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Everything about the Lease – How to Draft a Good Lease Agreement

Are you planning to rent a flat? Do you own a building to rent out? Would you like to to rent out a freehold flat? Whether you are a tenant or landlord, in this article you will find everything a good lease agreement should include to prevent disputes or misunderstandings that could otherwise easily lead to a legal dispute. We will also touch on the leasing of commercial premises, cottages, land, garages or vehicles.

Vše o nájmu aneb jak napsat nájemní smlouvu
9 minutes of reading
17. 11. 2021

Property leases in general

Property leases are becoming increasingly popular, as renting out flats is considered a secure investment; More and more people, on the other hand, seek a long-term lease for themselves as well. Landlords are keen to keep an eye on their property while making a profit. On the contrary, tenants desire a cheap home with as much freedom as possible. A lease is a legal document that allows another person use a particular object for an agreed sum. Although Czechs generally incline towards owning property, renting a home still represents an increasingly sought-after (or sometimes the only available) possibility. When leasing a flat, renting a house or even subletting a room, it’s important to proceed with caution. It is definitely not advisable to enter into a lease without a written agreement, even if the landlord is a relative whom you have known for a long time.

What should a good contract of flat lease include

The law states that a lease should always be in writing. Do incorporate the following:

  • 1) Identifying the parties: The lease agreement must include the name or specification of both the lessor and lessee. These should be attested to by the notary, especially when dealing with strangers. Moreover, it should include the permanent residence of both parties, ideally along with their national identification number or the number of their ID. A means of contact, such as an e-mail address, might prove useful as well.
  • 2) The object of the lease:  The more specific you are here, the better. You ought to include the data from the Land Register, i.e., the parcel number, which floor the flat is on, the surface area and the layout. Tenants should ask the owner to show them the title.
  • 3)  The exact amount is among the key points here. Both the tenant and landlord should familiarize themselves with the usual price in the location. Furthermore, the amount depends on whether it includes, e.g., sewer charges, the cleaning of the building, gas advances, etc. Also, don’t forget about the due date. You may want to specify the time period or method of payment as well.
Průměrná cena za m2
Average flat rent price per square metre in the last quarter of 2021 – taken from Aktualne.cz — Zdroj Aktualne.cz

Tip: Read about prolonging the lease agreement.

  • The period of the lease: It’s crucial to state this in your contract, because if you fail to do so, the lease automatically becomes an indeterminate term.
  • Other rights and obligations of the lessor and lessee: This is a potentially problematic part of what a lease should contain. If you think along the lines of “a simple lease agreement, what could possibly go wrong?,” you couldn’t be further from the truth. A good flat lease agreement should specify the state of the flat and its equipment in great detail – for instance, you may wish to append photographic documentation, the list of the flat equipment, the numbers on the gauges or the number of the keys provided. Often, people forget to agree on who will paint the flat. The contract can also include contractual fines.
  • Termination of the lease:Both parties should negotiate whether the lease shall be terminated upon a particular date or if the term will be indeterminate. Especially in the latter case, the terms of ending the contract need to be stipulated.
  • Final provisions: Don’t forget about the signatures and the date of enforcement.

Tip: Read about when the landlord may raise the rent.

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Garage rental or a long-term cabin lease

Naturally, various kinds of leases exist, such as garage rental or cabin lease or cottage lease. The same legal requirements apply when you rent (short-term or long-term) a recreational object as in the case of a flat or house.

You should by all means negotiate how any eventual damage will be dealt with, as well as the services or firewood. It is best to include all conceivable details: the deposit, the cleaning, the maximum capacity of the building, and so on.

Renting out a cabin or cottage may represent an interesting investment, as may garage rental, providing you own one in a sought-after locality. Quite often, a garage will stand on a plot owned by a third party, typically the municipality or a physical person. The same goes for some cabins. If that’s your case, you will naturally need to incorporate this into the contract, usually by signing an agreement to lease the land under the structure.

Letting a coop flat – the contract of subletting a cooperatively-owned flat

So far, we have been discussing the lease of a freehold flat. But how to rent out a coop flat? If you have one, or in other words, if you are a member of the cooperative, you yourself have entered into a lease with the cooperative, because you don’t own the flat.

If you live elsewhere and are considering renting it out, you are indeed entitled to do so in most cases. Although, technically speaking, you will be subletting it. Before anything else, check your coop statutes and find out if they allow for this. It might sound surprising, but this is where you can normally find this kind of information. If you don’t, you will need the authorized representative’s permission.

