We are ready to assist and to draft a lease contract according to your specific case with maximum protection of your interests regardless of whether you are a landlord or a tenant. The information presented in the article below will help you to learn more about the rental contracts and possible legal risks associated with its conclusion.

RENTAL CONTRACT

The rental contract for renting a real estate property regulates the temporary usage of a property by a person who is not the owner of the property against the obligation to pay the rental price for it. Rental issues are regulated by the Contracts and Obligations Act (COA).

The present article is not related with the renting of agricultural land as this matter is regulated by a special law.

There is no legal requirement the rental contract to be prepared in a written form but our advice is such contract always to be in a written form, and to stipulate the rights and obligations of the landlord and the tenant.

Art. 229 of the COA impose a limit on the term of the lease, such as maximum term can not exceed 10 years term.

The interests of the landlord are mainly related with two issues: the first one is the rental price and all the bills (the utility costs) to be paid on time, and the second one is upon termination of the contract the property to be returned in the same condition as it were at the moment of its renting.

Art. 233 of the COA explicitly states that if there is damage for which the tenant is responsible, he owes compensation to the landlord.

The interests of the tenant are mainly related with the peaceful and undisturbed usage of the leased property. These interests can generally be violated due to the following reasons:

  • The landlord refuses to remove damages that are not due to the ordinary usage of the property /art.231 expressly provides this obligation of the landlord/. We from ID Law Office advise our clients /landlords and tenants/ when they are renting property always to sign an acceptance-delivery protocol that states what the current condition of the property is and that contains and the appliances.
  • Change of the ownership of the leased property due to that fact the new owner can remove the tenant from the property. The only option the contract to remain in force for the new owner is if the contract is registered at the land registry. In order the contract to be registered it should have notarized signatures of the parties and its term should be longer than one year. Even if the contract is not registered at the land registry, according to art.237 of the COA: The rental contract concluded before the change of the ownership of the same if it has a valid date is obligational for the new owner for the term for which it is concluded but for no more than one year from the transferring of the ownership. If the contract does not have a valid date and the tenant is in possession of the property then the contract is obligational for the new owner following the requirements and under conditions of a contract for rent concluded for indefinite term.
  • Changing of the ownership due to compulsory executive actions against the owner and public sale of the property. If there are explicitly regulated consequences related with the standard sale, such are missing in regards with the sale through a public auction. The court practice is also not unambiguous. Our law office faced court decisions which are equalizing the public auction /sale/ to a standard sale, as well as decisions motivated that due to the fact that buying of a property at a public auction is not a primary method /way/ of acquiring property, therefore the concluded rental contracts are valid.
  • Termination of the rental contract. If the contract is without fixed term, each of the parties can terminate it with one month written notice send to the other party. If the contract has a fixed term (and the consecutive court practice also states that) the parties do not have the right to terminate the contract unless there is a clause in it giving such right to the party to terminate it before the term set. The tenants should be aware that if there is not a certain clause in the contract regarding the termination – a contract with a set/fixed/ term cannot be terminated by the landlord before the term set.
  • Transfer of possession. This problem may arise for the tenant upon receiving of the possession of the property, as well as for the landlord upon termination of the contract and returning of the possession from the tenant to the landlord.
  • Inability to use the property as intended – according to its purpose. For example, if the property presents secondary/agricultural buildings which usage is specified and determined by a specialized license/permission regime – in that case in the contract should be specified that the landlord is obliged to cooperate fully to the tenant in regards with obtaining of these licenses/permissions. Our law office has had a case related with renting of a hotel and for the issuance of the different licenses /on behalf of the tenant/ it was required the landlord to give a certain assistance and give his consent. The situation is the same with regards to renting a residential property by foreigners who have to apply for residency at the migration offices and who need a certified declaration from the landlord. If such obligation for assistance of behalf of the landlord is not part of the rental contract this may cause a serious problem for the tenant.

All the above said means that the rental contract should not be considered as a blank /formal/ contract which requires just filling of the parties details, description of the property and the term but as a contract that requires serious attention, legal care and in-depth individual approach.

We offer services related with consultations and drafting of rental contract conformable to each individual client’s case and protecting the best interests of our client.

The present article is not a legal consultation but presents a summarized theoretical development of a certain legal sphere. ID Law Office is not liable in the event of a misunderstanding of the information contained in this article.

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