Practice areas
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Tenancy & Lease Law

We draft and review tenancy and lease agreements and act in terminations, rent disputes and evictions. Whether it is a flat, commercial premises, a business lease or farmland – we first establish which rules apply and align the agreement with them. We tell you frankly how we assess your matter and give you an estimate of the costs.

We advise landlords and tenants, lessors and lessees – from drafting the agreement to eviction proceedings.

Tenancy and lease law in Austria is layered and shaped by a large number of statutory provisions, in particular the Civil Code (ABGB) and the Tenancy Act (MRG). Which rules apply depends decisively on the year the building was constructed, the type of property and the scope of what is handed over. The statute itself sets the first switch: under § 1 para 1 MRG, the Tenancy Act covers only the tenancy of flats and commercial premises. Leases remain governed by the ABGB, and leases of agricultural land additionally by the Agricultural Leases Act. We clarify this preliminary question first – almost everything else follows from it.

Our services in tenancy and lease law

  • Drafting agreements: residential and commercial tenancies, lease agreements, fixed terms, index clauses, deposit arrangements.
  • Reviewing the rent: category rent and reference-value rent, service charge statements, recovery of excessive amounts.
  • Business and commercial leases: distinguishing lease from tenancy, the duty to operate, lease rent and turnover rent, return of the property and compensation for investments.
  • Agricultural leases: lease agreements for farmland, duration and extension, appropriate lease rent, proceedings before the district court.
  • Fixed terms and extensions: validity of fixed terms, chains of successive fixed terms, the fixed-term discount.
  • Termination and eviction: judicial notice of termination, grounds for termination, rent and eviction actions, defence against unjustified notice.
  • Defects and rent reduction: the landlord's or lessor's maintenance obligations, reduction where usability is impaired, damages.
  • Alterations to the property: consent requirements, obligations to remove alterations, compensation for investments on termination.
  • Handover and return: records, settlement of the deposit, disputes over the condition on return.

Full application, partial application, exemption

The MRG does not apply uniformly everywhere, and this gradation determines rent ceilings, protection against termination and the rules on fixed terms:

  • Full application: among others, older flats in buildings with a building permit issued before 30 June 1953, as well as commercial premises. Rent limits and statutory protection against termination apply most strictly here.
  • Partial application: for example, new buildings after that date, condominium flats and subsidised properties. Rent can be freely agreed, but protection against termination and the rules on fixed terms still apply.
  • Full exemption: among others, buildings with one or two units, holiday flats and tenancies of up to six months. Only the ABGB applies.

New since 2026: indexation capped, fixed terms extended

With the Fifth Rent Law Inflation Relief Act (5. Mietrechtliches Inflationslinderungsgesetz) and the Rent Indexation Act, the legislature intervened twice as of 1 January 2026. First, indexation of residential rents within the full and partial scope of the MRG is capped – at most one per cent in 2026, at most two per cent in 2027; from 2028 only half of the inflation above three per cent will be passed on. This also applies to existing agreements. Second, the minimum fixed term for new and extended residential tenancy agreements was raised from three to five years. For landlords this means: index clauses and chains of fixed terms belong under review; for tenants: rent demands are open to recalculation. We handle both.

A lease follows different rules from a tenancy

Whether an agreement is a tenancy or a lease is not decided by its heading. Under § 1091 ABGB there is a tenancy where the object handed over can be used without further work being put into it, and a lease where it can be exploited only through effort and industry. In a business lease (Unternehmenspacht) the subject matter of the agreement is a going concern: alongside the premises, the lessor also provides what is essential to the operation of the business and to its continued economic existence – operating assets, customer base and trade licence. The Supreme Court (OGH) does not require all of these features to be present at once; it is enough that the business continues to exist as a legal and economic unit.

