Index clauses: two Supreme Court rulings for landlords

Index clauses have occupied the courts for years – all the more since the Rent Indexation Act introduced its caps. Two decisions of the Austrian Supreme Court from spring 2026 bring clarity on two practically important points for landlords and tenants alike.

A defective clause does not mean: no indexation

In decision 1 Ob 2/26i of 28 April 2026 the Supreme Court held that a partially invalid index clause can be severable: if only the rules on how increases are asserted – such as deadlines and payment modalities – are invalid, the indexation agreement itself stands; the mandatory rules of § 16 Abs 9 MRG take the place of the invalid part. The tenant's claim for repayment, aimed at striking down the whole clause, failed.

For landlords this is good news: a drafting error in the mechanics does not automatically pull down the entire indexation. For tenants it means, conversely, that reclaiming overpaid amounts requires a precise analysis of which part of the clause is invalid.

Index base "last published index figure" holds

In decision 1 Ob 87/25p of 10 March 2026 the Supreme Court approved a widespread drafting technique: indexation may refer to the index figure last published at the time of conclusion, even though that figure naturally lies some months back. This does not violate § 6 Abs 2 Z 4 KSchG, as long as the back-reference does not lead to a genuine shift in equivalence over long periods.

What to do now

Neither decision changes the fact that, since 1 January 2026, the Rent Indexation Act caps adjustments of residential rents. Landlords should therefore have their index clauses reviewed twice over: for the validity of the wording – where the new decisions help with classification – and for the amount cap on permissible adjustment. Both together determine what may actually be charged.