Negotiating the lease in the agreement: yes or no?

Contrary to some assumptions, rent is not a lawfully binding part of the lease agreement. Nevertheless, we consider it a key part of the contract and recommend that you negotiate it in the contract. This will conserve you a lot of problems and confusion in the future. If the amount of lease is not agreed in the contract, the proprietor can claim the lease at the rate that is traditional in the local location for leasing a comparable flat or house. However, this should be shown.

Tip: Read what to remember when concluding a lease contract for a house.

How to identify the optimum rent?

Finding the perfect lease is challenging. If you do not utilize the services of a realty agent, different realty sites can be a good guide. It is very important to compare apartments with the same design, size and condition - for instance, whether they have been refurbished, how they are heated and the condition of the windows. Of course, the place, the flooring of the building in which the house is situated, whether there is an elevator, a cellar or balconies in the building also affect the price. It is also crucial whether the home is rented furnished or not.

Finding numerous homes with similar criteria will help figure out the rate range. It is a genuine goal of landlords to make as much cash as possible from the lease. However, it holds true that if you set the rate above the normal variety in the location, it will take a lot longer to find an occupant. Unless the apartment or condo has something rather extraordinary that other homes in the area do not have, it is possible that the tenant will be tempted by less expensive competitors and will soon leave, or not move in at all.

On a monthly basis when the home is empty, not only does it not bring any cash, however on the contrary, it is gotten in touch with expenditures for utilities and energy that the owner needs to pay. Therefore, it pays to find the ideal price level for the lease.

What is included in the lease?

The rent itself is characterised as a payment to the owner for using his/her flat (or e.g. non-residential space). However, the proprietor and the tenant can concur that the rent will likewise include payments for services connected to making use of the apartment, or charge these services as a flat rate outside the lease. This consists of, for example, utilities, energy or water charges. All of these payments can likewise be noted in a" record sheet", which can be an accessory to the occupancy contract.

When it comes to long-term leases, it is generally worth transferring the energies to the tenant. This gives the renter the freedom to choose the provider and a much better overview of their expenditures. A bit of administration at the beginning can conserve both parties the inconvenience of settling overpayments or underpayments.

An often-discussed payment is the payment to the so-called repair work fund. According to numerous legal interpretations, this is a payment that does not straight benefit the occupant and must not be charged. But if it is billed covertly, i.e. as part of the total lease, unfortunately the renter has little recourse.

In addition to the lease, an amount of money (frequently described as a down payment, which we have talked about in information in our article What to keep an eye out for when leasing a house) can likewise be agreed in the agreement, which the tenant pays to the landlord before the tenancy starts and which can be used in the future, for example, to pay lease arrears or to make up for damage triggered by the tenant.

Aid with the lease arrangement

By drawing up a great lease agreement, you will conserve yourself the majority of the problems, whether as a property owner or an occupant. We will draw up or check the lease arrangement, or encourage on preparing an amendment to the contract or ending the lease. We will manage whatever rapidly and flawlessly.

I want aid with a lease arrangement

- When you order, you understand what you will get and how much it will cost.
- We handle whatever online or in individual at one of our 6 workplaces.
- We manage 8 out of 10 requests within 2 working days.
- We have specialists for every field of law.

Can routine lease payments be guaranteed?

The services of companies that lease a house from the owner and after that provide it to renters for a commission have ended up being a hit over the last few years. This ensures the owner routine rent payments for the duration of the agreement and eases him of the inconvenience of discovering tenants and administration. For the property owner, this can be a really lucrative solution that conserves energy and time. However, it is essential to carefully compare offers from various providers and read evaluations before signing an agreement. This is because some business, in the experience of clients, do not always act fairly and might have a various approach to occupants than what has actually been concurred with the landlord. It is therefore crucial to study the terms and conditions thoroughly and be clear about what both parties are devoting to.