The classification decides the level of protection. The MRG covers only the tenancy of flats and commercial premises; neither its statutory protection against termination nor its rent ceilings nor its rules on fixed terms apply to a lease. For the lessee this means: whatever security of tenure he wants must be written into the agreement. Where no duration is agreed, § 1116 ABGB applies – a lease must be terminated six months in advance, a tenancy of immovable property fourteen days. The lessor may dissolve the agreement early under § 1118 ABGB where the lessee makes significantly detrimental use of the property or is in arrears with the rent after being put on notice.

Against a change of owner there is one safeguard: a right registered in the land register is a right in rem under § 1095 ABGB, which the subsequent owner must accept for the remaining term. Without registration, and outside the MRG, the tenant or lessee must give way to the acquirer after due notice and is left with a claim for damages against the lessor (§ 1120 ABGB).

In a business lease, the duty to operate, the lease rent and the return decide the outcome

The duty to operate. It is found in no statute; it arises from agreement. The OGH treats it as the decisive feature separating a lease from a tenancy: where a duty to operate has been agreed, the contract is a lease. An empty formula does not suffice – there is a duty to operate only where a genuine economic interest in the continuation of the business exists. Opening hours, the type of business and the consequences of a closure therefore belong in the agreement.

The lease rent. It is freely agreed; the MRG's rules on rent-setting do not apply. A turnover rent with a guaranteed minimum is common. Where the leased property is so defective that it is unfit for the agreed use, no rent is payable for the duration and to the extent of that unfitness (§ 1096 ABGB). In the case of extraordinary events, § 1104 ABGB applies: where the property cannot be used at all, no rent is payable. The partial remission under § 1105 ABGB, by contrast, is narrowly drawn for a lessee – it requires an estate leased for one year only whose yield has fallen by more than half of the usual return. Anyone leasing for longer needs a clause of their own.

The return of the property. Under § 1109 ABGB the leased property must be returned in accordance with any inventory drawn up, or at least in the condition in which it was taken over; leased land must be returned in ordinary agricultural condition. A right of retention does not protect the lessee here. For damage and wear caused by misuse he is liable for the fault of his subtenant as well – but the lessor must claim that compensation in court within one year of the property being returned (§ 1111 ABGB). The OGH treats this period as a preclusive one: once it has run, the right is extinguished, not merely time-barred.

Compensation for investments. The claim under § 10 MRG covers expenditure by the principal tenant of a flat; it does not apply to leases or to commercial premises. What remains is § 1097 ABGB: anyone who has incurred expenditure that was the lessor's responsibility (§ 1036 ABGB) or useful expenditure (§ 1037 ABGB) is treated as an unauthorised agent and must claim reimbursement in court within six months of the property being returned; after that the action is extinguished. Six months are rarely enough while the final account is still being negotiated – which is why compensation for investments belongs in the agreement.

Leases of agricultural land are governed by the Agricultural Leases Act

Where land – alone or together with residential and farm buildings – is leased predominantly for agricultural use, the agreement is governed by the Agricultural Leases Act (Landpachtgesetz); allotment gardens under the Allotment Gardens Act are excluded. Two principles come first: the rights granted there cannot validly be waived, and arbitration agreements are not permitted.

The Act works with guideline lease periods: fifteen years for holdings devoted predominantly to commercial horticulture, viticulture or fruit growing, ten years for agricultural holdings of another kind and for individual plots used in those ways, five years in all other cases. Where the lessee's interest in continuing prevails over the lessor's interest in ending the lease, the court must extend its duration on the lessee's application – by four, three or two years, depending on the guideline period. A lease rent counts as appropriate where it secures to each side the share of the attainable yield that corresponds to the value of its contributions. Jurisdiction lies with the district court in whose district the leased property wholly or mainly lies; the matter is decided in non-contentious proceedings, and the court's orders take the place of the corresponding contractual provisions.

Rights and obligations at a glance

The landlord or lessor owes handover and maintenance in a usable condition – roof, heating, water, electrics – while the tenant or lessee owes payment of the rent, notification of necessary repairs and careful treatment of the property. Minor maintenance work often falls to the tenant or lessee. Where usability is impaired, for example by damp or a heating failure, a claim to a reduction in rent exists for the duration of the impairment. Alterations to the property require the landlord's or lessor's consent depending on their scope and the level of application; a claim for compensation may arise on termination for investments that increased the value.

