Dear Mr Berger, thank you very much in advance for taking the time for this interview and thus providing interested readers with more insights into the exciting activities of the Chamber of Labour (AK) - in this case with a focus on real estate law as part of the housing team.

P2M: P2M sent you the article "Natural gas phase-out in practice? Die Leiden des jungen A." - with the request to share your experiences in this regard with the readership, based on the relevant legal precautions. How do you deal with the, largely justified, arguments such as:

• the loft space can be used for a flat conversion after all - where should the heat pump be located then;
• if I rent out the flat as the owner, I cannot simply increase the rent to make this investment pay off - despite the energy-efficient renovation;
• at my age, the investment no longer pays off;
  what?

AK/Berger: Compromises regularly have to be found when flat owners live together. There is currently no legal obligation to thermally refurbish or decarbonise multi-storey residential buildings.

Unfortunately, there is a persistent rumour that all decarbonisation measures require unanimous approval. In many cases, however, a majority vote is sufficient. For example, the existing central gas heating system can be replaced with a non-fossil central heating system by majority vote. Insulation of the building envelope can also be decided by a simple majority. However, the outvoted minority may be protected if individual flat owners are excessively affected by the measure or the costs cannot be covered from the reserves. The majority can reduce the risk that a measure cannot be covered from the reserve by deciding on an appropriate increase in the reserve.

The replacement of the existing decentralised gas boiler with a central heating system must be decided unanimously. Such measures, which actually require unanimity, cannot be implemented against the will of individual flat owners. This also makes sense within the current legal framework. It would simply be unacceptable if the majority could take away the existing gas boilers from the minority and replace them with a central heating system operated under contracting, which usually leads to a blatant increase in costs and forces the flat owners from a freely negotiable gas supply contract into a contractual relationship with a natural monopolist.

Of course, the above only applies to the current legal situation. The legal course should have been set long ago to support the decarbonisation efforts of individuals and there should also be a binding timetable for the decarbonisation of residential construction. However, both can only be implemented alongside measures to protect minorities. Ultimately, the decarbonisation of the heat supply goes hand in hand with its centralisation and, as a result, with the monopolisation of the heat supply. Mechanisms are therefore needed that provide the majority with a framework in which the minority is not unfairly affected.

The following can be said about the individual arguments put forward:

If the attic is in the accessory flat property and a single flat owner plans to develop the attic, then the heat pump will not be able to be placed in the attic. You will have to find a place in general parts of the house.

If the loft is a common part of the house and the owners are planning to extend it together, then they would be well advised to carry out the decarbonisation together with the extension in order to correctly dimension the heat supply system.
Anyone who lets for an indefinite period cannot actually raise the rent during an ongoing tenancy. However, tenants cannot be forced to replace the co-let gas boiler with a connection to a central heating system. In this respect, such measures currently require an agreement between the landlord and tenant anyway in order to change the heating system. As part of such an agreement, the rent can of course also be renegotiated.

Anyone who lets for a limited period or concludes a new tenancy agreement will receive a supplement to the standard value for thermal refurbishment and for the central heating supply in old buildings. In the unregulated area of tenancy law, the market rent for a thermally refurbished flat will be higher than for an unrefurbished flat. However, the market rent for a flat with central heating is currently unlikely to be higher than for a flat with a gas boiler because the centralised heat supply does not bring any advantage for the tenant. In fact, it is more of a financial disadvantage.

However, the aim of decarbonisation is not to save costs overall. Currently, the energy from a decarbonised central heating system usually costs more than from a decentralised gas boiler. Thermal refurbishment may bring cost savings. However, reducing emissions in existing buildings is a concern for society as a whole. Any cost savings can only be a positive side effect.

P2M: The above arguments are of an economic nature (if not pretended) - could therefore also be tackled by means of economic solutions. But how could one deal with personal sensitivities, e.g:

• at my age, I don't want to put up with the stress, construction site noise and dust caused by the building and installation work;
• my chimney sweep has told me that the heat provided by the heat pump is not sufficient at low outside temperatures and the flat remains "cold".

AK/Berger: Apartment ownership is simply not sole ownership. Compromises are therefore necessary. If the flat owners want to replace the existing gas central heating system with a central heat pump or pellet heating system, for example, they will need a majority decision. Not all condominium owners are usually in agreement with a specific refurbishment measure. However, the minority can be outvoted. There is also no obligation to always choose the most efficient heat supply system.

However, where there is interference in the personal sphere of the flat owners, for example because the gas boiler in the flat is to be replaced with a connection to the district heating system, the legal system quite appropriately provides that no flat owner may be forced into their happiness by the majority. As long as there is no protection under civil law against excessive costs in the context of district heating and contracting, it would not be socially appropriate to remove minority protection here.

