Author Archives: Patrick Maydell

A decision of the Austrian Supreme Court (5 Ob 120/21i) clarifies that a customer commissioning construction work may withdraw from the contract after losing trust in the contractor because delivery obligations were not fulfilled on time. Such withdrawal may even be permissible without setting a grace period.

The case concerned a consortium of construction companies commissioned to supply edge-walkway covers and supports for a new railway line. Many covers proved defective and did not meet the agreed dimensions. Far too few were delivered. The customer then set a four-week grace period for delivery of the remaining covers. During that period, an inspection of one of the consortium's factories revealed that it would be unable to supply the missing covers by the deadline. The customer therefore withdrew immediately, without waiting for the grace period to expire, and commissioned other companies to carry out substitute performance.

The consortium nevertheless considered that it had acted correctly and sued for the outstanding contract price. On final appeal, the Supreme Court held that withdrawal normally requires a reasonable grace period for the defaulting contractual partner. However, none is necessary where that party is clearly unable to remedy the failure or seriously and definitively refuses performance. A right to withdraw without a grace period also exists where one party has lost trust in the other because of conduct contrary to good faith, making continuation of the contract unreasonable.

Here, withdrawal without a further grace period was permissible because the factory inspection showed that the consortium could not deliver the agreed quantity on time: the factory did not even have the formwork needed to manufacture the covers.

This decision shows that a grace period need not always be set or allowed to expire before another business can be instructed. The conditions for withdrawal without a grace period nevertheless depend on the circumstances of the individual case.

If you face legal difficulties with building clients or construction companies, I will be pleased to provide detailed advice at my office. Contact me for an initial consultation.

Mag. Patrick Maydell, LL.M.
Attorney at Law
Neustiftgasse 17/1/9
1070 Vienna
Telephone: +43 1 2954251
office@maydell-law.at

Learn the essentials of the statutory compulsory share: how to obtain yours, the legal remedies available and how heirs can defend unjustified claims. Experienced inheritance lawyer Mag. Patrick Maydell, LL.M. offers these practical tips.

1. What is a compulsory share?

A person can generally choose whom to benefit on death. Compulsory-share law limits that freedom: certain persons must receive a specified part of the estate through a testamentary disposition, such as a will. If they do not, those entitled have a monetary claim against the estate or the heirs.

The compulsory share must be freely available to its recipient, without conditions, encumbrances, time limits or obligations restricting it.

2. Who is entitled?

The deceased's descendants, meaning children, and spouse or registered partner are entitled to a compulsory share. Siblings and parents are not.

3. How much is the compulsory share and how is it calculated?

It is half the statutory inheritance share. Under intestate succession, a spouse alongside children receives one third and the children together two thirds. The spouse's compulsory share is therefore one sixth and the children's combined share one third. If there is no spouse, children share equally: with three children, each statutory share is one third and each compulsory share one sixth.

The calculation uses the net estate: assets less liabilities. Liabilities include the deceased's debts and costs arising from death, the funeral and probate proceedings. Legacies do not reduce the net estate for this purpose.

4. When must you claim?

The claim arises at death but can only be demanded one year afterwards. It becomes time-barred three years after knowledge of the facts establishing the claim, described here as three years after learning of the death.

5. Who owes the compulsory share?

Before the estate is formally transferred to the heirs by the probate court (Einantwortung), the estate owes it; afterwards, the heirs do. If the deceased did not provide the entitlement in full, for example through lifetime gifts, a monetary claim arises. Legatees must then contribute proportionately alongside the heirs, up to the value of the estate.

Free initial assessment — call now

Call +43 1 295 4251 for a free initial assessment by telephone or email office@maydell-law.at.

6. How are gifts added to and credited against the compulsory share?

6a. Gifts to persons entitled to a compulsory share

If the deceased reduced their assets through lifetime gifts to such persons, for example children, the other entitled persons and the heirs may demand that these gifts be added and credited. The gift's value is first added to the estate, and compulsory shares are calculated on the increased amount. The recipient must then credit the gift against their own compulsory share and receives correspondingly less. Gifts to persons entitled to a compulsory share are included without a time limit.