Tenancy and lease disputes in Salzburg

Tenancy and lease matters in Salzburg are decided by the district courts; in municipalities with an established conciliation board, that board is a mandatory first step for certain tenancy matters. Applications under the Agricultural Leases Act, by contrast, belong in the non-contentious proceedings of the district court in whose district the leased property lies. Eviction and rent actions generally proceed quickly, which is why deadlines must be taken particularly seriously here. We act for either side – and advise an out-of-court solution wherever proceedings would only generate costs.

The best time is before signing

Most tenancy and lease disputes can be traced back to the agreement, not to the conduct of the parties. A review before signature costs a fraction of what later proceedings cost. Send us your draft agreement – we will tell you what you are committing to.

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Frequently asked questions

When does the Tenancy Act apply, and when only the Civil Code?

When does the Tenancy Act apply, and when only the Civil Code?

The Tenancy Act (MRG) has three levels. Full application covers, for example, older flats in buildings with a building permit issued before 30 June 1953 and commercial premises; rent-setting, fixed terms and protection against termination are then strictly regulated. Partial application – with protection against termination and rules on fixed terms, but free rent-setting – covers, among others, new buildings built after that date and condominium flats. Full exemptions apply, for example, to buildings with only one or two units and to tenancies of up to six months; there, only the ABGB applies. An even more basic distinction comes first: under § 1 para 1 MRG the Act covers tenancies only, not leases. Which level applies determines almost everything that follows – we clarify that first.

What is the difference between a tenancy and a lease?

What is the difference between a tenancy and a lease?

A tenancy grants use of an object; a lease additionally grants its commercial exploitation, that is, the taking of profits – § 1091 ABGB asks whether the object can be used without further work being put into it. Anyone taking over premises together with the business, customer base and fittings is generally a lessee; anyone renting only the empty rooms is a tenant. The Supreme Court (OGH) treats the duty to operate the business (Betriebspflicht) as the decisive distinguishing feature. The distinction has consequences: the MRG covers only the tenancy of flats and commercial premises, so neither its protection against termination nor its rent ceilings apply to a lease. Where no duration is agreed, a lease must be terminated six months in advance, a tenancy of immovable property fourteen days (§ 1116 ABGB).

As the lessee of business premises, must I keep the business open?

As the lessee of business premises, must I keep the business open?

No statute imposes a duty to operate; it arises from the agreement – and it is the norm in a business lease, because the lessor has an economic interest in the business continuing. The OGH treats it as the decisive feature separating a lease from a tenancy: where a duty to operate has been agreed, the contract is a lease. An empty formula does not suffice, however; there is a duty to operate only where a genuine economic interest in the continuation of the business exists. Anyone agreeing such a duty should expressly settle opening hours, the type of business and the consequences of a closure.

Will my investments as a lessee be reimbursed when the lease ends?

Will my investments as a lessee be reimbursed when the lease ends?

Only to a limited extent. The claim for reimbursement under § 10 MRG expressly covers expenditure by the principal tenant of a flat; it does not apply to leases or to commercial premises. What remains is § 1097 ABGB: anyone who has incurred expenditure that was the landlord's or lessor's responsibility (§ 1036 ABGB) or useful expenditure (§ 1037 ABGB) is treated as an unauthorised agent. The time limit is what matters – reimbursement must be claimed in court within six months of the property being returned, otherwise the action is extinguished. An express provision on compensation for investments is therefore the most effective lever; it belongs in the agreement, not in the final account.

Do separate rules apply to leases of agricultural land?

Do separate rules apply to leases of agricultural land?