P2M: The solution to the above questions will probably require extensive legal changes. This is also against the background of planning security for the homeowners' association, for natural gas network operators but also for natural gas suppliers - especially as the targeted climate neutrality by 2040 entails enormous time pressure. AK is very often involved in such complex legislative processes - how does AK/Team Wohnen view this task?

AK/Berger: In the area of tenancy law, it is primarily a question of distributive justice. If the gas boiler is replaced with a connection to a central heating system, this can lead to a significantly higher cost burden for tenants. On the other hand, arrears in the costs of central heating can lead to the tenancy being terminated, while unpaid gas bills "only" lead to the gas supply being switched off. Landlords are keen to pass on the installation costs of the heating systems to be replaced to the tenants or "at least" to be allowed to sell the air used in the heat pump to the tenants. In view of the ample rent reserves, both of these options should be rejected.

In the area of condominium ownership, a balance must be struck. If a community of owners is considering measures that are at least not economically unreasonable in terms of life cycle costs, legal relief is required. However, there are many owners' associations whose members are very diverse in terms of their decarbonisation and refurbishment ambitions and whose members are also very diverse financially. It simply must not be the case that the more ambitious higher earners decide on measures that some lower earners in the building cannot afford. It is unacceptable that the young family, which has little financial leeway apart from the loan instalments for the flat, is forced by the majority into ruinous luxury expenses.

In this respect, there is no doubt on the one hand that legislation is needed to make it easier to implement decarbonisation measures. However, this will only be socially acceptable if the "accompanying music" is right in order to avoid cases of social hardship.
The core of legislative efforts must always be to avoid cases of hardship. Ultimately, decarbonisation stands and falls with the acceptance of tenants and homeowners.

P2M: In the event of legally prescribed gas network shutdowns, natural gas condensing boilers will have to be removed - despite sufficient advance notice - and may not have been fully amortised by this time. How should this issue be dealt with and which body should deal with it?

AK/Berger: My perception of this is limited to the area of housing law, in which the change from decentralised to centralised heat supply systems will also lead to a majority decision possibly leading to the frustration of the expenses that individual flat owners have incurred for the renewal of their gas boilers.

Planning security is essential here. Anyone who knows early enough that the gas boiler has an expiry date will be able to organise their financial planning accordingly.

However, there will also be problems if there is planning security. If the owners' association decides to centralise the heat supply in December, the flat owner whose boiler breaks down irreparably in September will not be able to simply wait without heating and hot water.

Previous solutions have included the creation of a market for used gas boilers in order to minimise investment in decentralised heating systems shortly before the heat supply is switched over. It will also certainly not make sense to replace a defective calorific value appliance shortly before the heating system is converted to a condensing boiler. This requires clarification from the legislator.
In condominiums in particular, it has also been considered to place decentralised gas boilers under the maintenance obligation of the owners' association, at least for a certain period of time before centralisation, in order to minimise the financial impact on individual homeowners.

In multi-storey residential buildings, successive fossil-fuel centralisation can also make sense in the run-up to decarbonisation, as was partially carried out by Sozialbau AG, for example. Here, individual defective gas boilers can be replaced by connecting them to a gas boiler located in general areas, to which those flats whose gas boilers become irreparably defective are subsequently connected.

This minimises investment in the existing gas infrastructure.

P2M: The AK/Team Wohnen will certainly provide valuable input in the "climate neutrality in residential property" process - both in relevant tenant/owner matters and in the legislative process. Due to the increasing complexity of the relevant working group tasks, the question of resources and motivation will certainly arise at some point. How could the AK/Housing team deal with these challenges?

AK/Berger: If something is important, then you find time for it. In recent years, the AK has been intensively involved in the negotiations on the Renewable Heat Act and in the working group at the Ministry of Justice on setting the course for decarbonisation under housing law. We would like to see more progress in the area of housing law in particular. The legal objective must be to create a legal framework that is as clear as possible, which subsequently leads to as little potential for conflict as possible and avoids a flood of court proceedings.

Of course, it would be illusory to think that decarbonisation will take place without legal disputes. The AK will therefore continue to provide every member with information about the legal framework under housing law. In Vienna, this has been done since 2019 as part of a housing law hotline. It is possible that individual housing law issues in connection with decarbonisation will also have to be clarified in court as part of test cases and association proceedings.

However, the main technical issues will have to be resolved by others.

P2M: Thank you again for the interview and for your valuable time.