Pacht or Miete for commercial property — the difference

Key points

• Tenancy and Pacht are both contracts of hire (Bestandverträge) (§ 1090 ABGB). Under § 1091 ABGB it is a tenancy if the thing can be used without further work, and a Pacht if it can only be used through diligence and effort — for example by running a business.
• To draw the line, the courts ask whether a going concern (lebendes Unternehmen) is handed over: fittings, stock, customer base, often combined with an obligation to operate (Betriebspflicht).
• The Tenancy Act applies to tenancies (§ 1 Abs 1 MRG), not to Pacht. A genuine business lease (Unternehmenspacht) is therefore outside the MRG.
• The name of the contract is not decisive; what counts is what is actually handed over.
• Typical Pacht objects are restaurants and bars, hotels and petrol stations.
• Agricultural leases (Landpacht, for farm and forest land) follow their own rules and are not covered here.

Pacht and tenancy — two forms of one contract

Definition: A Pacht is a contract of hire under which the lessee (Pächter) takes over not just premises but a functioning business including fittings and customer base, and runs it for their own account — unlike a tenancy, which only grants the use of premises.

§ 1090 ABGB defines a contract of hire (Bestandvertrag) as any contract by which someone obtains the use of a non-consumable thing for a certain time and for a certain price. § 1091 ABGB then distinguishes: if the thing can be used without further work, it is a tenancy agreement (Mietvertrag); if it can only be used through diligence and effort, it is a lease agreement (Pachtvertrag).

How the courts distinguish Pacht from tenancy

According to settled case law, what matters is whether a going concern is handed over. The party taking the premises is then given not just the space but everything essential to running the business — shop fittings, inventory, stock and customer base. An obligation to operate (Betriebspflicht), even one agreed only implicitly, strongly suggests a Pacht; a trade licence (Gewerbeberechtigung) alone is not enough for that. If customer base, stock and trade licence are missing, that points rather to a tenancy (OGH 27.11.2002, 3 Ob 274/02v).

There are no rigid rules: each case is assessed as a whole. Whether the contract is called a "Pachtvertrag" or a "Mietvertrag" is not decisive in itself.

Why the distinction matters in practice

§ 1 Abs 1 MRG sets the scope of the Tenancy Act as the tenancy of flats and business premises. A genuine business lease therefore does not fall under the MRG — with consequences:

• Termination: the contract and the general law of hire in the ABGB apply, not the MRG's protection against termination.
• Investments by the lessee need to be governed by the contract. The ban on key money (Ablöse) in § 27 MRG concerns tenancies — more on this in Retail unit to rent or buy.
• Return at the end of the Pacht follows the contractual rules on inventory and condition.

If the lessor (Verpächter) is themselves only the main tenant of the retail unit and the MRG applies in full, there is an additional feature: they may lease out the business run in the unit even against an agreement to the contrary, but must notify the landlord of the Pacht and its duration; if the main rent was below the appropriate rent, the landlord can demand an increase for the duration of the Pacht (§ 12a Abs 5 MRG).

Typical Pacht objects

In practice these are mainly businesses where fittings and customer base are inseparable from the value of the business: restaurants and bars, hotels and petrol stations. Agricultural and forest land is also leased, but follows its own rules.

We broker lease objects (Pachtobjekte) and support lessors and lessees — currently, among others, one object in the Vienna surroundings that is offered for lease. What is available right now is under Commercial.

Checklist for lessees and lessors