Combining rental units in an Austrian apartment building: permits, tenancy rights and the new rent basis

When two or more apartments in an Austrian apartment building are to be connected, a new floor plan is not enough. The building file, the exact construction measure, existing leases, the use of common parts and the later rent assessment all need to be reviewed. In an older building, pipes, load-bearing elements, fire safety and earlier alterations may change the project from the outset.

A combination does not automatically end existing tenancy rights and does not by itself create a new permissible rent agreement. Owners, property managers and tenants need to keep the building-law and tenancy-law questions separate before bringing them together. This article explains the sequence for an apartment building in Salzburg. It is not a guide to a single tenant alteration, a condominium conversion, a challenge under condominium law or an attic conversion.

Review the building file and permit route first

The first question is not whether one door can be removed. The relevant issue is the actual structural and use-related change. Salzburg's Building Police Act 1997 distinguishes between measures requiring a building permit, measures that are exempt and measures that are exempt but must be notified before they begin.

Section 2(1) BauPolG includes, among other things, the construction of buildings and additions, substantial changes to external appearance, changes affecting structural stability or fire safety and changes to the type of use. A combination of rental units may therefore require a permit depending on the work. The answer does not turn on the word combination. It turns on the intervention in the building, its systems and its use.

Section 3 BauPolG concerns only specified permit-exempt measures that must be notified in writing before execution. It is not a general exemption for alterations between apartments. A permit-exempt classification should be made only after the planned works are matched to the statutory requirements and the necessary documents have been prepared.

The building file review for an apartment building is the central record for this step. It should be compared with approved plans, measurements, services, earlier alterations and any authority orders. The combination should not be based on a plan that already describes the physical apartment incorrectly.

Existing tenancy rights require a separate review

If both apartments are let, there are initially two leases with their own history. Different tenants, fixed terms, rent agreements, deposits and ancillary areas cannot be merged merely by drawing one new plan. Even where the same tenant occupies both units, the owner should record which space was covered by which lease.

Section 3 MRG requires the landlord, subject to the legal, economic and technical circumstances and possibilities, to maintain the building, the units and the facilities serving the common use of residents at the locally customary standard and to remove serious health hazards. Works affecting common parts or services may therefore raise a maintenance issue. That does not answer separately whether a change to the rented unit, temporary access or tenant consent is required for the combination.

Where works affect a rented unit, the communication before construction should be precise. The tenant should receive a clear description of the works, the period, the rooms affected and the proposed reinstatement. If the let area is to change permanently, a written agreement with an exact description is useful. A short property-management note does not by itself settle the tenancy-law position.

The article on tenant alterations in an apartment building deals with a separate individual measure. The present topic concerns the entire combination project and its effect on the building file, leases and future letting.

The later rent basis does not arise automatically

After the works, the owner needs to determine which rent can be agreed for the combined unit. The review should cover whether the MRG applies, the equipment, usable floor area, location, condition and the structure of the proposed lease. A larger area does not mean that any new price per square metre is automatically permissible.

Section 16 MRG governs agreements on the amount of the main rent. Subsection 1 allows an appropriate main rent without the restrictions of subsections 2 to 5 in defined situations. If those conditions are not met, the statutory limits apply depending on the unit, including the reference-value system with additions and deductions where relevant. The applicable route depends on the building, the unit, the lease and the date of the agreement.

For a new letting, the combined area and its equipment should be described consistently. If an existing tenancy continues, the parties need to determine whether there is a genuine lease amendment, a new agreement for the additional area or another legal structure. Physically connecting two rooms does not by itself change the existing main rent.

The economic review should connect the new calculation with the previous rent roll, the leases and the plans. The rent roll and lease agreements topic page and the article on the condominium valuation report help keep areas and contract data distinct.

Keep the valuation report and condominium law distinct

A further layer arises in a building divided into condominium ownership. Combining two units may affect the boundaries of condominium objects, appurtenances and common parts. The valuation report describes the basis of the co-ownership shares. It does not replace a building permit or a tenancy agreement.

If two condominium objects are physically connected, the plans, valuation report, condominium agreement and land-register position must remain consistent. A physical connection does not automatically turn two objects into one condominium object. Conversely, carrying out the connection without updating the property-law records may create contradictions in sales, management and expense allocation.

The condominium agreement for an apartment building deals with ownership structure and common management. The apartment-building risk check gives an initial framing. The actual combination still requires a joint review of the building file, leases, valuation basis and agreement draft.

A practical sequence for owners and property managers

Begin with a record for each affected unit. It should state the ownership position, tenant, start date, fixed term, main rent, deposit, ancillary areas and known alterations. Then obtain the approved plans and the complete building file. Only this record allows the team to assess whether the proposed connection is technically and legally workable.

The specialist questions are then coordinated. A planner reviews the layout, structure, services, fire safety and later usability. The authority or the responsible specialist office classifies the procedure. Legal review runs in parallel and covers the leases, consent, works in rented property, costs, documentation and later contract structure.

Before work begins, responsibilities should be recorded in writing. This includes access, protection of occupied areas, replacement rooms, dates, evidence of condition, damage and acceptance. After completion, the actual work, use documents and updated plans need to agree with the leases and the property records.

If the unit is to be let again, the new unit description, permissible rent basis and floor-area calculation should be kept in the same file. This makes it possible to trace why the main rent was agreed on the stated basis.

Avoid common mistakes in a unit combination

A common mistake is to assume that removing a non-load-bearing wall makes the entire project permit-free. Changes to services, fire safety, escape routes and later use may still be decisive.

It is equally risky to replace several leases with one plan. The let area, tenant, deposit and main rent need their own written treatment.

A new price per square metre must not simply be applied to the combined area. Section 16 MRG requires a review of the statutory conditions and of the actual agreement.

Finally, valuation reports and condominium agreements are often addressed only after the building work. That moves an essential consistency check into a stage where units may already have been let, sold or charged for.