In the course of the coronavirus pandemic, the question increasingly arose as to whether the tenants of a business premises had to pay the rent for this period despite official measures (entry bans). In its decision 3 Ob 78/21y of 17.11.2021, the Supreme Court has now ruled on the legal consequences of pandemic-related entry bans in tenancy law and confirmed that the rent is not payable under the circumstances described in more detail below, even if there is a court settlement on the payment obligation.

In the present case, the defendant is the owner of a house in which there is a business premises. The plaintiff is the tenant of this property. The tenancy is subject to the MRG. The agreed purposes of use are “tanning salon and related activities including typical ancillary areas (…)”.

Based on a court settlement dated January 2020, the tenant was obliged to pay the agreed rent plus operating and heating costs by the tenth of each month and, in the event of even partial default of payment in the period from February 2020 to February 2021, to vacate the property within one month of default of payment, waiving any stay of eviction. Following the announcement of the official measures in connection with the COVID-19 pandemic, the plaintiff switched off the heating and electricity and all appliances in the business premises in mid-March 2020; she subsequently complied with the exit restrictions and was not in the business premises in April 2020. For April 2020, the plaintiff paid neither rent nor operating or heating costs. The defendant then applied for execution to vacate the business premises.

On May 18, 2020, the court of first instance granted the execution for eviction based solely on outstanding rent and operating costs for April 2020.

The plaintiff then sought a declaration that she was fully exempt from paying rent in the period from April 1 to April 30, 2020 and that “in this respect the eviction settlement was invalid”.

In summary, the defendant argued that the plaintiff had not responded to the approval of the eviction execution; due to the settlement to which the plaintiff committed itself in January 2020, there was an “abstract eviction obligation”.

The court of first instance upheld the claim and stated that unusability of the property due to an officially ordered prohibition was such a prohibition within the meaning of Section 1104 ABGB. The plaintiff was therefore not in default with the rent for April 2020 and the execution was not admissible for this reason.

The Court of Appeal did not uphold the defendant’s appeal and confirmed the decision of the court of first instance.

In the decision on the defendant’s appeal, the Supreme Court now stated that in the relevant period from April 1 to 30, 2020, the plaintiff’s business premises were subject to an unrestricted official ban on entering its customer area because this was not subsumed under any exception in the relevant ordinance.

The predominant view in the literature, according to which the COVID-19 pandemic with the resulting ban on entering the premises can in principle constitute a case of application of Section 1104 ABGB, has convincing arguments for itself in the opinion of the recognizing Senate. The elementary events expressly mentioned in Section 1104 ABGB (among others) include the “epidemic”, the definition of which undoubtedly applies to COVID-19. The ban on entry, which applied to the property in question due to the closure order, meant that the business premises “could not be used or used at all” during this period. This fulfills the criteria of Section 1104 ABGB and also corresponds to the understanding of Section 1104 ABGB previously advocated by case law, according to which sovereign interventions resulting from natural disasters can also be relevant. The direct legal consequence of § 1104 ABGB is that “no rent or lease is to be paid”.

Legal questions that could arise from an at least partial use of the existing property did not arise because the restricted use, for example for administrative activities or for storage purposes, was out of the question in the specific case.

This result of a “waiver of interest”, which follows directly from the law, is occasionally countered in the literature that“§ 1104 ABGB (…) is incomplete insofar as it does not take into account the case that the extraordinary events regulated there exceptionally do not interfere with the physical substance of the existing property, and that the landlord has no possibility of terminating indefinite relationships without a reason in accordance with § 30 MRG since the tenant protection came into existence”

In the opinion of the Supreme Court, this view cannot be followed because Section 1104 ABGB does take into account the case that the natural event does not affect the physical substance of the existing property and even expressly mentions it as an example of application, as the epidemic mentioned by name does not typically affect the substance of the existing property. § Section 1104 ABGB is also not incomplete with regard to the legal consequence of “a waiver of interest”, but is unmistakably clear.

The question of whether the tenant could be obliged to pay operating costs despite the applicability of Section 1104 ABGB, which has been answered differently in the literature, was not addressed further by the Supreme Court because in this case all appliances, electricity and heating had already been switched off. Furthermore, only heating and operating cost accounts were titled in the settlement, and the defendant did not base his application for execution on a resulting delay in payment.

As a result, the eviction execution based solely on the failure to pay the rent for April 2020 proves to be inadmissible because the necessary default in payment did not exist at the time of approval.

Source: OGH 3 Ob 78/21y