AUSTRIA Law and Practice Contributed by: Christoph Urbanek, Irena Gogl-Hassanin and Mario Schiavon, Urbanek Law
Survival Period of Representations and Warranties The statutory warranty period in Austria is gener - ally three years. However, it is common for par - ties to contractually limit this period to between 12 and 18 months. Exceptions often apply for fraud, tax, environmental issues and title warran - ties, which may have extended survival periods. Liability Caps Liability caps are standard in Austrian real estate transactions, with typical ranges as follows: • title and tax warranties – up to 100% of the purchase price; and • other warranties – between 5% and 35% of the purchase price. These caps are often accompanied by de mini - mis thresholds and basket provisions to prevent minor claims. Use of Representation and Warranty Insurance Representation and warranty insurance (R&W insurance) is gaining traction in Austria. The increasing competition among insurers has led to more favourable terms for policyholders, with fewer exclusions and the possibility of specific disclosures for an additional premium. In summary, while statutory provisions offer a baseline, the specifics of representations, war - ranties, and associated liabilities in Vienna’s commercial real estate transactions are pre - dominantly governed by contractual agreements tailored to the particulars of each deal.
• litigation status – stating the absence of ongoing legal disputes affecting the property; and • environmental conditions – addressing envi - ronmental issues, such as soil contamination or hazardous materials like asbestos. These warranties are designed to share the risk of unknown circumstances between the parties. Statutory Seller’s Warranties While Austrian law does not impose a general duty of disclosure on sellers, withholding criti - cal information can lead to liability for fraudulent intent. Sellers are typically liable for misrepre - sentation if false statements induce the buyer into the contract, resulting in loss. Buyer’s Remedies for Misrepresentation If a seller breaches representations or warran - ties, buyers in Austria typically have the following remedies: • compensation – claiming damages for losses incurred due to the breach; and • contract rescission – in cases of significant misrepresentation, seeking to annul the con - tract. To enforce these remedies, buyers may negoti - ate security measures such as: • holdbacks – retaining a portion of the pur - chase price; • escrow accounts – placing funds in escrow until obligations are fulfilled; • bank guarantees – securing guarantees to cover potential claims; and • parent company comfort letters – obtaining assurances from the seller’s parent company.
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