Current decision strengthens tenants' rights: Value adjustment clause can be entirely void
Two real estate companies had applied to repeal a central protective provision of the Consumer Protection Act (KSchG). The Constitutional Court dismissed this application as unfounded – with significant impacts on tenancy agreements in Austria.
What does Section 6, Paragraph 2, Item 4 of the Consumer Protection Act (KSchG) say?
The rule is:
Price indexation clauses are invalid if they concern services that are to be provided within two months of the conclusion of the contract, unless the business proves that the clause was individually negotiated with the consumer.
Since the 2023 Supreme Court jurisprudence, it is clear:
This protective provision also applies to lease agreements—even though these are continuous obligations.
So anyone who wants to increase the rent in the first two months must negotiate this actively and individually with the tenant. If this does not happen, the entire value maintenance clause in the rental agreement is invalid – even beyond the first two months.
Constitutional Court: No violation of landlords' right to property
Although the VfGH acknowledges that § 6 para. 2 no. 4 KSchG interferes with the landlord's right to property.
But:
- The intervention is legitimate,
- serve consumer protection,
- and be proportionate.
A landlord can generally estimate price trends within two months – and the tenant's interest in not being confronted with sudden increases is to be rated higher.
The legal consequence—that the entire value-adjustment clause is void if it has been improperly drafted—is also constitutionally permissible.
What does that mean for tenants?
If you have accepted a rent increase based on a value maintenance clause without it having been explicitly negotiated with you, it could be legally invalid.
The consequence: You may have paid too much rent – and can claim it back.
Our law firm actively supports tenants in,
- to review the lease agreement legally,
- to establish the invalidity of the value-maintenance clause,
- and to recover excessive rent payments.
For further information and a free initial review of your rental agreement, please feel free Anela Blöch and your team at any time at office@atb.law or by phone at 01 39 12345 available.
