Apartments of the Federal Ministry of Defence and Sports

The Federal Ministry of Defence and Sports (BMLVS) had 2,213 apartments, 689 barracks and 613 guest rooms at its disposal. The administration of the apartments was shaped by a fragmentation of competences with numerous organizational entities involved and an insufficient supervision. This rendered an efficient and effective management difficult.

In 2010-2014, the overall costs incurred by the BMLVS for the apartments surpassed the revenue by some EUR 63 million. Consequently, the BMLVS had to bear about 50% of the overall costs of some EUR 25 million per year.

When the BMLVS provided apartments to its staff, it did not offset this as in-kind-remunerations and also failed to remit income tax. The Republic of Austria therefore fell short of annual income tax revenues of some EUR 1.84 million.

The vacancy rates for the apartments rose from about 10% (2010) to about 13% (2014). In some cases the apartments remained unoccupied for up to 17 years. The expenses (rents and pro-rata operating costs) of the BMLVS for the vacant apartments accounted for some EUR 6.84 million in 2010-2014.

When it came to the dissolution of rental agreements, deficient documentation rendered it impossible for the BMLVS to assert possible claims for repayment of rental prepayments and construction cost subsidies, which, according to the estimates of the BMLVS totalled some EUR 34.11 million. Neither could the BMLVS assert any claim for compensation of investment costs.

The housing complexes of the foundation “Vereinigte Altösterreichische Militärstiftungen” (“United Old-Austrian Military Foundations”) comprised 95 rental apartments and eight business premises in the 1st, 13th and 16th district in Vienna. The average monthly rent for the foundation-owned apartments ranged from EUR 2.49/sq. m to EUR 4.80/sq. m, being clearly below the standard market practice (December 2014). The low rents resulted partly from the fact that the respective rental agreements had been concluded decades ago. The foundation, however, also failed to lay down any regulations regarding rental fees for new rental agreements.