Buying an apartment in a tourist centre and renting it out to tourists is a popular form of financial investment all around the world. Thanks to the European Union’s internal market and its “four freedoms” it is even easier for European citizens to partake in this kind of business within European borders.

Furthermore the Protocol to the Convention for the Protection of Human Rights and Fundamental Freedoms, as amended by Protocol No. 11, which is part of the Treaty on European Union (Article 6.3. TEU) states in its Article 1: “Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions […]”

Yet according to Austrian law the owner of an apartment is not allowed to do everything with it as he or she pleases. The reason for that lies in the fact that owning an apartment actually means being a mere co-owner of the real estate and the building in which the apartment is situated (Wohnungseigentumsgesetz 2002).

To make sure no rights of individual co-owners are violated, oftentimes a decision involving all co-owners must be reached (sometimes unanimously) before an apartment owner is entitled to modify his or her apartment. It must be made clear that such modifications comprise not only physical changes (like replacing the windows or installing a satellite dish) but also changes of the apartment’s purpose. For example, every single apartment owner of a building must agree, if a co-owner wants to use his or her apartment as an office.

A recent judgement of the Supreme Court of the Republic of Austria (Oberster Gerichtshof der Republik Österreich, 5 Ob 59/14h) has once again clarified the fact, that the owner of an apartment is restricted in the use of his or her property. According to the Supreme Court the use of an apartment for touristic purposes is in need of a unanimous consent among all co-owners. If said consent is not already given in the “Wohnungseigentumsvertrag”, which is a contract signed by every apartment owner (or their legal predecessor), the co-owners will have to agree to the change of purpose afterwards – otherwise a landlord cannot rent out his apartment to tourists without breaking the contract and risking to become a target for cease and desist lawsuits.

In conclusion it is vital for every soon-to-be buyer who wants to rent out his or her apartment to tourists (short-term apartment leasing) to check the terms of the “Wohnungseigentumsvertrag” or to initiate a decision making process with the aim to be allowed to use the future apartment to his or her liking.

Publisher: DDr. Fürst Rechtsanwalts – GmbH