Example: assets of EUR 110,000 less debts of EUR 30,000 leave a net estate of EUR 80,000. There are two children, each entitled to half under intestate succession and a compulsory share of one quarter. The first child received a car worth EUR 20,000 during the deceased's lifetime. The second child may demand inclusion of that gift. The calculation basis becomes EUR 100,000 and each compulsory share EUR 25,000. After crediting the EUR 20,000 car, the first child receives EUR 5,000.

6b. Gifts to persons not entitled to a compulsory share

At an entitled person's request, gifts to persons outside the compulsory-share group are also added when calculating the shares. However, this applies only to gifts made within two years before death.

Example: the net estate is EUR 80,000. A year before death, the deceased gave a friend EUR 10,000. The two children, with no surviving spouse, can request its inclusion. The calculation basis becomes EUR 90,000, giving each child one quarter, or EUR 22,500.

6c. Exceptions

The following gifts are exempt from inclusion and do not generate an additional compulsory-share payment:

• gifts fulfilling a moral duty, such as a ring for a spouse's silver wedding anniversary;
• gifts for charitable purposes, such as a donation to a kindergarten;
• gifts that did not reduce the donor's capital, made from current income and savings from the preceding year.

7. How can you enforce your compulsory share?

If you believe you have received too little, you can bring an action for supplementation of the compulsory share against the heirs or estate. In practice, I recommend first calculating the entitlement correctly and sending a written demand. If an out-of-court agreement cannot be reached, proceedings must be brought.

8. Can a compulsory share be taken away?

Deprivation of the compulsory share through disinheritance requires a statutory ground. These include the entitled person:

• committing an offence against the deceased or close relatives, such as a spouse or sibling, which can only be committed intentionally and carries more than one year's imprisonment, for example aggravated bodily harm or serious fraud;
• intentionally preventing or attempting to prevent fulfilment of the deceased's true last wishes, for example by forging a will;
• reprehensibly causing the deceased serious emotional suffering;
• otherwise grossly neglecting family-law duties towards the deceased;
• being sentenced to life imprisonment or twenty years' imprisonment for an intentional offence.

The deceased must have ordered disinheritance expressly or implicitly by omitting the person from the testamentary disposition.

9. Can the compulsory share be reduced by half?

A reduction by half is possible if there was no close family relationship for at least twenty years. The individual circumstances matter; for example, there may be no close relationship if the deceased saw the person only three times in their life. The reduction must be ordered in a testamentary disposition, expressly or implicitly through omission.

Reduction is excluded if the deceased avoided contact without reason or gave justified cause for the lack of contact, for example where a father refused contact with his daughter without her having given him a reason. Here too, personal circumstances are decisive.

10. Waiving a compulsory share or inheritance

A person entitled to a compulsory share may waive it during the deceased's lifetime or in probate proceedings. This often happens when assets are distributed in advance, for example where a child receives a property or apartment in return for a waiver.

The testator may then dispose of assets without that compulsory-share restriction. Unless otherwise agreed, the waiver also applies to the waiving person's descendants. A waiver may prevent disputes or preserve a business intended for one child, where other compulsory-share claims could threaten its continued existence.

A compulsory-share waiver does not remove the person's statutory inheritance right. If there is no testamentary disposition and intestate succession applies, the person may still receive part of the estate.

A waiver of inheritance, by contrast, includes both the compulsory share and statutory inheritance rights. Even then, the testator may still benefit the person in a will, for example by leaving something to a child who waived inheritance rights.

11. Deferral and instalments

The deceased may order deferral or payment by instalments for up to five years in a testamentary disposition. An heir owing the share may also request deferral or instalments for up to five years if immediate payment would cause excessive hardship, for example requiring sale of the home needed to meet an urgent housing need because other assets are insufficient. In particularly deserving cases, deferral may extend to a maximum of ten years.

12. What does litigation cost, and will legal expenses insurance cover it?

Costs depend on the amount in dispute, meaning the compulsory share claimed. Higher claims mean higher litigation costs, consisting of lawyers' fees and court fees. The examples in this article are EUR 1,048.44 for bringing a EUR 17,000 claim plus EUR 743 court fees, and EUR 1,992.36 for a EUR 50,000 claim plus EUR 1,459 court fees. Court fees are payable once, regardless of the duration of proceedings.

If you win, you are entitled to reimbursement of litigation costs by the opponent, including the costs you advanced.

