The law (so-called “Mietrechtsgesetz”) protects tenants in Vienna quite well but it can be tricky to make sense of it. If you rent a flat in Vienna you need to know the basics. That’s why we have condensed the thick book into a brief excerpt. You only need to know what TYPE of apartment you rent in Vienna.
Table of Contents
- The law that protects tenants and when renting a flat in Vienna
- Types of Rental Properties
- RENT REGULATION per MRG for different Types of apartments in Vienna
- METHODS OF SETTING RENTS for apartments in Vienna
- Rent increases for Vienna apartments during the lease term
The law that protects tenants and when renting a flat in Vienna
In 1981, Vienna passed the Austrian Tenancy Act (Mietrechtsgesetz, or MRG), augmenting the existing contract and consumer protection laws. The MRG tends to favor tenants’ rights, but these vary according to the type of premises and the contractual relationship between tenant and landlord.
THE MRG REGULATES:
- What amount of rent the landlord can charge;
- How the landlord can increase the rent;
- How long the lease terms may be;
- Whether leases may be open-ended;
- How the contract defines base rent and operating costs;
- And a host of other matters concerning the rights of both landlord and tenant.
In this section, we present an overview of the types of apartments as defined by the tenancy laws and what impact each has on the tenant’s rights. We must note that there are many exceptions to the rules and a mixed record of judicial decisions in settling landlord-tenant disputes. Therefore, you should seek professional advice (e.g., from a notary, lawyer or tenant advocate) before signing any real estate contracts.
Types of Rental Properties
Types of tenancy and accommodation (Mietwohnungen / Mietverhältnissen)
In “Types of Apartments“, we introduced you to the basic concept of Altbau (pre-1945) and Neubau (post-1945). Aside from distinguishing between the year of construction (and, more often than not, the architectural beauty) of an apartment house, the distinction carries certain legal implications, according to MRG, depending upon the type of tenancy.
TYPE I – Special apartments for rent in Vienna
(MRG does not apply if you rent a flat like this in Vienna)
The MRG does not protect the following types of rental agreements, therefore a landlord can terminate them at will. There is no cap on how much rent a landlord can charge (though you can challenge excessive usury) if you rent a Type I flat in Vienna.
- Detached or semi-detached houses (Ein- und Zweifamilienhäuser): a building containing no more than two units (not including a converted attic apartment) and only for leases originated after 2001;
- Company-provided housing (even if the company itself is not the landlord);
- Leases limited to six months or less;
- Holiday rental;
- Rental of accommodation in a hotel or pension;
- Institutional boarding houses, such as hostels, student dormitories, assisted-living facilities, retirement homes, and nursing homes;
- Rooms or apartments provided to the needy by charitable organizations.
For such Type I accommodations, the definition of “rent” and a tenant’s rights are only guaranteed if they are expressly stated in the rental agreement. The agreement should therefore explain whether the rent includes maintenance costs and applicable taxes.
TYPE II – A.K.A., “NEUBAU” – Top apartments for rent in Vienna
(MRG applies partially)
FOR THE FOLLOWING ACCOMMODATIONS:
- Privately owned neubau apartments (condos) in buildings erected after May 8, 1945;
- Attic apartments, converted or not (even if in Type III buildings);
- New construction licensed after 2001;
- Annex construction licensed after September 2006;
- New construction licensed after June 1953, but not financed with public funding.
Only certain elements of the MRG apply, such as:
- rights of family members;
- limits on the amount of security deposit held;
- limit of a lease period;
- and how the landlord or tenant can terminate a lease.
However, the MRG regulations applying to caps on rent and legally defining “rent” (Miete) and “operating costs” (Betriebskosten) do not apply; they must be specified in the rental agreement.
TYPE III – A.K.A., ALTBAU AND GEMEINDEBAU – Cost-efficient rental apartments in Vienna
(MRG in full force)
THE FULL MRG IS APPLICABLE TO THE FOLLOWING RENTAL PROPERTIES:
- Older buildings (Altbau), built before July 1953 that have more than two rental units;
- Privately owned apartments (condos) in buildings erected before May 9, 1945, (prewar era);
- Publicly financed or subsidized apartment house construction (Gemeindebau, geförderte Wohnung) with more than two rental units (even those built postwar).
