Invalid clause

Billion-euro debacle with rental contracts

A Supreme Court ruling on the admissibility of index clauses has far-reaching implications.(Bild: Krone KREATIV/stock.adobe.com)

It could be one of the stumbling blocks of the new coalition and have far-reaching consequences: Hundreds of thousands of rental agreements contain an index clause that is illegal according to the Supreme Court. This could also render a number of retroactive increases null and void. In extreme cases, repayments of 15 to 20 billion euros would be at stake.

Index adjustments in contracts are nothing unusual, not even for residential rents. Some time ago, however, the Austrian Supreme Court (OGH) issued a landmark ruling: a long-established index clause that links the rent level to inflation or the development of construction costs, for example, is inadmissible. Put simply, this wording, which is frequently used by landlords, is sloppily formulated from the point of view of the Supreme Court. These shortcomings even mean that all price adjustments with this clause are inadmissible - even retroactively for 30 years. However, the Supreme Court's decision could have even more far-reaching consequences.