Lease agreements and inflation: What to consider when agreeing indexation clauses

Currently, courts are intensely dealing with the interpretation of indexation clauses in lease agreements, including the Supreme Court of Justice. The courts are examining these clauses especially in light of section 6 para. 1 (5) of the Consumer Protection Act (KSchG) and also – unexpectedly for most – section 6 para. 2 (4) KSchG.

In particular, the following indexation clauses were under scrutiny:

• “The net rent of € […] shall be value-based on the Consumer Price Index 1976 published by the Austrian Central Statistical Office. If this index is not published, the index that most closely corresponds to it shall serve as the basis for value protection.”
• “It is agreed that the main rent referred to in section 3 shall remain stable in value in accordance with the value protection (revaluation) of the reference values provided for in section 5 RWG – based on the reference value applicable at the time of contract conclusion. If this value protection can no longer be applied, then the value protection shall be based on the Consumer Price Index 2015 published monthly by the Austrian Central Statistical Office or the index replacing it. The starting point for this value protection is the index figure published for the month of the last determination of the reference values. Adjustments are made immediately after the RWG is amended.”
• “If the main rent according to section 62 WWFSG 1989 in the version applicable at the time of completion of the building is or becomes lower than the highest permissible main rent for a category A apartment under section 16 para. 2 MRG, taking into account the value protection mentioned in section 16 para. 4 MRG, which is hereby agreed upon, then this highest permissible main rent shall be deemed agreed.”

As a result, indexation clauses can be particularly critical if

• a rent adjustment can occur within the first two months after the contract is signed;
• the value protection is linked to an insufficiently defined substitute index;
• the month used as the basis for the initial value of the value protection is before the month of the contract’s conclusion or the start of the lease.

As is often the case, the key lies in the precise drafting of the indexation clause. Our experts will be happy to assist you with this.

Disclaimer

This article is for general information only and does not replace legal advice. Haslinger / Nagele Rechtsanwälte GmbH assumes no liability for the content and correctness of this article.

 

8. May 2025

 

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