- If the property can otherwise be classified as Type I or II (e.g., if it’s company-provided housing or a second/vacation home);
- Whether the landlord renovated the penthouse for rental in 2002 or later;
- The MRG handles most Co-ops (Genossenschaftswohnungen) as Type III properties in terms of MRG, but additional regulations (Wohnungsgemeinnützigkeitsgesetz or WGG) apply, as well);
- Parking space/garage under a separate lease agreement;
- Hobby room rental.
RENT REGULATION per MRG for different Types of apartments in Vienna
For Type I or Type II rentals, the MRG does not regulate how much a landlord may charge for rent. Landlords usually set their prices for these properties according to market conditions.
For Type III rentals, however, the MRG sets a cap on how much base rent can be charged per square meter and how operating costs are defined. However, since not all Type III apartments are alike, the rules are full of exceptions that confuse even lawyers. Caps are adjusted according to categories of apartment, and a host of other factors, including what improvements have been made and market demand.
METHODS OF SETTING RENTS for apartments in Vienna
FAIR-MARKET-VALUE RENT (ANGEMESSENER HAUPTMIETZINS)
This legal method for capping rents gives landlords more leeway to set rents according to the location, amenities and condition of the apartment, using comparable market values.
THIS ONLY APPLIES FOR:
- Neubau apartments;
- Officially landmarked buildings;
- “Luxury” Type III apartments larger than 130m2;
- Mixed-use apartments, if the business use outweighs the residential use;
- Short-term rent increase to cover improvements.
BENCHMARKED RENT (RICHTWERTMIETZINS)
If the conditions for fair-market value regulation do not apply, then the benchmarking method comes into play. The benchmarks (Richtwert) for Type III apartments are determined by the Ministry of Justice.
In Vienna, the standard benchmark is €5.58/m2 (set in April 2017). This standard rate can be adjusted upward or downward according to vaguely defined criteria. The landlord must compute the rent on some valid basis (often using appraisers), but needn’t explicitly itemize the methodology to a tenant unless challenged by a lawsuit or if a complaint is brought to arbitration.
The MRG defines the following criteria for surcharges or deductions of the standard benchmark rate:
- Orientation of the apartment (street-side, courtyard-side, story, layout of rooms);
- Amenities of the apartment that surpass the standards of other parts of the property (e.g., balconies, terraces, cellar or attic rooms, gardens, parking spaces);
- Nonstandard amenities and facilities in the building (hobby room, bicycle/stroller storage, sauna, pool, laundry room, elevator or parking garage);
- Individual heating system – installed by landlord;
- Unheated apartment buildings where apartments are normally heated;
- The exceptional location of the apartment house;
- Exceptional condition of the apartment house;
- Part of the apartment used for business purposes;
- Furnished Apartments (möbliert).
One of the most important deductions to the standard benchmark rate is applied if the duration of a lease agreement is limited (befristet). The landlord must deduct 25 percent from the base rent if the lease is not open-ended.
There are too many other criteria to list here. However, the City of Vienna provides a web-based calculator allowing you to estimate the benchmarked rent according to your specific conditions.
FAQs when renting overprized apartments in Vienna
If you believe you are being charged too much but your landlord doesn’t agree, you should seek counsel from a professional (tenant advocate, lawyer, notary) to determine if you have a legitimate (and cost-effective) case to bring to court or arbitration (Schlichtungsstelle).
Only substandard “Category D” accommodations are not subject to any of the other rate adjustment methods mentioned above. For any usable apartment without at least a water tap and toilet, the maximum rent permitted is €1.80/m2. For any other apartment that is considered unusable, the maximum rent permitted is €0.90/m2.
Rent increases for Vienna apartments during the lease term
A landlord is permitted to periodically raise the agreed upon base rent according to the consumer price index of inflation (Wertsicherung nach Verbraucherpreisindex). The rental agreement must state the basis and frequency of rate increases explicitly.
NOTE: For Type I and Type II apartments, the landlord may base a periodic increase on other factors, but these too must be explicitly stated in the lease.
For anything other than inflation-based rent increases, a landlord must obtain approval from an arbitration board or court to increase rent, typically in order to finance substantial repairs or improvements to the building. In such cases, the tenants can present their arguments for or against to the arbiter/judge.
The operating costs charged to the tenant may also be increased following the year-end accounting report (which each tenant should receive). The increase can be no more than 10 percent of the previous year’s actual expenses.