If you have legal expenses insurance, check whether inheritance law is included. If so, it covers the litigation costs under the policy. I can make a free written coverage enquiry to establish whether your particular case is covered.

If you are not yet insured, note that policies often contain waiting periods. Depending on their terms, cover may be refused, for example, if the death occurs one year after the policy was taken out. It is therefore important to arrange cover in good time.

How I can help

As a specialist inheritance lawyer, I advise and represent you in all matters involving inheritance and compulsory shares, including:

• enforcing inheritance rights and defending unjustified claims in contested estates in and out of court;
• estate planning, including purchase and gift agreements, gifts effective on death and waivers of inheritance or compulsory shares;
• drafting, registering and holding your will in safekeeping;
• advice and representation in inheritance partition proceedings — see my article on partition actions;
• calculating your compulsory share and helping prevent inheritance disputes;
• advice on succession and the effects of an acceptance declaration, and representation in probate proceedings.

Free initial assessment — call now

If you have questions or need help enforcing or defending compulsory-share claims, we offer a free initial telephone assessment. Call +43 1 295 4251 or email office@maydell-law.at.

Mag. Patrick Maydell, LL.M.
Attorney at Law
Neustiftgasse 17/1/9
1070 Vienna
Telephone: +43 1 295 4251
office@maydell-law.at

This decision of the Austrian Supreme Court of 20 October 2020 (4 Ob 162/20g) addresses whether other co-owners may bring an eviction action against a co-owner who uses the property alone because they wish to rent it out.

The claimants initially had no objection to the defendant's exclusive use, but later withdrew their consent. There was neither a usage agreement between the parties nor a court order regulating use.

In earlier decisions, the Supreme Court held that each co-owner is generally entitled to use the property to an extent approximately corresponding to their share, provided they have a personal need for such use. Where the jointly owned asset offers only limited possibilities of use, a co-owner may, even without agreement with the others, make any use that does not interfere with their actual use (RIS-Justiz RS0013197 and RS0013211; 9 Ob 85/00s). Under these conditions, exclusive use is also permitted.

The Court therefore had to determine whether the claimants actually used the property or had a concrete wish to do so. Only interference with their use would mean that the defendant's exclusive use infringed their rights as co-owners.

On whether a wish to rent out the property amounts to a concrete wish to use it, the Supreme Court held that without a claim to use the property themselves, the defendant's exclusive use did not unlawfully interfere with the claimants' ownership rights. Wanting to rent it out is not a concrete wish to use it. Without such a wish, the claimants were therefore entitled only to usage compensation from the defendant.

If you have questions or need help with partitioning houses, land or apartments, please call to arrange an appointment or email office@maydell-law.at.

Physical partition of a property means dividing it into at least two plots. Such a subdivision is permissible only if all relevant statutory requirements are met.

A municipality may impose a temporary building ban on all or part of its area when it intends to amend its zoning or development plan. This is intended to prevent building projects that would conflict with the future plans.

A building ban in the municipality where the property is located does not automatically prevent subdivision. Whether the building authority can approve the intended subdivision depends primarily on compliance with the existing development plan and compatibility with future zoning and development plans. In Vienna, this is regulated by section 8(2) of the Vienna Building Code.

However, each Austrian federal state may adopt different rules. Whether a property can be physically partitioned despite an existing building ban must therefore always be examined individually.

Learn the essentials of legacies and bequests from experienced inheritance lawyer Mag. Patrick Maydell, LL.M.

1. What is a legacy?

A legacy or bequest (Vermächtnis or Legat) is a benefit left by the deceased to a legatee without making that person an heir. It does not confer a share in the entire estate, but a particular asset or benefit. Anything that benefits the legatee can be bequeathed: a physical object such as a car or painting, a claim such as a bank balance, a right of residence, a business and so on.

A legacy of a specific asset is effective only if the asset belongs to the deceased or the heir. This means the testator can even leave an asset belonging to the heir rather than to the testator. The heir can avoid this by declining the inheritance.

The testator may also oblige the heir to acquire an asset and transfer it to the legatee, known as a procurement legacy (Verschaffungsvermächtnis). If its owner will not sell, or will sell only above market value, this becomes a monetary legacy equal to market value.

If the asset is pledged or otherwise encumbered, the legatee must also take over the associated burdens. These include not only security rights and easements but also the deceased's personal debts connected with the asset, for example a loan taken out to buy it.

