法律研究

Cost estimate exceeded: Unperformed work is not deducted

OGH 6 Ob 90/26t | 29.09.2026

Where a cost estimate is provided without a guarantee, the client must accept unavoidable, minor additional costs. The contractor must notify the client in good time of substantial cost overruns under Section 1170a para 2 of the Austrian General Civil Code. If timely notification is not given, the client may withdraw from the contract under certain conditions.

The Austrian Supreme Court (OGH) has now clarified how a cost overrun must be calculated. Work that was not performed must not be deducted from the original quoted amount. Such a deduction would benefit the client. It would reduce the amount used for comparison, making the cost overrun appear larger.

In the specific case, the original quoted amount for a shell construction was EUR 197,551.09. The actual costs amounted to EUR 213,346.15. This represented a cost overrun of approximately 8%. The OGH found that this overrun was not substantial. In earlier decisions, cost overruns of 14% and 30% had been considered substantial.

For clients, this means that the significance of a cost overrun is assessed based on the original quoted amount. Work that was not performed does not change this basis of calculation.

Sale cancelled: Without withdrawal, the broker’s commission may become due

OGH 1 Ob 69/26t | 27.08.2026

Under an exclusive brokerage agreement, the seller of a property agrees not to appoint another broker. The agreement may provide that anyone who terminates it early without good cause must pay the full commission under Sections 15 paras 1 and 2 of the Austrian Real Estate Agents Act. As a rule, consumers may withdraw within 14 days if they sign the agreement outside the broker’s business premises under Section 11 para 1 of the Austrian Long-Distance and Foreign Business Act.

In the specific case, a retired farmer signed an exclusive brokerage agreement for his farmland on his property. Twelve days later, he cancelled the agreement verbally. He intended to transfer the farmland to his daughter instead. The broker subsequently claimed the agreed commission of EUR 55,050.84. The Austrian Supreme Court ruled that a purely private change of mind does not constitute good cause. However, the cancellation qualified as a timely withdrawal by a consumer. No reason was required for this withdrawal. The broker’s claim for the commission was therefore unsuccessful.

Nevertheless, an exclusive brokerage agreement should only be signed by anyone who is certain they want to sell. A change of mind can be costly – potentially up to the full commission.

Rent arrears: When does it become serious for tenants?

OGH | 9 Ob 56/26i | 31.07.2026

A tenant repeatedly fell behind on rent and operating costs. The landlord issued reminders for the outstanding amounts and granted a reasonable additional period for payment each time. Nevertheless, part of the arrears remained unpaid after each deadline. The arrears were only paid in full after the additional period had expired. The landlord nevertheless maintained her claim for eviction.

The Austrian Supreme Court (OGH) clarified when so-called “qualified” rent arrears exist. In particular, the rent must be due and the tenant must have received a proper reminder. The reminder must grant a reasonable additional period for payment. What matters is whether any amount remains outstanding after this period. If so, “qualified” rent arrears exist. Operating costs also form part of the rent payable under the lease. Such arrears may also arise during eviction proceedings under Section 1118 second case of the Austrian General Civil Code.

A subsequent payment in full does not automatically eliminate the landlord’s claim for eviction. The tenant may rely on a statutory protection. To do so, the tenant must fully settle the arrears before the hearing is concluded. In addition, the tenant must not have acted with gross fault. This issue had not been sufficiently clarified in the specific case. The Austrian Supreme Court therefore set aside the decisions under Sections 33 paras 2 and 3 of the Austrian Tenancy Act.

Legal fees in a financing round – When does the GmbH pay, and when does it not?

OGH 2 Ob 12/26t | 19.05.2026

A start-up limited liability company (GmbH) engaged a lawyer to revise its articles of association and a shareholders’ agreement. The background was an urgent financing round. An investor made its investment conditional on revising the existing agreements. The GmbH therefore covered the legal costs. When the GmbH failed to pay the lawyer’s invoice in full, the lawyer sued for the outstanding amount. The GmbH argued that making the payment constituted a prohibited return of capital. This would amount to an unlawful transfer of the company’s assets to its shareholders.

The Austrian Supreme Court (OGH) rejected this argument. A prohibited return of capital contributions only occurs when a company transfers assets without receiving equivalent consideration. In this case, the GmbH had a vital interest in successfully completing the financing round. The investor’s participation would provide the GmbH with fresh capital and secure its economic survival. The legal fees were therefore justified as business expenses and had to be borne by the GmbH.

In practice, the GmbH may bear financing-round costs, including legal fees, when the fresh capital benefits the GmbH itself. The situation is different when the company merely finances the acquisition of shares by a new shareholder without benefiting itself.

Red-White-Red Card Plus Not Sufficient: No Advance on Maintenance Without Long-Term Residence Status

OGH | 10 Ob 63/26a | 30.06.2026

The Austrian Supreme Court (OGH) had to determine whether a Serbian minor was entitled to an advance on maintenance payments (Unterhaltsvorschuss). He held the temporary residence title “Red-White-Red Card Plus”. His mother, however, held the residence title “Permanent residence – EU”. The father was legally obliged to pay maintenance. The minor therefore applied to the Federal Government for an advance on maintenance payments. He argued that he already met the requirements for “Permanent residence – EU”. However, this status had not yet been granted to him.

The Austrian Supreme Court clarified that merely meeting the requirements is not sufficient. Long-term residents must be treated equally to Austrian citizens under Article 11 of the Long-Term Residents Directive. An advance on maintenance payments constitutes a core benefit for this purpose. Equal treatment, however, requires that long-term resident status has actually been granted.

The “Red-White-Red Card Plus” only provides a temporary right of residence. The mother’s residence title also does not grant the child an independent entitlement. The minor was therefore not entitled to an advance on maintenance payments under Section 2 para 1 of the Austrian Advance on Maintenance Payments Act. The Austrian Supreme Court upheld the Federal Government’s appeal and rejected the minor’s application for an advance on maintenance payments.