Warranty under sections 922 ff of the Austrian Civil Code for hidden defects: period, improvement, price reduction, rescission, burden of proof and exclusion limits.
BRANDAUER Rechtsanwälte
Salzburg law firm for real estate, property and corporate law
Every matter is handled by a coordinated team of lawyers, legal staff and specialists. In property purchase matters we look at the contract, land register, escrow and tax consequences together.
After moving in, a defect appears that was not visible at the purchase: dampness in the cellar, mould behind a cupboard or a leak that was hidden behind furniture. Such hidden defects raise the question whether the seller must stand in for them and which rights you have.
This post explains the warranty under sections 922 ff of the Austrian Civil Code (ABGB) when buying a property. The focus is on the period of three years from handover, the order of the remedies from improvement to rescission, the presumption of defectiveness in the first year and the limits of a warranty exclusion in a private sale.
Anyone who documents a hidden defect early and classifies it correctly secures their rights. From a lawyer perspective the distinction between warranty, damages and avoidance for error is often decisive, because these paths have different requirements and periods.
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For immovable property the warranty period runs three years from handover. After that, warranty claims are in principle time-barred.
For immovable property the warranty ends three years after handover. If handover was longer ago, warranty claims are generally time-barred. It should still be checked whether a damages claim based on fraudulent deception comes into question, because that is subject to different periods. Our checklist on defects and warranty evidence offers a first orientation.
Have the individual case reviewed, because periods and bases of claim differ.
If the defect falls within the period and no effective exclusion applies, you can assert warranty. First, improvement or replacement take priority, then price reduction or, in the case of a significant defect, rescission come into question. Secure the defect with photos and an expert opinion and notify the seller promptly.
A legal assessment clarifies which remedy is best for your case.
If the defect was apparent at handover and a warranty exclusion was agreed, your position is weakened. What matters is whether it is a truly hidden defect, whether a specific characteristic was warranted or whether the seller fraudulently concealed the defect. In those cases the exclusion does not apply.
Have it checked whether the exclusion covers your specific defect at all.
The warranty under sections 922 ff ABGB obliges the seller to stand in for the property having, at handover, the agreed or ordinarily presumed characteristics. A defect exists if the property deviates from this target condition. What matters is the condition at the time of handover, even if the defect only shows up later.
For immovable property, that is also for a property, the warranty period is three years from handover. Within this period you must assert your claims in court. If you miss the period, the warranty rights lapse, even if the defect undoubtedly exists. Read more on the significance of handover on our focus page on handover and possession.
We explain the term itself in the glossary on the statutory warranty. You find a deeper treatment of the buyer rights on the focus page on the warranty for property defects.
The law provides an order of remedies. First come improvement, that is the remedying of the defect, or replacement. With a property this usually means the elimination of the defect, for example drying out a damp cellar, because a replacement of the property is ruled out here.
Only when improvement is impossible, is refused by the seller or would involve significant disadvantages for you do the further remedies come into question. You can then demand a price reduction, that is a lowering of the purchase price corresponding to the reduced value. In the case of a significant defect, rescission is available, with which the contract is reversed.
Which path makes sense depends on the individual case. A minor defect does not justify rescission, but it does justify a price reduction. A first assessment of the risks is provided by the purchase contract risk check. Which evidence you should gather is shown by the checklist on defects and warranty evidence.
An important relief is the presumption of defectiveness. If a defect shows up within the first year after handover, it is presumed that it already existed at handover. The seller must then prove that the defect only arose later, for example through improper use by you.
After the first year the burden of proof reverses. Then you as the buyer must prove that the defect already existed at handover. Especially with hidden defects this proof is demanding, which is why a timely expert opinion on the cause and the time of origin is valuable.
Therefore document every defect early with photos, a date and ideally an opinion. The earlier you detect and notify the defect, the stronger your position. How to record the condition at handover is covered in the post on the handover protocol for a house or apartment purchase.
The remedies follow an order. This overview shows when which step comes into question.
| Remedy | Requirement | Typical case |
|---|---|---|
| Improvement The defect can be remedied | Priority remedy, the seller remedies the defect | Drying out a damp cellar |
| Replacement A comparable item is available | Practically ruled out for a property | Rare, since each property is unique |
| Price reduction Improvement fails or is unreasonable | Lowering of the purchase price by the reduced value | Mould that cannot be fully remedied |
| Rescission Significant, non-remediable defect | Reversal of the entire contract | Severe, lasting penetration of dampness into the substance |
| Damages Fault of the seller | Compensation for the loss alongside the warranty | Fraudulently concealed defect |
Towards consumers the warranty may not be shortened below the statutory protection standard. In a private sale an exclusion for hidden defects is often disputed.
Caution with the period: Warranty claims for a property lapse three years after handover and must be asserted in court within this period. Do not wait too long and have your case reviewed quickly. Booking an initial consultation (72 euro) can quickly bring clarity.
When buying from a private seller the warranty is often excluded, for example with a clause that the property is sold as inspected and without warranty. Such an exclusion has limits, however. It does not, in case of doubt, cover fraudulently concealed defects or expressly warranted characteristics. We explain the term in the glossary on warranted characteristics.
If the seller fraudulently concealed a defect known to them, a damages claim comes into question alongside or instead of the warranty. Damages require fault, that is for example the deliberate concealment, and are subject to their own periods. A claim can thus exist even if the warranty period has already expired.
Alongside this stands avoidance for error. If you were led into an error about an essential characteristic of the property, you may be able to avoid the contract under certain circumstances. Which path is the right one depends on the seller conduct, the severity of the defect and the periods. Which documents the seller must provide is covered in the post on the seller obligations for the energy certificate and documents. On reviewing before the purchase in general, see the post on the review of the purchase contract before signing.
For a property as immovable property the warranty period is three years from handover. Within this period you must assert your claims in court. If the defect shows up in the first year, it is presumed that it already existed at handover. After that, you as the buyer bear the burden of proof.
An exclusion agreed in a private sale does not, in case of doubt, cover fraudulently concealed defects or expressly warranted characteristics. If the seller knew and concealed a hidden defect such as dampness or mould, the exclusion can fail. Towards consumers the warranty may in any case not be shortened below the statutory protection standard.
The warranty is independent of fault and only requires that the defect existed at handover. Damages require fault of the seller, for example the fraudulent concealment of a defect, and are subject to their own periods. A damages claim can therefore also exist when the warranty period has already expired.
Our focus page on the warranty in a property purchase with the central rights of the buyer.
Why the time of handover is decisive for the period, the passing of risk and the burden of proof.
How a protocol records the condition at handover and documents later defects.
What to look for in the purchase contract before you commit to the text.
When buying property, the contract and the land register decide. Call us directly or send an email, callback within one business day.
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BRANDAUER Rechtsanwälte GmbH Giselakai 51 5020 Salzburg
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