PURCHASER PRINCIPLE for RENTALS from 1 January 2023

PURCHASER PRINCIPLE for RENTALS from 1 January 2023

You have probably already heard that the government is planning to introduce the "estate agent commission according to the ordering principle" from 1 January 2023? This has long been the case in Germany, but here in Austria the government is now planning for the costs of the estate agent to be borne by the person who placed the order.

The government's aim is to take appropriate account of the different interests of tenants, landlords and estate agents. However, it failed to hold personal discussions with the groups concerned and to listen to their points of view.

The negative effects would be that this would destroy another professional field. Namely, property agents who only broker rental flats. Thousands of businesses will be threatened with job losses.

The Real Estate Guild expressly points out the disadvantages for all contractual partners in the planned implementation of the buyer principle.

In the past, it was often the case that the tenant paid the commission on lettings (usually 2 months' rent, depending on the length of the tenancy) and the landlord paid no commission.

Now the picture should change. The tenant should get a rental flat free of commission. The landlord should pay for the estate agent's services alone.

In future, tenants will be able to use the services of an estate agent for rental properties virtually free of charge.

It sounds advantageous for the tenant, but in practice it is not. Landlords will not be forced by law to pay for something that was previously free of charge. And those who could not or did not want to rent privately in the past will not do so themselves in the future either.

The question is whether the tenant will ultimately bear the costs again, in whatever form? So don't rejoice too soon!

It must also be taken into account that in the event of a unilateral assignment by the landlord, only the interests of the landlord are realised. The tenant could be deprived of the protection of his interests and support. Furthermore, there would be a risk of information deficits for the tenant when concluding a tenancy agreement.

Previously, a real estate agent represented both the landlord and the tenant. Therefore, commission could also be demanded from both sides. In the past, the estate agent always acted as a dual agent and had to represent the interests of both sides.

Unfortunately, a solution that is fair and smooth for everyone is not yet in sight and is far from being set in stone.

It is to be hoped that the government will also listen to the experts in the property sector. A satisfactory and sensible solution would be an advantage for everyone involved!