The head lease ends: notice and protection for the subtenant

When a head lease ends, a subtenant does not necessarily lose their position immediately. For an actual eviction, however, the key question is whether the subtenant derives the right to use the premises only from the head tenant or also has a separate legal relationship with the owner. Sections 2(2) MRG and 568 ZPO, together with the contracts, provide the main framework.

The subtenant needs prompt clarity about the reason for termination, the status of any proceedings and the possible handover date. Owners and buyers of an apartment building must review the contractual chain separately from actual occupation. This article explains the notice duty, the effect of an eviction title and the situations in which a direct relationship with the owner can matter.

Review the head lease and sublease separately

Under section 2(2) MRG, a sublease is a lease with a person who has only a contractually granted right to use the premises. The subtenant therefore normally contracts with the head tenant, not with the owner. The head lease and the sublease are connected, but they remain separate contractual relationships.

Both contracts should be placed in the same file. Review the rooms, term, rent, ancillary areas, deposit, consent to subletting and every communication with the owner. A rent-roll entry alone does not prove consent or an independent right against the owner.

Our article on subletting rights in an apartment building covers the contract and data-room side. This article focuses on the situation where the head tenant’s right is ending or expected to end.

Give notice under section 2(2) MRG properly

If the sublessor’s right to use the premises is terminated, section 2(2) MRG requires the sublessor to inform the subtenant without delay. The notice should reflect the actual reason for termination and the known status of the head lease. An informal verbal message often leaves the content and timing disputed.

In practice, the notice should identify the head lease, the date of termination or other ending, any case number, known dates and the responsible contact person. A pending eviction should not be described as a completed handover. The head tenant should also avoid promising a binding move-out date before the required agreement exists.

The subtenant should preserve the notice, the sublease, payment evidence and communication in an organised file. The owner should record when notice was given and whether the subtenant claims an objection or a direct contract with the owner. The rent-roll and lease-agreement topic page explains which tenancy records belong together.

How section 568 ZPO affects the subtenant

Section 568 ZPO provides that notices, orders, decisions and directions obtained against the main tenant are generally effective and enforceable against the subtenant as well. This concerns the existence or ending of a lease for an object covered by section 560 ZPO. The subtenant therefore normally cannot rely against the owner only on the fact that the sublease with the head tenant is still running.

The reason is the contractual chain. The head tenant gives the subtenant the right to use the premises. Once that right ends, the subtenant can generally enforce the sublease against the contractual partner. Against the owner, the sublease can prevail only where a legal relationship between subtenant and owner stands in the way. Section 568 ZPO expressly preserves that exception.

An eviction title and actual vacant possession are different states. Service, finality, enforcement status, keys and physical handover should be recorded separately for planning and communication. Section 568 ZPO does not create one general fixed eviction period; the specific file and enforcement status determine the practical timing.

When a direct relationship with the owner can help

The decisive objection is not simply that the sublease has not expired. The question is whether the subtenant derives the right to use the premises directly from the owner. This may result from a separate lease, an expressly granted right of use or statutory succession in a specific contractual structure. The documents must support that direct connection.

Section 2(1) MRG contains a special rule for a tenant or lessee of an entire house. If such a general lease ends, the owner may, under the statutory conditions, enter into the main leases of the users. Whether an economic unit qualifies as an entire house and whether the purpose was profitable onward letting depends on the facts.

In 3 Ob 87/25b of 24 September 2025, the Supreme Court held that the consequence under the final sentence of section 2(1) MRG must be considered not only where the general lease is terminated by notice but also where it ends by expiry. The decision also stresses that the requirements of the general lease and the actual use must be established. The label sublease is therefore not enough by itself.

Separate claims against the head tenant and owner

When the head lease ends, the subtenant’s main contractual contact will normally remain the head tenant. Claims for return of a deposit, reimbursement, an account or damages depend on the sublease and the circumstances in which it ends. The owner does not automatically become the subtenant’s contractual partner.

The position can differ where a direct legal relationship with the owner is proved. The agreement, handover, the owner’s knowledge and actual performance then matter. Payments to the owner or extended communication with the property manager do not alone prove an independent head lease.

For an apartment-building project, these levels should be separated economically. The apartment-building purchase topic explains why income, security and contract chains should not be reduced to one aggregate list. Open subleases belong in the handover and risk matrix before closing.

Organise eviction, settlement and handover

An agreed solution may give the subtenant time and the owner planning certainty. It should address the end of the sublease, the return date, keys, the deposit, open payments and any moving costs. A general statement that the premises will be returned at some point leaves central questions unanswered.

If court proceedings are pending, the parties must keep their roles separate. A settlement with the head tenant does not necessarily end the sublease in the same form if the subtenant is not included. The owner should also check whether the existing title covers the relevant room and contractual chain.

The handover and effective-date topic shows why access and use must be legally and physically clear before works start. The same applies where the premises appear partly vacant or the head tenant has announced an imminent return.

Secure the documents and avoid common errors

The review should include the head lease and amendments, sublease, consents, deposit and payment evidence, rent roll, termination letters, proof of service, court decisions and communication about return or settlement. For commercial premises, plans, ancillary areas and evidence of actual use may also be relevant.

Common errors include treating vacancy as the end of the contract, assuming an automatic transfer, giving notice without proof of service and relying on a fixed eviction period. An eviction title must also be read for its scope and enforcement status. In an ownership change, section 1120 ABGB should not replace the specific MRG and ZPO review.

An occupancy matrix helps: it records the head tenant, subtenant, contractual basis, termination status, direct owner contacts, deposit, arrears, return date and missing evidence for each unit. The apartment-building risk check can structure these open points for a further review.