Austrian Supreme Court: Three Things Every Shopping Centre Owner Should Know About Service Charge Obligations

Key Takeaways

Austria's Supreme Court (OGH) has handed down a decision with immediate practical relevance for owners and operators of shopping centres in Austria. In OGH, 5 Ob 100/25d, 12 March 2026, the Court confirmed three points that directly affect how service charge obligations must be structured, documented, and enforced under Austrian law.

In brief: service charge reconciliation claims can be pursued for up to 30 years; reconciliation statements must be genuinely transparent; and standard-form clauses that broadly pass through maintenance costs to tenants are at significant risk of being struck down.

Background

The case involved tenants of a shopping centre who sought reconciliation of service charges covering the years 2005 to 2022, and asked the court to declare certain lease clauses void. The lease fell outside the full mandatory scope of Austria's Tenancy Act (MRG), which is typically the case in large-scale commercial leases in shopping centres.

The OGH dismissed the landlord's appeal as not raising a question of legal significance. Under Austrian procedural law, such a dismissal means the Court considers the legal position sufficiently clear that it does not require formal resolution — the lower court's judgment becomes final. While the decision is not a formal leading case, it authoritatively confirms the applicable principles.

1. Service Charge Reconciliation: The 30-Year Window

The OGH confirmed that a tenant's right to seek service charge reconciliation is subject to the general 30-year limitation period under Austrian civil law, not any shorter special period. The Court expressly rejected the landlord's argument that shorter limitation periods applicable in other statutory regimes — such as those under the Condominium Act (WEG) or the Tenancy Act itself — should apply by analogy.

For shopping centre owners, this means that reconciliation obligations for historical service charge periods are not extinguished after three years. Tenants can look back decades. The Court acknowledged that this creates practical difficulties for landlords who no longer hold documentation for older periods. Its answer: landlords should have kept the records in the first place. Where documentation has genuinely and without fault been lost, Austrian law provides a separate defence of supervening impossibility — but this is a narrow exception, not a general safety net.

2. Reconciliation Statements: Transparency Is Not Optional

The Court confirmed that a service charge statement must give tenants a genuine basis for verifying whether charges have been correctly applied. Statements that group costs under broad headings — the case involved labels such as "material costs and loss events", "maintenance and advertising installations", and "technical operations management" — were held to be inadequate because they did not identify what was actually being charged.

Beyond itemisation, the statement must show the allocation key used to apportion costs across tenants, and must separately identify any costs excluded from the shared pool before allocation is applied. Directing tenants to a final settlement account, rather than providing the relevant detail in the annual statement itself, does not meet the standard.

For owners operating multi-let centres with complex cost structures and management agreements, this is a meaningful compliance benchmark. Statements produced through property management systems should be reviewed against these requirements.

3. Maintenance Cost Pass-Through Clauses: Standard Forms Are at Risk

The most significant point for lease structuring concerns the validity of maintenance cost clauses. The lease in question contained a clause requiring tenants to bear all costs necessary for maintaining the shopping centre building, its car parks, traffic areas and green spaces, together with other costs connected with the centre's maintenance and management, costs arising from regulatory requirements, and further costs for improvements and installations considered necessary in the interest of the centre.

The OGH upheld the lower court's finding that this clause was void under § 879(3) of the Austrian Civil Code (ABGB), which prohibits terms in standard-form contracts that grossly disadvantage the other party. The clause was found to shift risks that under default Austrian law would rest with the landlord, without any adequate countervailing benefit to the tenant.

Two points in the Court's reasoning deserve particular attention. First, limiting the pass-through to costs that are "necessary" or "appropriate" does not constitute a meaningful restriction: maintenance and improvement measures are, almost by definition, either necessary or appropriate. The qualifying language provides no real protection. Second, the fact that costs are shared among multiple tenants according to an allocation key does not itself justify the broad pass-through. The Court explicitly stated that the economies of scale inherent in shopping centre infrastructure do not amount to an adequate consideration that would exceptionally justify a general transfer of maintenance obligations.

A further clause excluding interest on overpaid charges and deposits was also struck down, given the asymmetry with the landlord's own right to charge high default interest.

What This Means for Shopping Centre Owners and Asset Managers

This decision should prompt a review of three things across existing and future leases in Austria:

Lease templates: Maintenance cost clauses that broadly pass through all costs of maintaining common areas, the building envelope, technical systems, or regulatory compliance works are at material risk of being unenforceable under Austrian law. The fact that a clause has been in use for many years, or that other points were negotiated at signing, does not cure this problem. For a clause to be treated as individually negotiated — and thus outside the scope of § 879(3) ABGB scrutiny — the landlord must be able to demonstrate that the specific clause was genuinely open for discussion and that the tenant had a real opportunity to influence its content.

Service charge documentation: Annual reconciliation statements should be reviewed for compliance with the transparency standard confirmed by the Court. Broad cost categories, unexplained allocation keys, and references to external accounts without accompanying detail all carry litigation risk — potentially going back 30 years.

Historical exposure: For centres with long-established leases and older reconciliation statements, the 30-year limitation period means that tenants retain the right to demand reconciliation for periods that many landlords may consider closed. Where documentation is incomplete, legal advice on the scope of the impossibility defence should be sought before any claim is made or resisted.

About Sabadello Legal

Sabadello Legal advises landlords, property holders, developers, property managers and companies on tenancy law and real estate law. We assist with the drafting and review of lease agreements, the enforcement and defence of tenancy claims, and the legal assessment of complex service charge, maintenance and standard-form contract issues in the real estate sector.

Contact

RA Mag. Andreas Sabadello
Sabadello Legal
+43 1 353 21 20 0
office@sabadello.legal

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Disclaimer

This article is for general information purposes only. It does not constitute individual legal advice.