Yes. Where land is leased predominantly for agricultural use, the agreement is governed by the Agricultural Leases Act (Landpachtgesetz); allotment gardens under the Allotment Gardens Act are excluded. The rights granted there cannot validly be waived, and arbitration agreements are not permitted. The Act sets guideline lease periods (Richtpachtzeiten) – fifteen years for holdings devoted to commercial horticulture, viticulture or fruit growing, ten years for agricultural holdings of another kind and for individual plots used in those ways, five years in all other cases – and allows the lessee to apply for an extension where his interest in continuing prevails. The matter is decided by the district court in non-contentious proceedings.

May my landlord increase the rent?

May my landlord increase the rent?

That depends on the contract and on the level of application. Index clauses allowing an adjustment to the consumer price index are common – but they must be validly agreed and correctly calculated. Where the MRG applies in full, category rent and the reference-value rent (Richtwertmietzins) additionally cap the amount; excessive sums can be reclaimed. Since 1 January 2026 the Rent Indexation Act caps the adjustment of residential rents within the full and partial scope of the MRG: at most one per cent in 2026, at most two per cent in 2027; from 2028 only half of the inflation above three per cent is passed on. We review the demand and recalculate it.

Is my fixed-term tenancy agreement valid?

Is my fixed-term tenancy agreement valid?

Where the MRG applies, the fixed term must be agreed in writing and determined by stating an end date. For flats, the minimum duration for agreements and extensions has been five years since 1 January 2026; for agreements concluded before that, three years applied. If either of these requirements is missing, the agreement is treated as open-ended – with full protection against termination. A discount is also prescribed for the fixed-term rent. A review is worthwhile, particularly with chains of successive fixed terms.

When may the landlord terminate the tenancy?

When may the landlord terminate the tenancy?

Where the MRG applies in full, only on the important grounds listed in the statute – such as significantly detrimental use, qualified rent arrears or the landlord's own need – and only through the courts. Outside the MRG, termination is freer but follows the contract. Tenants can generally terminate on the agreed notice period. In the case of rent arrears, payment in full is often still possible up to the close of the hearing – acting quickly pays off.

How long does an eviction action take?

How long does an eviction action take?

That depends on whether the claim is contested. Uncontested proceedings, including enforced eviction, are often completed within a few months; where the claim is contested or a stay of eviction is requested, it takes correspondingly longer. Where termination is for rent arrears, the tenant can also avert eviction by paying the arrears in full up to the close of the hearing. For landlords, a cleanly prepared title is therefore what counts – procedural errors cost more time than the proceedings themselves.

When must the deposit be repaid?

When must the deposit be repaid?

After the tenancy object has been returned, the deposit must be settled without delay and repaid together with interest, unless the landlord has justified claims – such as outstanding rent or damage beyond ordinary wear and tear. Ordinary wear and tear is not a ground for retention. A joint handover record with photographs on moving in and moving out avoids the most common dispute.

Can I terminate a fixed-term tenancy agreement early?

Can I terminate a fixed-term tenancy agreement early?

Where the Tenancy Act applies in full, the tenant may terminate a fixed-term principal tenancy agreement (Hauptmietvertrag) at any time after one year has elapsed, effective at the end of a month, on three months' notice. The landlord remains bound by the fixed term. A fixed term is only valid at all if it is agreed in writing and the end date is fixed beyond doubt; otherwise the agreement is treated as open-ended. For flats a statutory minimum duration applies: five years for agreements from 1 January 2026, three years for those concluded before that.

What is the reference-value rent and when does it rise?

What is the reference-value rent and when does it rise?

For older flats within the full scope of application, the reference value (Richtwert) set for each federal province forms the basis of the permissible principal rent (Hauptmietzins). Starting from the reference value, surcharges and discounts are calculated for location, fittings, floor or state of repair – these items are the most frequent point of dispute. The reference values are adjusted by statute; index clauses agreed in the tenancy agreement operate independently of that. Whether the rent charged is covered can be reviewed in proceedings before the conciliation board or the district court.

Last reviewed September 2026

This overview is general in nature and does not replace advice on an individual case. We research carefully; even so, errors cannot be ruled out and the law keeps changing. Binding information is given in a personal consultation.

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