Fixed-term tenancies: when the fixed term is ineffective

Fixed-term residential tenancies have become the norm. Less well known is how strict the requirements are and what the consequence is when one of them is missing.

Three requirements

Where the Austrian Tenancy Act applies, a fixed term is only effective if it is

1. agreed in writing,
2. fixed unconditionally by a specific end date (an actual date, not "for approximately two years"), and
3. for residential property, at least as long as the statutory minimum term, that is, five years for agreements concluded or extended since 1 January 2026 where the landlord is an entrepreneur within the meaning of the Consumer Protection Act, and three years in all other cases, including older agreements.

If one of these requirements is missing, the agreement as a whole does not fail, only the fixed term does; the agreement counts as concluded for an indefinite period, with full statutory protection against termination. For landlords that is a considerable difference, because notice can then only be given on the important grounds listed in the statute, and only through the courts.

Since 2026: five-year minimum term where the landlord is an entrepreneur

With the fifth Rent Inflation Relief Act (5. MILG), the legislator raised the minimum fixed term for residential tenancies within the full and partial scope of the Tenancy Act from three to five years as of 1 January 2026, for new agreements as well as extensions; for landlords who are not entrepreneurs within the meaning of the Consumer Protection Act, three years continue to apply (§ 29 para 1 no 3 lit b MRG). At the same time, the Rent Indexation Act limits index adjustments of residential rents within the scope of the Tenancy Act: the part of inflation exceeding three percent is passed on only by half, in existing agreements as well; for rents subject to the restrictions of the Tenancy Act, a cap of one percent in 2026 and two percent in 2027 applies in addition. Contract templates from before 2026 are therefore outdated on two central points.

The fixed-term discount

For fixed-term principal residential tenancies the statute provides for a discount on the permissible rent. It is frequently overlooked. Where too much has been charged, the overpayment can be reclaimed retrospectively within the statutory periods.

Extension and successive fixed terms

An extension is possible but is subject to the same formal requirements and likewise to the minimum term, five years since 2026 where the landlord is an entrepreneur. Where the property continues to be used tacitly after expiry and rent continues to be accepted, a statutory extension arises first; after that the tenancy becomes open-ended. A landlord who genuinely wants the fixed term to end must act in good time.

What tenants should check

Three points in the agreement deserve attention: is a specific end date stated? Does the term reach the statutory minimum, three or five years depending on the date of conclusion and the landlord? Was the fixed-term discount applied? If the answer to any of these is no, the legal position may be different from what was assumed.

For landlords, a contract template from the internet is the most common reason a fixed term later proves ineffective.