Litigation financing in Austrian tenancy law
The litigation funding in the Austrian tenancy is a newly established in Vienna in 2013 growth industry. The business model of litigation financiers is based on the organization and financing of rent reductions in old Viennese apartments , which are subject to the so-called benchmark rent , and the subsequent success commission on the financial benefit achieved by the tenants.
background
The legally permitted maximum rent for a Viennese apartment in an old building is regulated by the Austrian Tenancy Law (MRG) §16 (agreements on the amount of the main rent). Depending on the size, type, condition, location, equipment and state of preservation of the old apartment, there is a maximum rent that is determined by the company. Then the tenants are offered litigation financing and a repayment of the overpaid rent is organized by external lawyers , arbitration or court proceedings .
Originally developed in the USA in the 1990s, litigation financing has also arrived in Vienna through some private companies such as Mietheld , MietRunter and Mietfuchs . There are now a handful of other companies that want to establish themselves in the market, and the number of start-ups is steadily increasing.
method
Tenants can use a web form to enter basic data for their old apartments , which will be checked in a further step with regard to the applicability of Austrian tenancy law . In the course of the review, the corresponding old apartment is usually inspected by experts and the specified data is verified. The companies then determine the benchmark rent and whether the legal process is promising. If this is the case, lawyers, authorities or associations are commissioned to lower the rent, with the reimbursement of the rent that has already been paid too much. In return, the service providers estimate a success fee (usually around 25 percent) on the financial benefit achieved by the tenant. If a litigation, the costs of which are fully borne by the litigation financier, turns out to be to the disadvantage of the tenant, the costs of the company remain free and free of charge. Depending on whether the litigation financier chooses a compromise-ready negotiation with the landlord, an application to the state arbitration board or a direct filing of a complaint with the district court, it takes on average several months for the proceedings to lead to a result. In the case of a court hearing, 98 percent of the cases are in favor of the tenant.
criticism
Opinions on litigation financiers are divided, as landlords in particular see it as a threat to their business. It is often criticized that a rental agreement that has already been concluded can be subsequently declared invalid or changed. The Austrian news magazine profil criticizes the fact that the companies are neither regulated nor controlled by the state due to the novelty of the industry.
“You don't need a certificate of competence for a career as a litigation financer. It is open to everyone, provided they can design an appealing website and have legal and commercial knowledge. In addition, the litigation financiers are not subject to any state control. "
MVÖ- President Georg Niedermühlbichler considers the success commissions of the commercial providers to be too high, since a large part of the cases would be decided before the arbitration board without a court case. The work is of course profit-oriented, says Christian Pultar, managing director of MietRunter . Julius Richter von Mietheld comments as follows:
“Our service is basically free of charge; only in the event of success is a commission of 25 percent due to cover costs incurred. Our primary concern is to bring more justice to the Viennese real estate landscape and to make living more affordable. For those who don't have an apartment at all, we donate 10 euros per case to the Viennese homeless facility 'Die Gruft' "
The MVÖ is an association that promises the same service as the litigation financiers. Richard Eibl, founder of Mietheld , criticizes:
“The problem with the clubs is that the legal costs are often not covered in legal proceedings and have to be paid by the tenant himself in the event of a defeat. In addition, those seeking help are initially obliged to advance money and pay membership fees "
Individual evidence
- ↑ a b c d http://www.ots.at/presseaussendung/OTS_20150909_OTS0015/helden-des-mietrechts-die-erfinder-einer-branche
- ↑ a b c d http://www.profil.at/wirtschaft/mietrecht-von-fuechsen-checkern-helden-5846173
- ↑ Growing branch of old building rent check. In: derStandard.at. September 13, 2015, accessed December 21, 2017 .
- ↑ a b AK: Renting old buildings in Vienna is much too high. In: derStandard.at. February 17, 2011, accessed December 22, 2017 .
- ↑ https://www.wien.gv.at/wohnen/schlichtungstelle/verendungstelle.html
- ↑ http://www.immobilien-magazin.at/artikel/firmen_kontra_vermieter/2015.4144/
- ↑ "Rent down" business model. In: derStandard.at. December 13, 2013, accessed December 22, 2017 .