Our law firm has achieved a groundbreaking victory in a challenging case. The court of first instance followed our reasoning and confirmed the admissibility of a threshold clause – a decisive step forward in the highly topical debate on value protection clauses!

The value adjustment itself: The opinion of the Supreme Court that a value adjustment of the rent by the consumer price index (CPI) is justified, especially in the case of longer tenancy agreements, in order to maintain the equivalence relationship between the rent and the service in kind provided by the landlord is undisputed. This is because the landlord provides his service irrespective of monetary devaluation, whereas the loss of purchasing power can reduce the intrinsic value of the rent. A CPI value protection preserves the original value ratio by the tenant continuing to provide the agreed value-based service.

The value protection clause in question:

“It is agreed that the value of the main rent (the remuneration for co-rented furnishings and other services) shall remain stable in accordance with the Consumer Index 2015 published monthly by Statistics Austria or the index replacing it. The basis for this value assurance is the index figure 105.5 last published at the time the contract is concluded. Index fluctuations up to and including 5 % are not taken into account. This margin shall be recalculated to one decimal place each time it is exceeded upwards or downwards, whereby the first index figure outside the respective margin shall always form the basis both for the recalculation of the rent and for the calculation of the new margin. A waiver of the application of the value adjustment requires an express agreement.”

In the legal dispute, the opposing party argued that the agreed value adjustment clause is legally invalid, as it would be in contradiction to § 6 Abs 1 Z 4 and Z 5 KSchG.

However, the court clarified that a rent increase within the first two months after conclusion of the contract is legally excluded even in the event of hypothetical hyperinflation due to the provisions of § 16 Abs 19 sentence 2 MRG, which apply in the full scopeof application of the MRG.

In this case, the rent was not actually adjusted until more than two years after the contract was concluded. The court of first instance therefore ruled that the clause was legally valid and did not constitute a breach of § 6 Abs 2 Z 4 KSchG.

§ 6 Abs 1(5) KSchG is also not violated, as the most recently published index figure was expressly stated in the rental agreement at issue as the basis for the value adjustment, which created sufficient transparency. This rules out any unusual or grossly unfavourable treatment of the tenant, as the indication of the specific index figure provides clarity about the basis of calculation. There is therefore no violation of this provision.

The judgement is not yet legally binding, but nevertheless marks a significant stage victory and enriches the highly topical discussion about value protection clauses.

A big thank you to our dedicated team, who achieved this success with expertise, innovation and perseverance!

Authors: Mag. Victoria Dangl,
Matthias Rölz