Facility Management
Exemptions from benchmark rents
According to the Austrian Tenancy Act (“Mietrechtsgesetz”), benchmark rents apply to all properties built before 1945. That may be true, but there are (several) exceptions to this rule.
The benchmark system forms the basis for the full application of the Austrian Tenancy Act, which applies to all properties built before 1945. But in contrast to the prevailing opinion that these rules are set in stone, there are a number of exemp- tions. A review by the facility manager can identify potential ways to avoid the benchmark application and to rent the entire property or individual apart- ments at an appropriate rate. The most important cases in practice are: l Building sections added after 1945: This exception from benchmark rents is well known and normally covers developed lofts and subsequently erected top floors. l No or only minimal apartment use: If an apartment is used entirely or primarily as an office, business premises or medical practice. l More recent building permits: Also applicable to older buildings which required new cons- truction after 8 May 1945 (usually as a result of bomb damage). l Historic preservation: If a building falls under historic preservation regulations and the owner has invested “significant” equity in its conservation after 8 May 1945. l Usable space over 130 sqm: Category A or B apartments with over 130 sqm of usable space in cases where the renter has not re-let within six months after vacancy to a person who is legally entitled to enter into the lease. Impro- vement project extend this period to one year.
Under other circumstances, rents may also be defined without restrictions (full exemption from the Austrian Tenancy Act): l Hotel, garage and logistics: Rental in connec- tion with the operation of a hotel, garage, trans- port, forwarding company or warehouse. l Business premises leased on a temporary basis up to six months. l Secondary residences: Category A or B apart- ments can be let as secondary residences at freely established rents for up to six months in connection with job-related relocation. Typical cases are student transfers for individual se- mesters or limited job-related stayovers in a city. l Vacation apartments: Sometimes slightly tricky, but when the tenant has a different primary residence and does not work in Vienna, the owner is on the (relatively) safe side. l Small investment properties: Buildings with no more than two independent apartments or business units (apartments in later loft exten- sions are not counted). One important note: The exemptions from the full application of the Austrian Tenancy Act are legally complex, and expert legal advising is absolutely essential.
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