Apartment granted on revocation: distinguish a precarious loan from a lease

An apartment can be handed over without a written lease. The key question is whether use was agreed in return for payment or whether the owner merely allowed free use without a defined term or defined purpose. For the second situation, section 974 ABGB describes a precarious loan, also called a precarium.

The label does not decide the case. Messages, payments, discussions about duration, the reason for the handover and the parties' conduct must be considered together. The articles on subletting rights in an apartment building and on the end of a head lease concern paid contractual relationships with a different starting point.

Section 974 ABGB: when a precarium exists

Section 974 ABGB addresses two open points: neither the duration nor the intended use may have been determined. If both are absent, the provision describes the arrangement as no true contract but as a precarious loan. The lender may request return of the item provided.

For an apartment, this means that free use by a relative, family member or person receiving temporary support is not automatically a lease. The opposite conclusion cannot be drawn merely by calling the arrangement revocable. What was agreed or objectively intended when the keys were handed over remains decisive.

Section 974 ABGB primarily explains the effect of an arrangement without a defined commitment. It does not replace a factual review. The person requesting return and the person seeking continued use should therefore record the original understanding and later statements separately.

Review the duration and purpose of apartment use

Free use can still have a defined framework. The parties may have discussed use until someone returns from abroad, until another home is ready or for a clearly described purpose. Such an agreement is not a minor detail.

Records before the handover, statements made when keys were delivered and conduct during the occupation all matter. Was an end date discussed? Was only a particular room to be used? Was the use tied to a family or employment situation? These circumstances can show what commitment the parties intended.

If the accounts conflict, the review should not stop with one message. A later request for return does not by itself prove that an unrestricted revocation was agreed from the start. It also does not prove that the occupant was entitled to use the apartment indefinitely.

Precarium or lease: separate payment from a favour

The central distinction from a lease is consideration. A tenancy agreement grants use of an item for a defined payment. The precarious loan under section 974 ABGB is based on free use. The review must therefore establish whether a monthly transfer was rent or merely covered particular running costs.

A payment to the property manager or the assumption of service charges should not be classified as rent without examining its purpose. Amount, regularity and the communication around the payment may support or undermine a paid arrangement. Occasional payment of expenses can still be consistent with free use.

The article on partial subletting in an apartment building starts from a different contractual question. It concerns the transfer of an existing paid tenancy. For a precarium, the first issue is whether such a tenancy ever arose.

Prepare revocation and return in a traceable way

Before requesting return, the owner should clarify the legal basis for the request. A factual letter identifies the apartment, the use so far, the request for return and a reasonable date. Receipt of the letter should be provable.

The file should also record the condition of the apartment, keys delivered, items left behind and open accounting questions. Photographs and a handover record can reduce later disputes about damage or the date of return. Communication should stay with the facts and avoid unsupported legal labels.

If return is refused, the further route depends on the classification and the circumstances. A request for return is an important step, but it does not automatically answer which legal procedure is appropriate. In a disputed occupation, the title, handover agreement and proof of delivery should be reviewed together.

Classify use granted for a specific purpose

A specific purpose can distinguish the use from an entirely open favour. Examples include a transition period, care for a close person or use until a defined event. The purpose must be concrete enough for its effect on the beginning and end of the use to be assessed.

A purpose must be separated from a mere expectation. A friendly hope that the apartment will be used only briefly does not automatically create a defined term. A documented agreement about a transition period can be significant for the legal assessment.

Service accommodation, succession after the death of a main tenant and genuine subletting raise separate questions. The article on succession after the death of a main tenant shows why free use must not be equated with every other right to occupy a home.

Keep lease, sublease and precarium separate

A person may occupy an apartment under their own lease, as a subtenant or merely under a free permission to use it. These starting points lead to different questions about return, termination, payment and protection. The everyday label used by the parties is less important than the agreement.

For a sublease, the head lease and the transfer to another person must first be reviewed. A section 974 ABGB precarium instead concerns direct free use without a defined duration or purpose. The model cannot be inferred from the current payment position alone.

The article on subletting rights and the lease is a useful complement where a head tenant, subtenant and data room are involved. For a precarium, the original arrangement remains the first point of review.

Review an owner change and management separately

A change of owner changes the records to be assembled, but it does not by itself answer the original legal basis of occupation. The purchase agreement, handover record, rent schedule and earlier correspondence may provide evidence. Registration of a new owner does not automatically turn a former favour into a lease.

A property manager may receive or pass on statements if authorised. The owner, occupant and specific agreement must nevertheless be kept separate in the review. Anyone communicating with the manager should therefore preserve the authority and wording of the communication.

In a sale, leases and other rights of use should be recorded separately. The article on owner changes and lease transfer addresses the handover of leases and management. The question of a precarium remains a separate factual issue.

A review file for free apartment use

The first review should be based on a chronological file. Start with proof of ownership, address and the rooms provided. Then add the key handover, messages, emails, written agreements and statements from people who attended the arrangement.

A separate part should list payments and expenses. For every payment record the date, amount, recipient, stated purpose and whether it was requested regularly. This makes it easier to distinguish a cost contribution from possible rent.

Finally record the duration, purpose, request for return and current condition of the apartment. A clear chronology prevents a later statement from silently replacing the original understanding. It also supports an agreed return or the next legal review.

Next steps after a request for return

First check whether payment, a defined duration or a specific purpose was agreed. If all three remain open, section 974 ABGB is the central starting point for reviewing a precarious loan. The term precarium should be used only after this factual review.

Then arrange communication, payments and the request for return chronologically. If return is refused, the legal basis, delivery of the statement, condition of the apartment and appropriate next step must be assessed together. An organised file makes that review faster.

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