Real Estate, Austria updates

Parliament stomps on stamp duty for residential leases
Graf & Pitkowitz Rechtsanwälte GmbH
  • Austria
  • November 24 2017

In the run up to the recent snap elections, Parliament passed a bill exempting rent agreements for residential leases from stamp duty. The stamp duty on non-residential leases – in particular, commercial and retail leases – remains unchanged. However, these leases are being re-evaluated due to recent case law from the tax authorities.

Another brick in the wall: Constitutional Court reviews statutory rent regulations
Graf & Pitkowitz Rechtsanwälte GmbH
  • Austria
  • August 18 2017

In 2015 Austria introduced an act which allows individuals, under certain conditions, to challenge laws before the Constitutional Court as unconstitutional. This gave hope to many landlords, which saw this as a tool to challenge the existing rent control regulations. The Constitutional Court recently handed down two new decisions on the same matter with surprising results.

Act on Equal Opportunities for Persons with Disabilities creates stumbling blocks for landlords
Graf & Pitkowitz Rechtsanwälte GmbH
  • Austria
  • February 03 2017

The Act on Equal Opportunities for Persons with Disabilities recently entered into full force. The act prohibits, among other things, constructional barriers which prevent or impede disabled individuals from entering a building without help. While the act primarily addresses persons offering goods or services in such buildings, it also has implications for persons publicly offering real estate. In addition, the act has a significant impact on existing and new lease agreements.

Two or more units? Supreme Court clarifies exception to Rent Act
Graf & Pitkowitz Rechtsanwälte GmbH
  • Austria
  • August 19 2016

While the Rent Act applies to both residential and commercial leases, there are some exceptions that give landlords greater flexibility with regard to their lease agreements. In particular, the act does not apply to buildings which house no more than two units. The Supreme Court recently considered whether a storage room and a separate building contained on the same property should be taken into account when applying this two-unit rule.

Urban development contracts fuel private real estate investments in Vienna
Graf & Pitkowitz Rechtsanwälte GmbH
  • Austria
  • May 27 2016

In an effort to alleviate the pressure on the real estate market, the Vienna City Council recently amended the Building Code. This amendment authorises the city, among other things, to conclude urban development contracts as a means of expediting private investment in real estate projects. Since the amendment entered into force, the city has concluded several contracts with real estate owners.

Supreme Court confirms direct liability of former tenant
Graf & Pitkowitz Rechtsanwälte GmbH
  • Austria
  • February 26 2016

Tenants sometimes refuse to vacate a leased premise after the expiry of their contract in the hopes of extending their lease or getting the landlord to pay them off (instead of undertaking a cumbersome eviction process), or for other reasons. The Supreme Court recently demonstrated that such tactics are not without risk, as tenants may face direct damage claims by successors.

Court upholds principal's right to conclude contract in agency agreement
Graf & Pitkowitz Rechtsanwälte GmbH
  • Austria
  • October 02 2015

Agency agreements typically differ from other agreements with regard to the way in which agents share risk. As such, agents try to limit their risk by including clauses in agency agreements which entitle them to remuneration even if the principal refuses to conclude the agreement. The Supreme Court recently ruled on such a clause and upheld the principal's right to choose whether to conclude the envisaged agreement.

New tax bill: heavy burden on share deals involving real property
Graf & Pitkowitz Rechtsanwälte GmbH
  • Austria
  • July 03 2015

As part of its overall tax reform, the government recently proposed a new act to amend the taxes relating to real estate transactions. As the new act will significantly increase the tax on real estate transactions, in most cases it is advisable to effect share deals involving real property before the act enters into force on January 1 2016.

Court reverses case law on directors' liability in M&A deals involving property
Graf & Pitkowitz Rechtsanwälte GmbH
  • Austria
  • April 10 2015

Under the Tenancy Act, if the shares in a company that rents property are sold, the landlord has the right to increase the rent to market level. Under previous case law, directors were liable only for rent payments that could not be recovered from the renting company directly. However, the Supreme Court recently ruled that a director was liable irrespective of the lessee's ability to pay the outstanding debts.

Asset deal – buyer not bound by preferential lease rights
Graf & Pitkowitz Rechtsanwälte GmbH
  • Austria
  • January 23 2015

By law, the buyer of a property automatically enters into existing lease agreements on behalf of the seller. However, the Supreme Court recently rendered a judgment stating that this does not necessarily apply to all clauses contained in a lease agreement, thereby redefining the scope of this provision.

