2024-05-10 18:11:05
Rented housing has long been of little interest to Czechs. However, rising housing prices and the availability of mortgages exacerbated by high interest rates have made it increasingly popular in recent years. Regardless of the extreme interest of local investors to appreciate money through real estate.
Even though there are countless models of rental agreements circulating on the Internet today, it is not easy to write one that will eventually stand up in court. Because there are many myths and half-truths about rentals.
The requirements for the content of the contracts and the related expectations differ for lessors and lessees, as each of the parties to the rental relationship always expects the least possible risks and at the same time the most advantageous position. However, the sometimes unfulfillable expectations of the contracting parties must be corrected in practice. The basic guardrails are provided by the legal regulation itself, which protects the tenant, namely by provisions from which the contracting parties cannot deviate.
The law in this case speaks of “disproportionately curtailing the lessee’s rights“. If the contracting parties agree on a contract contrary to these provisions, it will not apply to the tenancy relationship despite the written provision. On the contrary, if the contracting parties agree on a stricter provision to the detriment of the lessor (for example, by agreeing on more favorable termination grounds for the tenant beyond the scope of the law) , these provisions will be enforceable.
General provisions of contracts
When taking over (and subsequently handing the apartment back to the lessor at the end of the lease), it is advisable to obtain a handover report and photo documentation of the apartment, including marking of defects. The properly completed handover report and photo documentation are essential especially for determining responsibility for any damage to the apartment and its equipment.
Leases often contain inflation clauses, authorizing the landlord to increase the rent by the rate of statistical inflation recorded in the previous year. At the same time, however, the rent can be increased in cases defined by law even outside the inflation clause, or by agreement of the contracting parties.
A common issue in rental agreements is also the negotiation of contractual fines, most often in case of late payment of rent or in case of late handover of the leased object to the tenant by the lessor or return of the leased object to the lessor by the tenant. Negotiating contractual fines is permissible in the rental agreement, but not absolutely (restrictions, for example, on the amount or adequacy and the above-mentioned “by disproportionately curtailing rights“).
The lessee is also entitled to receive a proper bill from the lessor (subject to a penalty of CZK 50 for each day of delay in fulfilling the obligation on the part of the lessor) and, upon termination of the lease, interest on the security deposit (despite the possible exclusion of interest on the security deposit in the lease agreement). It is necessary to think about this, whether from the point of view of the tenant or the landlord.
What to look out for as a tenant
The first thing a tenant should check before signing a lease is the landlord’s authorization to enter into a lease. This can easily be done, for example, by looking at the title deed in the land registry.
In the case of exclusive ownership, there is no problem, in the case of an apartment in joint ownership or joint property of the spouses, it is necessary that all owners conclude the contract, or the lessor has a power of attorney from the others to conclude the contract. At the same time, the tenant should check the approval of the apartment, i.e. whether it is really an apartment intended for living.
Another important fact from the tenant’s point of view is the length of the lease and the possibility of terminating it. In general, it is not possible to say whether it is more appropriate for the tenant to conclude a contract for a fixed or indefinite period. It will always depend on the circumstances and specific needs of the tenant. A fixed-term lease represents to a certain extent greater certainty in the length of the contract, as a fixed-term lease can be terminated unilaterally only in strictly defined cases (unless otherwise agreed).
On the other hand, it may happen that the tenant, for various reasons, such as a change of job, wants to terminate the contract before the end of the agreed rental period. In the case of a fixed-term lease, this is only possible in limited cases. A lease for an indefinite period is thus much more flexible, both for the tenant and the landlord.
However, the option to terminate the contract with a notice period may not be desirable for the tenant (for example, due to the need to move and arrange a new home after a few months of the lease). Provisions that give lessors unlimited options to terminate the contract are disregarded in any case.
Tenants should also know their rights, which the landlord cannot abridge, despite the fact that these provisions appear very often in contracts. The lessor is not authorized by the lease agreement to limit the tenant’s business or animal husbandry in the apartment (with the exception of cases where this activity is incompatible with the nature of the apartment and excessively burdens other tenants of the apartment building) or to prohibit the tenant from reporting permanent residence.
From the point of view of payments connected with the supply of services to the apartment, the tenant should take care of what he has according to the lease agreement, as he is not obliged to pay such items that the landlord is obliged to pay without further ado (despite the fact that in practice this obligation is transferred by landlords per tenant). These are mainly fees connected with the management of the house or the repair fund.
Main interests of the lessor
From the point of view of lessors, we can include among the key provisions of lease agreements, in particular, those that protect the property of the lessor. In contracts, lessors try as best as possible to ensure the payment of rent and any advance payments for services, payment of any damages or conditions for possible termination of the rental relationship with the tenant.
Before concluding the contract, it is advisable to check the payment morals of the potential tenant. For this, it is advisable to use public registers (for example, the insolvency register) or look into the register of paid persons, such as the register of executions.
The basic means of protecting the lessor’s property is a guarantee – the so-called deposit – which the lessee pays the lessor when concluding the contract. The guarantee is used to cover outstanding payments and incurred damages. The security deposit can be up to three months’ rent. At this point, it is necessary to point out that if a security deposit and a contractual penalty are required from the landlord, their sum cannot exceed the above-mentioned limit of three times the rent.
The lessor may also require the lessee to take out liability insurance, in addition to their property insurance.
Usually, the lessee is obliged to provide routine maintenance and minor repairs, while the scope of individual obligations is determined by government regulation. In practice, it is possible for the lessor to take over the responsibilities associated with maintenance and repairs to a greater or complete extent. However, the opposite procedure is not possible.
As part of prevention, the lessor is entitled to limit the number of people who use the apartment, in such a way that the possible use of the apartment by the tenant corresponds to hygiene regulations and the needs of individual people. In practice, this prohibition is most often approached with explicit consent to the acceptance of another person into the tenant’s household. However, even this prohibition is not absolute, as it must not interfere with the tenant’s right to family.