Rent Reduction in Commercial Leases: No Frozen Circumstances

6 Ob 118/25h, decision of 13 Aug 2025

Summary

Austria’s Supreme Court (OGH) reaffirmed that a landlord’s duty is to provide ordinary (average) usability for the agreed purpose; the landlord does not guarantee that all circumstances existing at lease inception will remain unchanged. A later ordinary development on a neighbouring plot - even if less convenient for the tenant - does not, by itself, trigger rent reduction where the premises remain ordinarily usable for the contracted purpose. The tenant’s claim to reclaim paid rent due to decreased usabilty of the lease property failed.

Background

The tenant has operated a scrap-metal business on the leased site since 1981/82 under a contract allowing use “for commercial purposes”. No promises about neighbouring land, operating hours, business type or structure were made in the lease contract. In late 2022, the landlord’s adjacent property was built up with a residential project. The business could still be conducted on the leased site, though with lower capacity and higher logistics effort; there were no limits on opening hours or deliveries. Both lower courts dismissed the claim.

The Decision

The OGH rejected the tenant's extraordinary appeal. Key points:

• § 1096(1) ABGB – “Brauchbarkeit” (usability): Absent different agreement, the landlord owes ordinary (average) usability measured against the contractual purpose and common practice. Whether that threshold is met is a case-by-case assessment.
• No guarantee of static surroundings: A tenant may require freedom from material disturbance in the agreed use, but not preservation of all circumstances as they stood at contract signing.
• Neighbouring development ≠ automatic rent reduction: Ordinary urban development of a neighbouring plot does not per se justify a reduction, even if the former undeveloped state benefited the tenant.
• Still ordinarily usable here: The site remained fit for the scrap-metal business; no essential curtailment of the operation was required. Issues around the landlord’s protective/care duties were not decisive for assessing a rent-reduction claim.

Key takeaways for landlords

1. Contract purpose rules: If your lease states a broad purpose (e.g., “for commercial purposes”), you typically owe ordinary usability, not a tailor-made operating environment.
2. No “environment freeze” duty: You are not a guarantor that the neighbourhood or site surroundings will remain as at lease start.
3. Urban development is expected: Ordinary construction on neighbouring plots generally doesn’t trigger rent reduction where ordinary usability persists.

Official Austrian Supreme Court decision (PDF, Austrian Legal Information System – RIS)

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