Lease reduction due to an access ban during lockdown (OGH 25.01.2022, 8 Ob 131/21d)

Created by Mag. Fridolin Fahringer |
Civil Law

The lease of a rental property is not only to be lowered if the object itself becomes unusable due to an ‘epidemic’ such as COVID-19, but also because of an official access ban order. However, in case the leased property is still partially usable the lease is only reduced partially. The extend of such measure depends on whether the limited possibility of use, such as offering take-away, is both possible and economically feasible for the tenant.

1. Background

The plaintiff is the owner and the defendant the tenant of a business premises in Vienna. The defendant runs a restaurant in the rented business premises. Due to the (second) lockdown in November 2020, it was prohibited to enter inter alia restaurants for the purchase of goods and consumption. The defendant refused to pay the lease during the lockdown between November 2020 and January 2021. The plaintiff argued that the rental object was at least partially usable, as the defendant could have offered a take-away and claimed € 13.342,11 for the outstanding lease.

2. COVID-19 as an ‘epidemic’ within the meaning of § 1104 ABGB (Austrian Civil Code)

In case of a complete unusability of an existing object due to ‘extraordinary coincidences’ according to § 1104 ABGB no rent is to be paid (‘plague’). This also applies if the unusability derives from administrative order (e.g. access ban) rather than an impairment of the physical substance.

3. Partial usability due to the possibility of a take-away?

The partial usability of the leased property is to be assessed according to the purpose of the contract: It should be possible to use the leased property in a manner usually required according to the contractual purpose. The two main factors of consideration are the agreement itself and the business purpose. For e.g., if the agreed use is characterized by customer traffic entirely, an access ban results in a complete unusability of the leased property, while a partial unusability only results in a partial lease reduction.

In the present case – a restaurant - the tenant did not offer any take-away service during the lockdown. The Supreme court held, that catering services such as take-away services are generally caught under the scope of 111 (4) (4) (a) of the Austrian Trade Regulation Act (GewO) regarding restaurants. Hence, according to the Supreme Court, the owner can theoretically claim at least a partial lease for the period of the lockdown.

4. Lack of customers

However, the Supreme Court further stated that a tenant can in any case invoke that the establishment of a delivery or pick-up service, that had not been operated so far, would not have been feasible (immediately), as the take-away service would have been expected to be a sustainable loss-making business due to a lack of customers. Because additional facts were needed for concluding the judgment, the case was referred to the first instance court for supplementation.