In France and Hungary, the duty to repair is on the borrower for use who is entitled to reclaim his/her expenses on expiry of the loan from the lender (in Hungary, on the basis of negotiorum gestio). The borrower will therefore have a duty to repair the heating system and repaint the flaking walls.47 Neither party, however, is saddled with a duty to repair the dilapidated fences or the leaky roof.48

Austria

For lease contracts, the answer depends on whether and to what extent the contract falls under the Law on Tenancy. Which version of the Law on Tenancy applies depends on when the contract concerned was concluded. The following answers refer to the provisions currently in force and not to older provisions which may apply to older contracts.

The general principle under Civil Code, art. 1096 is that the landlord must surrender the leased property to the tenant in a condition suitable for the contractually agreed use and maintain it in this condition for the term of the lease.49 Under an agricultural lease, the tenant is responsible for ordinary maintenance and repair of the leased buildings to the extent to which he/she can do so by using materials, such as wood,50 from the leased property itself (Civil Code, § 1096, para. 2, which is not mandatory).51

If the landlord does not fulfil his/her maintenance duties, the tenant is exempt from paying (at least part of) the rent for the period during which the property is not suitable for the agreed use.52 With regard to the lease of immovable property, a contrary agreement regarding rent reduction to the disadvantage of the tenant is not binding (Civil Code, § 1096, para. 1). Apart from rent reduction, the tenant can claim for specific performance of the maintenance duties under the lease or withdraw from the contract. If the landlord acted negligently, the tenant can also claim compensation for damages.53 However, if the

47See the French and Hungarian reports.

48The French report offers a detailed discussion of the obligations of the borrower and the precarist.

49Wu¨ rth, in Rummel, Kommentar, I, § 1096, para. 4.

50Iro, Sachenrecht, § 1096, para. 12.

514 Ob 591/89; wobl (1991), p. 2; 3 Ob 267/51; SZ 24/163; Wu¨ rth, in Rummel, Kommentar, I, § 1096, para. 1.

52Wu¨ rth, in Rummel, Kommentar, I, § 1096, paras. 10 ff.

53Ibid. I, § 1096, paras. 2 and 12.

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impairment of serviceability was caused by the negligence of the tenant himself/herself, he/she will not be entitled to a reduction of rent54 and, under Civil Code, § 1111, the tenant may be held liable for damages.

If a defect which requires repairs comes to light, the tenant must inform the landlord in order to avoid liability for consequential damages. The tenant may remedy the defect and demand reimbursement of the necessary expenses in accordance with the provisions governing negotiorium gestio. The tenant has to claim such reimbursement within six months after he/she has returned the leased property (Civil Code, § 1097).

Specific rules apply if the leased object is rendered unusable by events of force majeure, such as fire, flooding or storms. The landlord will not be obliged to reconstitute a condition suitable for the contractually agreed use, but neither will the tenant be obliged to pay the rent (Civil Code,

§ 1104). Furthermore, the tenant will be entitled to cancel the contract of lease.55

Specific rules apply if the contract falls under the Law on Tenancy.56 According to, § 3, the landlord must maintain the leased property in a condition which corresponds to the customary standards of the area concerned. Furthermore, he/she must ensure that the leased object does not pose a risk to the residents’ health. The parties are not allowed to deviate from these rules to the disadvantage of the tenant.57

The landlord must maintain the house and the parts and facilities which are used collectively by the residents (Law on Tenancy, § 3, para. 2 nos. 1 and 3) such as central heating systems and lifts (elevators). Other rules apply to the individual objects of the lease. The landlord must maintain them only to the extent that the defects can cause serious damage to the house or to the health of the inhabitants (§ 3, para. 2, no. 2). The tenant, on the other hand, must maintain the facilities such as the heating system or sanitary facilities in such a way that they do not cause damage either to the landlord or to other residents (§ 8).

If the tenant incurs expenses to effect improvements that will last even after termination of the contract of lease (for example, installation

54 Ibid. I, § 1096, para. 11. 55 Ibid. I, § 1096, para. 2.

56In principle, provisions of the Law on Tenancy are obligatory (4 Ob 591/89; wobl (1991), p. 2). Hence, any rules relating to the Law on Tenancy described in the following paragraphs can be deemed to be mandatory unless they are explicitly defined as non-mandatory.