Rent increases

Rent increases can be approached in a number of methods. A popular one is to repeatedly enter into a fixed-term agreement (e.g. for one year), where the landlord presents a brand-new contract with an increased rent each time the term expires. It is then approximately the occupant whether they accept the new rate and desire to remain in the house. In such a case, the proprietor is not restricted by law in the possible price increase. However, we recommend participating in fixed-term agreements if the objective of the lease is truly short-term. If the property manager means to rent the apartment or condo for a long term, but takes the tactic of participating in shorter-term fixed-term contracts, such methods might backfire specifically since the tenants leave after a short time period and the property owner is busy repeatedly trying to find new occupants.

The property owner can unilaterally increase the lease approximately the normal lease in the area, if this is concurred in the contract.

Rent indexation to inflation

Another choice for increasing the rent is to negotiate an inflation provision. This permits for an automated boost in rent depending on inflation, generally on 1 January or on the anniversary of the lease arrangement. However, it is not possible to increase lease more regularly than when a year utilizing an inflation provision. The clause itself must refer to a specific inflation index (such as the Consumer Price Index). Naturally, the lease does not need to be increased by the complete value of inflation, however an increase can be negotiated, for instance, just if inflation increases by more than 2%, with the rent only being increased by the increase in inflation above this threshold. At the very same time, it is usually concurred that a negative increase in inflation will not affect the lease.

Agree on a greater cost

The 2 parties can likewise agree on the lease boost together and compose an addendum to the lease arrangement, for instance.

The property manager can also choose to increase the lease himself. As a rule, he or she will then communicate his/her intent in the form of a proposal for a boost, which he or she sends to the occupant. According to the guidelines laid down in the Civil Code, an increase can be proposed no earlier than one year after the last boost. At the same time, there is a guideline that the rent might be increased by an optimum of 20 % over three years. If your rent is CZK 15,000, it can be increased by an optimum of CZK 3,000 within 3 years. At the same time, there is a condition that the resulting lease does not exceed the previously mentioned normal lease in the area. The locally traditional lease can be ascertained, for example, by speaking with property firms running in the locality or a professional's report. For your own orientation, the web calculator will also assist you

However, the tenant does not have to accept the suggested boost. They can consider the proposition for 2 months and if they do not agree, the landlord can apply to the court within 3 months to have the increase authorized. The court might determine in the proceedings that the rent will be lower (or greater) than the proprietor's proposal. In case of argument, the tenant may exercise the right to end the contract by giving the appropriate length of notice.

Hint: We have actually likewise talked about lease increases in more information in our article When leas can increase.

Can the state manage leas?

After the revolution, the state likewise enforced specific restrictions on rent boosts in the kind of rent policy. Regulation was introduced in the Czech Republic until 2011. Some politicians are still thinking about the possibility of regulation as a remarkable and short-term action to prevent a sharp boost in lease prices, but no such procedure has yet taken concrete type. Recently, lease regulation has actually likewise failed in Berlin.

What is the danger of non-payment of lease?

Non-payment of rent can lead to termination of tenancy. The property owner can terminate the lease either with a standard notice period, but if the rent and energy costs have actually not been paid for a minimum of 3 months, the lease can be terminated without notice and the occupant can be required to hand back the apartment without excessive delay. In addition, non-payers of lease may also need to fret about interest on late payments and court costs if there are court proceedings.

However, it is ideal not to let the circumstance go that far and to get in touch with the tenant at the very first hold-up in paying the lease with a notice of non-payment and a need for payment of the lease due, warning of the possible consequences later on (i.e. payment of interest or later termination of the lease). Some situations can be rather minor, such as a misplaced or left out standing order, and merely providing a caution will assist fix them rapidly.

You can also discover out how to pay tax on rental residential or commercial property.

Summary

The lease contract governs the relationship between the property owner and the renter, with the key aspects being the quantity of lease, the possibilities of increasing it and the guidelines for payment of services. The proprietor can unilaterally increase the rent just in cases attended to by law, while the occupant deserves to refuse the modifications and, if necessary, obtain an evaluation by the court. Non-payment of rent can cause termination of the lease without notification. When getting in into an agreement, it is very important to clearly set out the regards to payment and to read all legal provisions thoroughly to avoid misunderstandings and disputes in between the celebrations.