Are you a business owner looking to sign a lease for a commercial space ("Geschäftsraummiete"), a medical practice, or a storage area? There are several important considerations to keep in mind. In this article, we summarize some tips for commercial lease agreements in Austria. Please note that tenancy law is highly complex, and this blog article cannot replace comprehensive legal advice.

Preliminary Check: Is the MRG Applicable?

The critical point in concluding a commercial lease agreement in Austria is determining whether tenancy protection laws apply, particularly the Tenancy Act (MRG). If a commercial space as defined by the MRG, rather than just an open area or a building, is being rented and there are more than two leasable units in the building, then commercial leasing, not business leasing, applies. In detail, the conditions for the applicability of the MRG are complex and require prior legal examination.

The question of whether the MRG is applicable affects, among other things, the termination of the lease: under the MRG, the landlord can only terminate the lease for important reasons specified in the MRG, while outside the MRG, termination rules are more liberal. There are also differences regarding maintenance obligations. Furthermore, it matters whether the lease falls under the full or partial applicability of the MRG (depending on factors such as the year of construction of the building in which the rental object is located).

Fixed-term or Indefinite?

Deciding whether a lease should be fixed-term or indefinite is not just an economic decision; it also has legal implications. While a landlord can almost never terminate an indefinite MRG lease without an important reason as defined by the MRG, a long-term fixed lease has specific fee disadvantages:

Written commercial lease agreements in Austria are subject to a transaction fee of 1% of the assessment basis. For an indefinite lease, the recurring fee for three years is the assessment basis; for a fixed-term lease, the recurring fee for the term of the lease is the basis (e.g., for a duration of 10 years, the recurring fees for 10 years apply). If a fixed-term and indefinite lease are combined, the fees for the definite and indefinite durations are added together.

Clearly Define the Rent

The rent typically consists of a monthly flat net main rent, possibly an additional turnover-based net main rent, operating costs, and VAT. Generally, a flat net main rent is indexed, for example, according to the Consumer Price Index (CPI), while a turnover-based rent is stated as a percentage of the tenant's turnover. The conditions and calculation of indexation should be clearly defined in the lease agreement.

Regulate Alterations

If the tenant plans to make alterations to the rental property, this should be appropriately reflected in the lease agreement. The more concretely responsibilities, consent requirements, and structural changes are described, the better. It should also be clarified whether alterations need to be reversed when returning the property, whether compensation for investments is due, etc.

Notice Periods and Termination Dates

Commercial lease agreements in Austria can generally be terminated with three months' notice at the end of the quarter unless otherwise stipulated in the contract (Section 560 Abs 1 lit e ZPO). Often, different periods and dates are agreed upon in the lease. If the periods are very long, waivers of termination are required, or termination is only possible once a year, you must be aware that you are committing to a lease for a long time. If you do not want this, you should negotiate accordingly before signing the lease.

Additional tip for Non-German speakers

For international customers, we strongly advise requesting a bilingual contract to ensure full comprehension of all clauses. This will empower you to ask pertinent questions and assert any necessary modifications with confidence.

Do You Have Further Questions on Tenancy Law?

Do you need additional legal tips for commercial lease agreements. We can also draft a bilingual commerical lease contract, ensuring you understand all clauses. Should you seek advice in this or in other areas of tenancy and residential law? Please feel free to contact us at office@geuer.at or by phone at +43-1-4380072. We look forward to your inquiry.