Austria has announced it will change its rental rules from 2023, removing the need for tenants to pay for brokerage fees, Justice Minister Alma Zadic (Greens) announced on Tuesday.
Currently, renters need to pay several fees when moving into a new apartment, including a security deposit and the first month’s rent.
Unless the property is rented “privately” by the owner without the brokerage firm intermediate, one of those fees includes the so-called ‘Provision‘, a brokerage fee paid by the tenant equivalent to two-months rent.
Tenants must pay that fee even if they found the apartment online, for example. Once a broker acts as an intermediate, even if they were hired by the property owner, the renter pays the fee. That is set to change in 2023.
The federal government has announced that the person who commissions the real estate broker should also pay the fee in the future. Austria estimates that about €50 million a year, which tenants pay, will be at the landlord’s expense.
“It is a great injustice to pay for a service that you have not commissioned yourself’, ” minister Zadic said at the press conference. She added that the cost represents a significant financial challenge, especially for low-income families and students.
A draft law should be reviewed this Wednesday, March 23rd, and a six-month transitional period is provided. The new law should be valid by the end of 2022 or the beginning of 2023.
The minister added that there is no assumption that landlords would add the costs to rent.
She mentioned a similar law introduced in Germany, and rents have not risen due to it.
Mieter – tenant or renter
Mietvertrag – rental contract
Kaution – security deposit
Betriebskosten – the extra costs associated with the apartment other than rent, such as water, and gas
Provision – the brokerage fee