Apart from the rent reduction, the lessee may also have the right to terminate the lease in accordance with Sec. 1117 ABGB due to total or partial uselessness of the existing property as a result of an “extraordinary coincidence”. However, it is set out in Sec. 1117 ABGB that the property must be unusable for a longer period. Although there is - as far as can be seen - no case law that specifically deals with the definition of a “longer period of time” in the sense of Sec. 1117 ABGB, in most cases, the unusability of the respective property is likely to have lasted longer than in the present case (for now). For this reason, we would (still) rather rule out a claim to terminate a lease on the basis of Sec. 1117 ABGB at the present time; however, this may change in the case of longer periods of unitability.
Instead, in case of unforeseen events, claims for termination of lease agreements might also be based on the legal principle of “frustration of contract”, which is based on an analogy of various provisions of the ABGB (Sec. 901, 936, 1052, 1170 a para 2 ABGB). According to case law, such an unforeseeable event exists, for example, if the economic development of an existing property is disappointing (i.e., if an existing property use does not generate anticipated income). However, the principle of “frustration of contract” is generally only subsidiarily applicable to the above provisions for claims for both rent reductions and termination of contract. Accordingly, the Austrian Supreme Court (OGH) has already excluded the application of this legal principle for the termination of lease agreements in case Sec. 1117 ABGB applies. Since we consider the application of Sec. 1117 ABGB – at least currently due to the term of the restrictions - to be rather unlikely, it might be possible to base claims for termination on “frustration of contract”. However, as there is no case law on rent reductions due to “frustration of contract”, it cannot be predicted with certainty whether such claims will be successful or not.
In case the lessee suspends payment of the rent in whole or in part, the lessor is entitled to terminate the rent or lease agreement and file an action for rent and eviction in case the rent reduction claim is not admissible. Thus, it is advisable for lessees to pay the rent only under reservation, otherwise an unconditional further payment can be considered as waiver of a rent reduction.
Further, it should be noted that § 1104 ABGB is non-mandatory and can therefore be waived or regulated differently by the contracting parties. Before rent payments are suspended too hastily, it is therefore advisable to check whether and how cases of impossibility of use of the existing property have been regulated in the specific rental or lease agreement.