AUSTRIA Law and Practice Contributed by: Christoph Urbanek, Irena Gogl-Hassanin and Mario Schiavon, Urbanek Law
6.17 Right to Occupy After Termination or Expiry of a Lease A tenant has no automatic right to remain in a commercial property after the lease ends, unless the contract includes renewal options or legal provisions apply. Under the Tenancy Act (MRG), which may partially apply to commercial leases, tenants are protected from termination except under specific conditions. However, if the lease is for a fixed term, it ends automatically, and the tenant must vacate. If the tenant stays and the landlord does not object, an implied lease may arise. To avoid this, the landlord should notify the tenant in writing and take legal action if needed. Clear return terms and proactive communication are essential. 6.18 Right to Assign a Leasehold Interest A tenant may only assign their rights of posses - sion to third parties or sublet the property (in whole or in part) with the consent of the landlord, unless otherwise stipulated in the lease. In many commercial leases, assignment or subletting is expressly subject to the prior written consent of the landlord, although the landlord may not arbi - trarily withhold consent if there are no legitimate interests against it. Typical conditions include: • the economic and legal standing of the new tenant; • the contractual conformity of the use; and, often, • an obligation for the main tenant to continue to be liable (eg, by way of surety or joint and several liability). Without consent, a transfer of the lease is gen - erally invalid and may even be grounds for ter - mination.
changes without consent can constitute grounds for termination or lead to claims for damages. 6.15 Specific Regulations Different legal rules apply to various real estate types in Austria, such as residential, office, retail, industrial and hotel properties. Residential leases are often governed by the Austrian Rent Control Act (MRG), which offers strong tenant protections, including rent caps and termina - tion restrictions. In contrast, commercial leases – covering offices, retail and industrial spaces – are typically less regulated or exempt from the MRG, allowing greater contractual freedom. Hotels may fall under commercial or specific accommodation laws, depending on their use. During the COVID-19 pandemic, temporary legal measures granted rent reductions during man - datory closures, especially in retail and hospital - ity. Although these measures have largely ended, they have increased the focus on including crisis clauses in lease agreements. 6.16 Effect of the Tenant’s Insolvency Under Austrian insolvency law, a tenant’s insol - vency does not automatically terminate the lease. The insolvency administrator may choose to continue or terminate the lease, observing statutory notice periods. From the opening of insolvency proceedings, the landlord can only pursue claims within the insolvency process. Unpaid rent from before the proceedings counts as an insolvency claim and must be filed accord - ingly. Rent due after proceedings begin is con - sidered a priority claim. The landlord cannot terminate the lease solely due to pre-insolvency rent arrears. Any termination is subject to protec - tive rules favouring the administrator, especially if continuing the lease benefits the insolvency estate.
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