Tenancy & Lease Law

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. Which level applies determines almost everything that follows – we clarify that first.

A tenancy grants use of an object; a lease additionally grants its commercial exploitation, that is, the taking of profits. 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 distinction has consequences: the MRG, with its protection against termination, does not apply to leases.

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.

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.

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.

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.

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.

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.

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.