Features of the property lease agreement

When renting a new home, it is important to thoroughly familiarize yourself with the real estate lease agreement. For this you can take a look at the specifics of this type of contract and a sample one here!

Specifics of a property rental agreement

The rental agreement is legally regulated in the Law on Obligations and Contracts (LAC), whereby the landlord undertakes to provide the tenant with an item, in this case real estate, for temporary use and the tenant to pay the landlord a certain agreed amount for the period of use. This normative act gives a wide latitude to agreements between the two parties, the only requirement being that they do not contradict good morals, morality and do not violate the law.

The contract must contain the tenant's rights

The basic rights of the tenant are related to the right to live in peace, use the belongings in the home and the right to demand repairs from the landlord when serious damage is involved.

The landlord is obliged to ensure the tenant's peaceful enjoyment of the property and, in addition, to protect the tenant from interference by third parties. This means, for example, that the landlord may not make major repairs to the dwelling or property which could interfere with the tenant's peaceful enjoyment of the property. In addition, the landlord has a duty to protect his tenant in the event of a nuisance caused by neighbours, for example.

Under the Duties and Contracts Act, major repairs are to be borne by the landlord. If there are major damages that affect the structure of the building, such as repairing the roof or replacing the plumbing or sewage system, these are borne by the landlord. Minor repairs, such as replacing broken locks, repainting walls, are at the tenant's expense.

The lease may stipulate that the Tenant has the right to terminate the lease without notice in the event that the owner fails to fulfil his obligations under it. The tenant is also entitled to compensation from the owner, which he can claim in case the tenant decides to terminate the contract before the expiry of the term for which it was concluded. In the event that the tenant's rights are violated by the landlord, the tenant is entitled to hold the landlord liable by filing a lawsuit, but this is only valid in the presence of an executed lease.

The tenancy agreement should also stipulate whether the property can be sublet by the tenant. According to the LPA, if there is no express prohibition by the landlord, the tenant may sublet the property but remains liable to the landlord for payment of the consideration.

Must also include tenant obligations

During the term of the lease, the tenant has no right to change the agreed use of the property and its purpose or use it in a manner other than agreed without the landlord's express consent given in advance or on a case-by-case basis. Furthermore, repairs and alterations to the property must always be agreed not only with the landlord but also with the relevant municipal technical departments in order to be carried out legally.

Current utility costs (electricity, water, heating, common area charges, etc.) for the use of the property are traditionally paid by the tenant. As non-payment of these can lead to serious consequences for the landlord, especially upon termination of the lease, it has become practice to provide a deposit at the time of signing the lease, which is usually one month's rent, but can be agreed otherwise. The deposit covers not only unpaid utilities but also any damage to the apartment or equipment, which have arisen during the term of the contract.

The parties have full freedom to determine the content of the contract. The only condition is that its provisions do not contradict the law. This is why specific obligations for the tenant can be included, for example: no pets in the dwelling, no smoking in the premises, good general hygiene, no other people than the tenants, etc. Specific rights of the parties may also be agreed, such as the landlord's right to inspect the property once a month.

For the security of the parties It is recommended that the contract is in writing

The law does not require a mandatory form of the lease contract - for example, written or notarial, the consent of both parties is sufficient. However, in civil and commercial relations, the written form of the lease agreement is strongly recommended in order to reduce the risks for both parties, and for greater certainty the law provides that the lease agreement may also be signed before a notary in order to be notarised. By signing the contract in front of a notary, the law guarantees the tenant the certainty, in the event of a sale of the property, that he will be able to continue to use it until the end of its term, but no longer than one year. Otherwise, without a reliable date, the contract binds the new owner as if it were open-ended - i.e. he can terminate it with one month's notice.

It is also recommended that payment terms be specifically stated in the lease agreement. For example, payment of the rent can be made from the 1st to the 5th of the month or at a time that is convenient for both parties. In this way, disputes will be avoided, the tenant will know when it is most convenient to hand over the amount due and the landlord will know when to expect it.

Additional security is provided by the other legal possibility - the contract should be entered in the Property Register of the Registry Agency. The meaning of such a legal solution is that when the lease agreement is entered in the Property Register, any potential buyer of the property can check with the Registry Agency whether there are encumbrances on the property and, respectively, to assess independently whether it is suitable for purchase.

It is advisable to draw up an acceptance protocol when handing over the property, which describes its condition. The more detailed the protocol is, the easier it is to resolve disputes later. At the termination of the contract, it is also assessed on the basis of this protocol whether the tenant returns the property in the same condition, taking into account normal wear and tear over time.

The contract must contain a rental period

In a real estate lease agreement, in order to protect its interest, the landlord should precisely define the amount, terms and method of payment of rent, the intended use of the property, in what cases there is a default of the tenant, penalties and their amount, the return of the leased property, among others.

The lease agreement may be of indefinite duration, but may be subject to a fixed term, the duration of which, pursuant to Article 229 of the LPA, may not exceed ten years, unless it is a commercial transaction. Any arrangement exceeding the maximum term would be void and the lease would be deemed to have been concluded within the duration permitted by law.

The lease shall terminate on the expiry of the term provided for therein. In the event that the tenant continues to use the property after its expiry with the landlord's knowledge and without opposition, the lease shall be deemed to have been extended indefinitely. The tenancy agreement may also be terminated by unilateral written notice, where this possibility is provided for in the agreement. If no time limit has been agreed, pursuant to Article 238 of the LPA, either party may terminate it by giving one month's notice in writing.

The termination of the contract may take place without penalty, but different penalties may be provided in different cases. Penalties may also be provided for failure to pay the agreed rent on time - for each day of delay.