In the Supreme Court’s decision of 15.12.2015 on 4 Ob 180/15x, the Supreme Court denied a claim for eviction by the registered owner against the buyers and former tenants who initially occupied the apartment in question as tenants and then occupied the apartment after the expiry of the fixed-term tenancy agreement with reference to the purchase agreement – without having paid the purchase price to date. However, the sellers were also not prepared to fulfill their obligations. Only the party in breach of contract is entitled to withdraw from the contract in accordance with Section 918 ABGB.

The plaintiffs, book owners of the property in question, to which residential property is connected, rented the apartment to the defendants from October 1, 2009 – for a limited period of 5 years.

In May 2011, the plaintiffs negotiated the sale of the apartment with the defendants. In July 2011, the plaintiffs offered the defendants – by email – to purchase the apartment for the price of EUR 775,000. The defendants accepted the offer one day later. The defendants then drew up a written draft contract, but the plaintiffs refused to sign it, stating that the plaintiffs’ son needed the apartment and that the plaintiffs were therefore refraining from selling it.

In a gift agreement dated 26/30 September 2011, the plaintiffs donated the property shares in question to their son. His right of ownership was registered on the basis of an application received by the competent land registry court on 11.10.2011.

In May 2014, the plaintiffs were obliged – by the final judgment of the Vienna Higher Regional Court – to agree to the unencumbered incorporation of the defendant’s ownership rights step by step in return for payment of EUR 775,000.

In October 2014, the plaintiffs filed an action for eviction against the defendants, as the tenancy had expired in September 2014 and the defendants were therefore using the apartment without title. The purchase price had neither been paid nor offered by the defendants, which is why the handover was not deemed to have been completed in accordance with the unsigned draft contract.

The defendants referred to the purchase agreement concluded in July 2011, which was legally established by the judgment of the Vienna Higher Regional Court. Thus, they have been using the apartment since the conclusion of the purchase agreement under the title of the purchase agreement and therefore not without title.

The Supreme Court commented on this as follows:

In the case of an action for eviction against a titled owner, the owner asserts a claim for restitution in accordance with Section 366 ABGB. In such cases, the defendant property owner can object to his right to possession. This right extends to both rights in rem and mandatory rights.

“The buyer is entitled to compulsory ownership of the property, which is why the buyer holding the property can object to the vindication of the seller, who still appears in the land register as the owner, on the basis of the right to possession.” The seller’s right of ownership is limited by the obligatory commitment to the buyer.

“Since the claim for eviction can also be countered by the obligatory right of the holding buyer to transfer ownership, it is therefore not important for the defense of the right to possession (or the right to possession) whether a transfer to be assessed according to property law criteria has already taken place.” In principle, the buyer is also entitled to the defense if he has come into possession of the object of purchase by his own authority without handover. The non-payment or non-payment of the purchase price does not prevent the buyer from being entitled to compulsory ownership of the property.

A contractual partner can only invoke the right to refuse performance if he himself was or is prepared to perform. In this case, the seller wanted to withdraw from the contract and therefore cannot invoke the right to refuse performance. In this specific case, the buyer is entitled to withhold the performance to be rendered in accordance with §1052 ABGB.

Conclusion: The condominium owner’s eviction claim against the purchasing tenant fails simply because the purchasing tenant in possession has a mandatory right to possession of the property. When submitting (verbal or written) offers to sell/purchase, it should always be noted that a valid purchase agreement is already concluded when there is agreement on the “essentialia negotii”, i.e. when there is agreement on the object of purchase and the purchase price. Whether or not a draft purchase agreement drawn up thereafter is signed, possibly with extensive additional provisions, is not decisive for the effective existence of a purchase agreement.