574 Ob 591/89; wobl (1991), p. 2; 10 Ob 510/87; JBl (1988), p. 522; Prader, MRG, § 3, n. 2; Prader and Kuprian, ‘Erhaltungspflichten’, p. 271.

of an intercommunication system or measures to reduce energy consumption), he/she can demand reimbursement of these expenses (§ 10). This claim cannot be waived in advance (§ 10, para. 7). The landlord has to undertake useful improvements such as the rearrangement of conduits or the heating system, provided they are functional for the general condition of the house and he/she can cover the costs with rental income and public subvention (§ 4, para. 2 no 1). In case of damages caused by force majeure (fire, water, weather), the landlord is obliged to restore the suitability of the property for lease to the extent to which the costs are covered by insurance (§ 7).58

According to these principles, the answers to the examples are as follows. Under both the Civil Code and the Law on Tenancy, the landlord must carry out the necessary repairs if the central heating system becomes defective.59 The Civil Code and the Law on Tenancy differ where the central heating system only becomes obsolescent. According to the Civil Code, the landlord is not obliged to renew the system, but according to the Law on Tenancy, he/she has to renew it, provided the renewal benefits the general condition of the house and the costs can be covered by rental income and public subvention (Law on Tenancy, § 4, para. 2, no. 1).

If the roof is damaged by a storm, the landlord must repair it under the Law on Tenancy but not under the Civil Code.60 However, the Civil Code allows the tenant to withdraw from the contract or to refuse to pay the rent.

If the fences of the farm become dilapidated, the landlord is obliged to repair them if such defect renders the farm unsuitable for its contractually agreed use. However, if they can be repaired with material from the farm (wood etc.), the tenant is obliged to repair it (Civil Code, § 1096, para. 2).

Repainting is necessary to maintain the contractually agreed use if, without repainting, the brickwork would be damaged. In this case, the landlord is obliged to undertake repairs both under the Civil Code and the Law on Tenancy because damages of the brickwork would render the building unserviceable for the contractually agreed use. In this case, the omission to repaint the building renders the landlord liable for any consequential damages.

58This provision is obligatory as well; see Wu¨ rth, in Rummel, Kommentar, I, § 1104, para. 1.

59Binder, in Schwimann, Praxiskommentar, V, § 1096, para. 44.

60Ibid. V, § 1096, para. 52.

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If the defect was caused by the negligence of the tenant, he/she is liable for any damage caused and not entitled to claim rent reduction.

The general principle is that the usufructuary must maintain the servient land and carry out repairs and replacements provided that he/she can cover the cost of these measures with the fruits and the income gained from the land (Civil Code, § 513). In so far as the income is not sufficient to cover maintenance expenses, the landowner is obliged to bear the extra burden.61 The same provision stipulates that the usufructuary is liable for damages which he/she caused negligently, but not for defects brought about by using the land in conformity with the contract. The obligations of the usufructuary provided for in Civil Code, § 513 have not yet been explored in detail. According to legal doctrine, they generally correspond to those of the tenant of an income-producing (usufructuary) lease under Civil Code, § 1096, para. 2, and in order to interpret Civil Code, § 513 the corresponding provision of the German Civil Code (§ 1041) can be referred to.62

A different rule applies to the right of use. Under Civil Code, § 508, the owner is obliged to maintain the servient land in good condition and to perform all ordinary and extraordinary repairs as long as the cost of the repairs does not exceed the benefits which the owner draws from the property. Hence, in principle, the owner must maintain the land, buildings and equipment in a condition which renders them suitable for their agreed use.63

Regarding the examples mentioned in the question, it follows that (unless contractually agreed otherwise), as the holder of a usufruct, B has to repair the heating system and the fences as well as repaint the wall, provided that the respective costs are covered by what he gains from the property. However, if the heating system still works and is only obsolescent, neither A nor B is obliged to install a new one. As to the roof, the rule drawn from Civil Code, § 508, sent. 2 and by analogy to Civil Code, § 1104 is that the owner is not obliged to repair damages caused by force majeure such as fire, war, plagues and flooding. Hence, neither A nor B is obliged to repair the roof if it is damaged by a storm.

Different rules apply if B has a right of use. In this case, A (as nude owner or grantor of the right) is obliged to perform all ordinary and extraordinary maintenance work provided that the costs for this work

61 4 Ob 506/89; JBl (1989), p. 442. 62 Welser, ‘Erhaltungspflicht’, p. 145.

63Hofmann, in Rummel, Kommentar, I, § 508, para. 2; Kiendl-Wendner, in Schwimann and Verschraegen, Praxiskommentar, II, § 508, para. 1.