If two natural persons jointly acquire an apartment that is inseparably linked to condominium ownership, this constitutes an owner partnership in accordance with the Austrian Condominium Act 2002 (WEG 2002). The partners must each own half (equal shares) of the condominium property.

In principle, Section 13 WEG 2002 stipulates that the partners’ residential property may only be restricted, encumbered or subjected to execution jointly. It is therefore not legally possible to encumber the partners’ residential property differently.

When purchasing a condominium property for rental purposes, spouses often express the wish to grant a usufructuary right to the apartment in favor of one of the partners.

In this context, it is important for contract judges to be aware of the following two Supreme Court decisions:

In the decision of the Supreme Court of 07.10.2003 on 5 Ob 200/03b, the recognizing senate ruled that the incorporation of a reciprocal usufructuary right for each individual condominium partner to half of the other’s minimum share would fail under § 13 para. 3 WEG 2002 because this would result in different encumbrances on the minimum shares.

However, the groundbreaking decision of the Supreme Court of 25.08.2016 on 5 Ob 149/16x approved the incorporation of a usufructuary right for each owner partner to the entire minimum share. This does not lead to a different encumbrance of the shares and therefore does not contradict Section 13 WEG 2002. The Senate already affirmed the fundamental permissibility of such an encumbrance in its decision on 5 Ob 157/08m.

This relevant case law is of essential importance for the entry of the usufructuary right in the land register in the case of an existing owner partnership. Therefore, when drafting contracts, attention must be paid to the correct wording when granting the usufructuary right in the case of an existing owner partnership. It is also helpful to include a reference to the case law of the Supreme Court mentioned above.