Tenant may install video camera outside leased object without lessor's consent
Graf & Pitkowitz Rechtsanwälte GmbH
  • Austria
  • October 31 2014

In a recent case involving a tenant who had affixed two mock cameras to the front of his property without obtaining the landlord's prior consent, the Supreme Court analysed the tenant's rights in this context. It ruled that, based on the direction and position of the cameras, an impartial observer would not have the impression of being monitored. Hence, the action was dismissed.

New act affects withdrawal rights on real estate agreements
Graf & Pitkowitz Rechtsanwälte GmbH
  • Austria
  • August 08 2014

Parliament recently passed a bill to implement the EU Consumer Rights Directive (2011/83/EC). The act affects consumers' rights to withdraw from certain contracts concluded outside the trader's ordinary place of business and those concluded using distance communication. This update focuses on the effect of the act on real estate-related agreements.

New case law on fixed-term leases creates pitfalls for landlords
Graf & Pitkowitz Rechtsanwälte GmbH
  • Austria
  • May 09 2014

Tenancy law stipulates certain formal criteria for fixed-term leases. In particular, agreements must be in writing and specify a definite end date. If these criteria are not met, the landlord cannot enforce the end date. Two Supreme Court decisions on these criteria underline that parties need to agree whether they want to provide for a renewal option or a non-binding declaration of intent before signing a lease agreement.

Double sale: Supreme Court enhances rights of injured party
Graf & Pitkowitz Rechtsanwälte GmbH
  • Austria
  • February 21 2014

The Supreme Court recently allowed a direct claim by the first purchaser against the second purchaser in case of a double sale of a property. A direct claim against the second purchaser, such as in the case at hand, is particularly useful in a scenario where the seller is insolvent, as the property is not handed back to the seller and then passed on to the first purchaser, but rather transferred directly between the two buyers.

Taxation of real estate lotteries can be a gamble
Graf & Pitkowitz Rechtsanwälte GmbH
  • Austria
  • November 29 2013

Following the rise in demand for real estate in recent years, owners hoping to maximise their profits have started to look for new opportunities for liquidating their property. Willing to take extra risks, they have entered unfamiliar legal territory. Two recent Higher Administrative Court decisions regarding real estate lotteries show that such an approach is not always successful.

Supreme Court decision curbs consumers' rights
Graf & Pitkowitz Rechtsanwälte GmbH
  • Austria
  • September 13 2013

The Supreme Court was recently asked to assess whether a buyer of a house could rightfully initiate warranty claims against the seller by reason of defective insulation when the parties had confirmed in the purchase agreement that the exterior walls of the house had been damaged by moisture. The Consumer Protection Act provides that a consumer can waive its warranty claims only with regard to known defects.

Supreme Court finds hidden-defect clauses in lease agreements valid
Graf & Pitkowitz Rechtsanwälte GmbH
  • Austria
  • September 06 2013

The Supreme Court recently ruled that under the terms of a lease agreement between a tenant and its landlord, the landlord was obliged solely 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 shifted effectively and validly to the tenant. As this also comprised hidden defects, any repairs were the tenant's responsibility.

Supreme Court redefines tenant's duties at end of lease
Graf & Pitkowitz Rechtsanwälte GmbH
  • Austria
  • June 28 2013

In a recent decision, the Supreme Court ruled on the permissibility of clauses in rent agreements requiring the tenant to repaint the leased property and refurbish the flooring at the end of the lease, as well as on contractual penalties that would apply following late handover of the leased premises at the end of the lease. The decision will affect all types of tenant and types of leased property.

Act on Late Payment introduces mandatory rules for rent payments
Graf & Pitkowitz Rechtsanwälte GmbH
  • Austria
  • March 28 2013

Parliament recently introduced the Act on Late Payment, implementing the new EU directive on the same topic. The act aims to improve payment behaviour by introducing new due dates and increased interest rates. The act introduces new payment dates for rent agreements, depending on the type of property and parties involved, while taking into account the needs of tenants.

Land Register registration fee to draw on fair market value: significant rise in costs
Graf & Pitkowitz Rechtsanwälte GmbH
  • Austria
  • January 04 2013

In light of a Constitutional Court decision, Parliament recently passed a bill amending the provisions on the Land Register registration fee. As of January 1 2013, the fee for all types of property acquisition is generally calculated on the basis of the fair market value of the real estate. The amendments have a considerable impact on ancillary costs of such acquisitions.

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