Dispute over buyouts: What can you charge a new tenant for?

Austrian courts are scrutinizing 'Ablöse' payments, the buyouts tenants pay to take over rental properties, to ensure they are legally permissible. The core principle, governed by the Tenancy Law Act (Mietrechtsgesetz), states that a previous tenant cannot charge for simply handing over their tenancy. Any such agreement is void and the money is recoverable for up to ten years.

Permissible Ablösen require an 'equivalent consideration.' This typically applies to tangible assets like furniture or investments made in the property, where the payment reflects the remaining value or benefit to the new tenant. However, a recent high court decision (1 Ob 62/26p) has expanded this concept to include intangible advantages.

The case involved a tenant of a cooperative housing unit who opted not to buy the property but instead nominated a successor tenant. The outgoing tenant arranged a "private sale" with the new tenant for the property's inventory, demanding €115,000. This agreement was contingent on the cooperative's approval of the new tenant. The new tenant eventually purchased the property, benefiting from a shortened waiting period as part of the arrangement.

Disputes arose over the second installment of the payment, amounting to €57,500. The new tenant refused to pay, arguing the inventory was not worth half the price and that the payment constituted a prohibited Ablöse. The courts agreed, noting the buyer was under pressure to accept the terms due to their uncertain position as a potential successor tenant, thus limiting their free will in the negotiation.