Due to the corona pandemic, which threatens the whole world and thus also Austria, the Federal Government decided on far-reaching containment measures (Austrian COVID-19 Measures Act).
By introducing the Austrian COVID-19 Measures Act (and the 96th Ordinance on provisional measures to prevent the spread of COVID-19) it was made possible to prohibit the "entering of business premises or only certain business premises for the purpose of purchasing goods and services", insofar as this is necessary to prevent the spread of COVID-19.
However, these appropriate measures are currently threatening the existence of one-person companies and small and medium-sized enterprises with low cash reserves. The exemption of rent payments could therefore be a great relief for the tenant (lessee).
In this respect, Sections 1104 and 1105 of the Austrian Civil Code (ABGB) state that no rent is due if the property in question cannot be used due to extraordinary circumstances, such as an epidemic. Whether an extraordinary circumstance is present has to be assessed individually. The constant jurisdiction states that this includes any circumstance which, despite due care, cannot be avoided and, as a consequence, one cannot be blamed for.
Due to the measures taken worldwide to contain the virus, such as the Austrian COVID-19 Measures Act that came into force, it can be assumed that an "extraordinary circumstance" has occurred. The tenant (lessee) is thus exempted from his obligation to pay rents if it is no longer possible for him or her to use the property.
In return, the owner (lessor) is not obliged to restore the property. If, under certain circumstances, the property cannot be used only partially, the rent shall be reduced proportionately. Whether the entire property or only a part of it cannot be used, always has to be assessed according to the purpose of the individual contract. Apart from the rent reduction, the tenant concerned (lessee) has the right to terminate the contract in accordance with Section 1117 Austrian Civil Code (ABGB) if it is not to be expected that the existing property can be used again in the near future.
Tenants (lessees), who have to stop their business activities in whole or in part due to COVID-19, can generally be entitled to reduce the rent for the existing property in whole or in part. In each individual case, it will have to be assessed whether and to what extent a rent reduction is justified, since, for example, the rental agreement may contain different regulations. In case of doubt, however, the rent should only be paid under reserve.
If you have any further questions, please contact the author of this article: Attorney Mag Lukas Bittighofer