For many renters, the apartment is a home with an expiration date, because the rental contract is in most cases limited, once again criticizing rental law, said the Chamber of Labor (AK) in a release on Wednesday. With 440,000 contracts, around half of the existing rental agreements are time-limited, the average contract term is four years, the AK stated. In the case of new rental contracts, three out of four rental contracts in Austria are limited.
Limited contracts make housing more expensive and deprive tenants of their rights, says Thomas Ritt, head of the AK Department of Municipal Policy and Housing. “The regular rent increases at contract renewals are a real price driver,” said Ritt. “Anyone who asserts their rights risks standing on the street after the contract ends.”
Expensive extension
But tenants not only have to worry whether the contract will be extended – but also under which conditions. With limited rental contracts, they pay in private old residential buildings over 160 million euros annually too much, calculated the AK. On average, landlords charge their tenants about 30 percent too much – around 1,700 euros per year. The legal discount of 25 percent for limited rental contracts in the regulated old-building segment is often not deducted. On the contrary: limited rental contracts are on average 160 euros more expensive than unlimited ones, the AK further noted.
Instead of the legal rent discount, according to the AK, surcharges of 50 to 200 percent of the reference value are applied. For example, a location surcharge is charged because the municipality has invested in public transport or, for instance, in climate protection measures, criticizes Ritt. In addition, there are no longer restrictions for chain rental contracts. And there is also no legal regulation of when landlords must inform tenants about a contract extension or the expiration of the contract.
Rent caps
Therefore, the Chamber of Labor is pushing for a new rental law that provides clear upper limits for private rents as well as capped surcharges. In addition, it calls for an end to limited contracts. However, exceptions should be made for private individuals. They should be able to rent out apartments until the apartment is needed again. Rents should be allowed to rise by a maximum of 2 percent annually. And landlords should be held accountable with heavy fines for rent gouging.
The Austrian Association of House and Land Owners (ÖHGB) naturally sees the matter differently: the proportion of limited rental agreements remains relatively stable, said ÖHGB President Martin Prunbauer. The rental law restricts the possibilities to part ways with a tenant. “Without limitation and with the continuation of entry rights, an apartment is in practice given out of hand over generations,” Prunbauer cautioned.
The ÖHGB also advocates for limited contracts in municipal housing, as is the case in Vorarlberg. This would increase social targeting. And FPÖ city councilor Dominik Nepp points to Wiener Wohnen as provider of Vienna’s municipal housing. Here there is a renovation backlog amounting to 10 billion euros, Nepp said in a release.
