of loss of income.

Another measure meant to aid residential tenants currently affected by severe financial setbacks during the pandemic, is a law which temporarily prohibits the ability of landlords to collect rent payments through legal claims.

Accordingly, the landlord/landlady may not legally demand payment of the rent that would be due between 1 April and 30 June 2020 until the end of 31 December 2020. Likewise, paid deposits may not be used to make up for rent arrears. This provision is not a legal postponement of the due date, but rather a temporary suspension of the enforceability of the claim. The statutory default interest of 4% per annum must be paid in any event from the due date of the respective amount. No default interest – exceeding the statutory interest rate – is payable for late payment of the rent due in the second quarter of 2020. This also applies to those cases involving tenants who can prove that they have been affected by severe financial hardship due to the current emergency situation.

The 4th COVID-19 Act also contains a special provision to § 29 of the Austrian Tenancy Act („MRG“). This concerns the temporary and exceptional option to extend residential lease contracts for a period shorter than the statutory three years: A fixed-term residential lease agreement subject to the provisions of MRG that would have normally expired after 30 March 2020 and before 1 July 2020 may, in deviation from the previous provision, be extended in writing until the end of 31 December 2020 or for a shorter period of time. If the respective rental agreement is neither contractually extended nor terminated after the expiry of the extension referred to above, Section 29 para. 3 lit. b MRG shall apply. According to this provision, such lease agreements shall be extended once for a period of three years. The tenant shall, however, have the undeniable and unrestricted right to terminate the renewed lease agreement at the end of each month, either in writing or in court, with a three-month notice. If the landlord does not terminate the lease agreement after the second three-year lease cycle, the agreement shall be legally deemed as having been extended for an indefinite period.

As previously mentioned, these 4th COVID-19 Act provisions only benefit tenants who use apartments for private residential purposes and who can provide evidence that they have suffered severe financial difficulties due to the current state of emergency in the wake of the Corona pandemic. It is irrelevant, however, whether the provisions of the MRG apply to the tenancy in whole or in part (Section 1 para. 4 MRG) or not at all (Section 1 para. 2 MRG, for example, for single-family home leases). The only thing that is relevant is that the lease is for a private residence.

The 4th COVID-19 Act has not created any special exemption provisions for tenants of business premises or storage spaces. Leases involving such premises are legally subject to relevant provisions of the ABGB and may, under certain circumstances, also be entitled to rent reductions on the basis of § 1104 ABGB. (See: https://www.specht-partner.com/coronavirus-rent/ )

The 4th COVID-19 law was passed to prevent or postpone forced evictions of residential dwellings. This measure aims to prevent the eviction of tenants who, due to the current situation, cannot find other housing at the moment and would thus become homeless. According to this new regulation, obligated parties (tenants) can request postponements of apartment evictions irrelevant of lease termination reasons. However, deferments are only justified in cases in which the dwellings are urgently needed by obligors for residential purposes and such deferments do not cause serious personal or economic disadvantages to the landlords. An example of such a disadvantage would be that the dwelling is urgently needed by the landlord or his or her relative. Another relevant economic reason would be that the apartment to be vacated has already been rented out to a third party, and the expected rental income is to be used to service a restructuring loan.

Execution proceedings can be commenced upon request as soon as the current measures taken to prevent the spread of COVID-19 have been lifted. At the latest, however, six months after deferment approval. The proceedings shall commence within three months of the granting of the stay only if the above conditions are no longer fulfilled.

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Our series of articles on legal questions concerning corona virus are meant to provide general information to pressing legal concerns and should in no way be construed as legal advice for a particular case. For legal advice tailored to the concerns of you or your business, please contact us at: vienna@specht-partner.com. We’re here to help.

See all our Corona-Virus Articles here:

  1. Miete (Deutsch)
  2. Rent (English)
  3. Doppelbesteuerungsabkommen zwischen Österreich und der Russischen Föderation (Deutsch)
  4. Double Taxation Treaty between Austria and the Russian Federation – (English)
  5. Fristenmoratorium (Deutsch)
  6. Moratorium on Legal Deadlines (English)
  7. Erleichterungen für Mieter von Wohnungen (Deutsch)
  8. Temporary Relief Measures of Tenants (English)