Criticism of Fixed-Term Contracts: AK Demands Tenancy Law Reform

According to the Chamber of Labour (AK), temporary rental agreements are not only the norm but also a growing problem for tenants in Austria. In a statement on Wednesday, the AK criticized that around 440,000 rental contracts are temporary; in the private segment, half of the 807,000 existing rental agreements are time-limited, with an average contract duration of four years. For new rental contracts, three out of four are temporary.

Temporary Contracts Significantly Increase Housing Costs

The AK warns of significant additional costs for tenants. Thomas Ritt, head of the AK department for municipal policy and housing, explains: "The regular rent increases upon contract renewals are a real price driver." Those who assert their rights risk the end of their tenancy. Additionally, it is often unclear whether and under what conditions an extension is possible.

According to AK calculations, tenants in private old buildings pay over 160 million euros too much annually. The reason is that the legally required discount of 25 percent for temporary contracts is often not deducted. Instead, surcharges of up to 200 percent of the benchmark are demanded.

Rent Cap and Clear Rules Demanded

The AK therefore demands a new rental law with clear rent caps, capped surcharges, and an end to fixed-term contracts. Exceptions should only be made for private landlords who rent out apartments temporarily. Additionally, the AK advocates for a legal obligation to provide information about contract renewals and sanctions for rent usury. The annual rent increase should be allowed to be a maximum of two percent.

Homeowners' Association and FPÖ Against General Ban on Fixed-Term Contracts

The Austrian Homeowners' Association (ÖHGB) rejects a ban on fixed-term contracts. President Martin Prunbauer argues: "Without fixed-term contracts and with the continuation of entry rights, an apartment is practically handed over for generations." He even supports the fixed-term leasing of municipal apartments – for example, according to the Vorarlberg model, as this would increase social targeting.

FPÖ City Councilor Dominik Nepp also opposes the AK's demand. In a statement, he points to a renovation backlog at Wiener Wohnen amounting to ten billion euros.

However, the Austrian Association of Real Estate Industry (ÖVI) notes that the AK refuses to cooperate in developing a model rental contract. But the ÖVI also sees a need for change in the benchmark law, as there are significant regional differences.

(APA/Red)

This article has been automatically translated, read the original article here.