Rent in times of crisis - Changes due to the 4th COVID-19 Act
For tackling the COVID-19 crisis, the Austrian Parliament is approving a series of legislative changes. Following the adoption of the COVID-19 Act on 15 March 2020, the 2nd COVID-19 Act on 20/21 March 2020 and the 3rd COVID-19 Act on 4 April 2020, the National Council on 3 April 2020 and the Federal Council on 4 April 2020 have now also adopted several facilitations for tenants of apartments with the 4th COVID-19 Act. Please find below a compact summary of these measures, which among other things limits a landlord’s possibilities in case of rent arrears:
Restriction of termination or dissolution due to rent arrears
If a tenant is unable to pay a rent due between 1 April 2020 and 30 June 2020 (full or partially), the landlord is not entitled until 30 June 2022 to terminate or cancel the tenancy agreement solely on the basis of such arrears. The restriction only applies if the tenant’s economic capacity is significantly impaired as a result of the COVID-19 pandemic. The right to terminate or cancel the contract for other reasons remains unaffected. The temporary limitation of the possibilities of termination and cancellation only applies to residential leases, regardless of whether the lease is subject to the Tenancy Act (full or partial application).
Exclusion of the enforceability of rent arrears
Until 31 December 2020, landlords may not claim rent arrears in respect of the period 1 April 2020 to 30 June 2020 in court or cover them from a security deposit if the economic capacity of the tenant is significantly affected by the COVID 19 pandemic. This is an exclusively temporary postponement of the enforceability of rent arrears, but not a statutory postponement of the due date. For any arrears of payment, the statutory interest on arrears therefore begins to run from the due date of the respective monthly rent. The temporary exclusion of enforceability only applies to residential lease agreements.
Short-term extension of fixed-term residential rental contracts
Since the measures taken to contain the COVID 19 pandemic can considerably impair and complicate the search for housing, the legislator has extended the possibility of prolonging housing lease contracts. If fixed-term residential rental contracts expire between 1 April 2020 and 30 June 2020, they can be extended until 31 December 2020 or for a shorter period (contrary to the general legal situation within the full and partial applicability of the Tenancy Act which provides for a minimum prolongation period of 3 years). If the lease agreement is neither contractually extended nor terminated after the end of this extension period, it will be automatically extended by three years.
Statutory deferment of eviction
Due to the difficulty of finding accommodation, evictions are also to be postponed without the imposition of a security deposit if the accommodation is indispensable to satisfy the urgent housing needs of the tenant or of persons living with him/her in the same household. It is irrelevant for what reason the tenancy was dissolved. However, a deferment can only be requested if the eviction of the apartment is not indispensable to avert serious personal or economic disadvantages of the creditor (landlord). This will be assumed, for example, if the landlord (or his relatives) has urgent personal needs, the apartment has already been on-let or the landlord is dependent on continued rent payments. At the creditor's request, the execution proceedings must be continued as soon as the measures taken to prevent the spread of COVID-19, which restrict freedom of movement or interpersonal contact, have been lifted, or at the latest six months after the deferment has been granted. The procedure shall continue within three months of the authorisation of the deferment only if the above conditions are no longer fulfilled.
Please note: This newsletter merely provides general information and does not constitute legal advice of any kind from Binder Grösswang Rechtsanwälte GmbH. The newsletter cannot replace individual legal consultation. Binder Grösswang Rechtsanwälte GmbH assumes no liability whatsoever for the content and correctness of the newsletter.