2. Who is entitled to a legacy?

The deceased must direct in a testamentary disposition, such as a will or codicil, that a particular person receive a particular asset. The beneficiary is usually a third party who is not an heir, but an heir can also receive a legacy. In that case, it must be established whether it is additional to the inheritance share or to be deducted from it.

3. Who owes the legacy?

Before the estate is formally transferred to the heir by the probate court (Einantwortung), the estate owes the legacy; afterwards, the heir does. The legatee has a claim against the estate or heir and becomes owner only when it is fulfilled, for example through delivery or registration in the land register.

Free initial assessment — call now

Call +43 1 295 4251 or email office@maydell-law.at for a free initial telephone assessment.

4. When does the entitlement arise?

Legacies fall due immediately on death. However, monetary legacies and legacies of assets outside the estate can only be demanded after one year from death, unless the testator ordered earlier payment.

5. What is the deadline for claiming?

The claim to delivery of the bequeathed asset becomes time-barred three years after knowledge of the facts establishing the entitlement.

6. How can a legacy be enforced?

A legatee may bring a separate action to enforce the claim, a legacy action (Vermächtnisklage). They may also request separation of the estate, meaning separation of the bequeathed asset from the estate's assets. If the legatee lacks full legal capacity and has not received the legacy, the heir must provide security before the estate is transferred.

7. Can a legacy be reduced?

A reduction is possible in two situations.

First: an heir making a conditional declaration of acceptance limits liability to the value of the assets received. They take on the deceased's debts only up to that amount and may proportionately reduce legacies that cannot be satisfied from the estate.

Example: the deceased leaves assets of EUR 100,000 and debts of EUR 60,000. Son B is the heir; C is to receive EUR 50,000 as a legacy. If B accepts conditionally, only EUR 40,000 is payable to C, being EUR 100,000 less EUR 60,000. If the heir accepts unconditionally, the full EUR 50,000 is payable.

Second: if a person entitled to a compulsory share, such as a child limited to that share, has not received the full entitlement from the deceased, a monetary claim arises. The heir need not fund it alone and may require the legatee to contribute. This reduction right applies whether the inheritance is accepted conditionally or unconditionally.

8. What is a care legacy?

For deaths after 31 December 2016, a person close to the deceased who provided care may receive appropriate compensation from the estate. The question whether the care has already been compensated by a benefit from the deceased or an agreed payment must be considered.

Care means activity that provides the necessary support and assistance as far as possible and improves the person's ability to lead a self-determined life according to their needs. The required level is an average of twenty hours per month for at least six months within the final three years of life.

If a care legacy is claimed, the notary acting as court commissioner in probate proceedings must seek agreement on its fulfilment. If no agreement is reached, the caregiver may sue.

9. What does litigation cost, and will insurance cover it?

The cost of the claim and proceedings depends on the amount in dispute, meaning the legacy claimed. The higher this amount, the higher the litigation costs. I will be pleased to provide an individual estimate.

If you win, you are entitled to reimbursement of litigation costs by the opponent, including costs advanced.

If you have legal expenses insurance, check whether inheritance law is included. Where it is, litigation costs are covered under the policy. I can make a free written coverage enquiry for your specific case.

If you do not yet have insurance, note that policies often contain waiting periods. Depending on the terms, an insurer may refuse cover, for example if the death occurs one year after the policy began. Arrange insurance in good time.

How I can help

As a specialist inheritance lawyer, I advise and represent you on inheritance and legacy matters, including:

• enforcing inheritance rights and defending unjustified claims in contested estates in and out of court;
• estate planning, including purchase and gift agreements, gifts effective on death and waivers of inheritance or compulsory-share rights;
• drafting, registering and holding your will in safekeeping;
• advice and representation in inheritance partition proceedings — see partition actions;
• calculating compulsory shares and helping prevent disputes;
• advice on succession and acceptance declarations, and representation in probate proceedings.

Free initial assessment — call now

If you have questions or need help claiming or defending a legacy, I offer a free initial telephone assessment. Call +43 1 295 4251 or email office@maydell-law.at.

Mag. Patrick Maydell, LL.M.
Attorney at Law
Neustiftgasse 17/1/9
1070 Vienna
Telephone: +43 1 295 4251
office@maydell-law.at