Austria: Success before the Austrian Supreme Court: Leasing in the context of the operation of the Salzburg Fortress Railway does not fall under the Tenancy Act

 

The Tenancy Act (MRG) regulates the legal relationship between landlord and tenant, whereby the legal position of the tenant is given special protection in many aspects. Thus, within the scope of application of the MRG, the tenancy can only be terminated by the landlord for certain reasons and as a rule a special court proceeding must be conducted. In addition, fixed-term tenancies are subject to strict formal requirements under the MRG.

However, not all tenancies are covered by this mandatory law in favour of the tenant. Excluded are, for example, rental objects that are rented out as part of the operation of a transport company.

This was precisely the subject of a legal dispute in which Zumtobel Kronberger Rechtsanwälte OG successfully represented the landlady. The latter is the operator and owner of the funicular railway to the Salzburg Festungsberg and had rented out the sales room in the valley station to operate an exhibition and a souvenir shop. The tenant brought an action for a declaration that the Tenancy Act was applicable in the present case and that there was therefore a contract of indefinite duration because the lease had not taken place in the context of the operation of a transport company.

The tenant’s claim was dismissed by the first two court instances and this was finally confirmed by the Supreme Court (OGH) (OGH 3.8.2023, 8 Ob 48/23a).

The tenant had previously argued that the funicular was only used for tourist purposes, so that an exception to the scope of the MRG was not justified.

However, the Supreme Court confirmed the legal opinion of the landlady, according to which the lease was made in the context of the operation of a transport company (namely the fortress railway), so that the lease was not subject to the MRG and was effectively limited in time.

Precisely because, according to the tenant, the funicular to the fortress hill is mainly used by tourists, the possibility of visiting the tenant’s exhibition and the souvenir shop at the valley station increases the attractiveness of the landlady’s transport offer. The availability of public toilets also serves the needs of the defendant’s passengers. The close connection to the operation of the funicular railway is shown not least by the fact that the tenant has undertaken to cover the personnel costs of a wagon driver and the lessor to sell tickets for the tenant’s exhibition and vouchers for the souvenir shop.

Thus, in the opinion of the Supreme Court, a cable car company operated primarily for tourism purposes also falls under the exception to the MRG mentioned above. Also, it does not matter whether it is a public or private transport company.

 

For further information, please contact:

Johannes Paul, Partner

Zumtobel Kronberger Rechtsanwälte OG, Salzburg

e: paul@eulaw.at

t: +43 662 624500

 

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