Smlouva o podnájmu bytu
Flat subletting agreement and how to deal with it

Flat subletting agreement

Unlike a lease, a (room) subleasing agreement isn’t bound by any particular set of rules, as the law doesn’t state any legal requirements in this respect. Therefore, if you are looking for a subletting contract template,  look no further – it’s only up to the tenant and subtenants or lodgers to hammer out a deal.

Generally, both parties should define their rights and obligations in as much depth as possible, so as to prevent eventual disputes. The subleasing contract should specifically delimit the sublet flat or its part, the rent and due date, as well as services included.

And how to sublet non-residential premises?

In the new civil law, the term non-residential premises has been replaced by commercial premises, which applies to any space or room the purpose of which is to conduct business and which is predominately used as such, regardless of how the contract defines its purpose.

We will aid you in renting your property

Do you require assistance when renting a flat or drafting a lease? Contact us now; we have many years of experience in renting out property. We will gladly use our experience to help you with whatever you may need.

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Renting out non-residential premises, land lease

How to rent non-residential property? How to handle a commercial premises lease or to rent an office? Different laws apply here when compared to the lease of a home. If the tenant conducts a business within the rented premises, the lease falls under the laws regulating the lease of commercial premises.

What are the differences?

For example, different lengths of notice or rules of contract negotiating. Landlords should bear in mind that they are obligated to compensate the tenant for taking over their customers upon contract termination. However, this can be stipulated in the agreement.

It’s crucial to negotiate the contract with great care, especially when defining the purpose of use. Any commercial premises lease should state that the rented space may be used for the purposes of specific business activities, as the tenant should avoid using the space it for any other purpose (or a completely different field) than that specified within the agreement.

What’s the usual price of commercial premises? Both parties are advised to familiarize themselves with the usual price for a non-residential premises lease. Price maps of individual towns may prove invaluable here, as they sort the prices according to particular localities. The premises in or near the town centre tend to be the most expensive.

Tip: What about taxes? Read this article about taxes on rental income.

Nájem zemědělské půdy nebo nájem pozemku

You may not need a standard lease agreement at all when dealing with an agricultural land lease or land lease, as these fall under the so-called leaseholds. A leasehold is an obligation where the lessor allows the lessee to use and exploit the object.

The key word here is exploit. Why? The lessee is entitled not only to use and take care of the rented property, but also to keep its yields. For example, you might be familiar with a farmland lease or a pond lease. A leasehold deed is often employed in agriculture, but may as well prove itself useful when renting a quarry, restaurant or spring

A new landlord

A new landlord alone doesn’t represent a sound enough reason for the termination of a flat lease or any such agreement. It holds true, however, that some lease terms may be subject to change. To illustrate, the new owner isn’t bound by extra-legal contract terms that were negotiated with the original landlord and of which they weren’t aware. In other words, if the tenant managed to negotiate some terms above standard, they ought to demonstrably notify the new landlord of them in advance, lest they become void. The original lease agreement should suffice for this purpose.

What does the law state regarding a transfer of a lease agreement? This is indeed possible, practical and in accordance with the law. The landlord may transfer the lease to a third person if they wish to delegate the responsibilities connected with it. This third person then assumes the role of the landlord; however, the tenant’s approval is necessary.

Vehicle rental agreement

Although we have been discussing the lease of homes, land or commercial premises so far, various other objects can be rented as well. Let’s consider a vehicle rental agreement for instance, as many companies employ its specific type, called operational leasing. Along with the vehicle itself, the lessor is to hand over any and all necessary documents.

The vehicle must be eligible for operation and regular use. If it is not, the lessee can either accept it as is, or demand the fault be removed. Furthermore, the lessee is bound to keep the vehicle in the condition it was in when they accepted it, with respect to the usual wear and tear.

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Author of the article

medailonek-preuss

JUDr. Ondřej Preuss, Ph.D.

Ondřej is the attorney who came up with the idea of providing legal services online. He's been earning his living through legal services for more than 10 years. He especially likes to help clients who may have given up hope in solving their legal issues at work, for example with real estate transfers or copyright licenses.

Education

  • Law, Ph.D, Pf UK in Prague
  • Law, L’université Nancy-II, Nancy
  • Law, Master’s degree (Mgr.), Pf UK in Prague
  • International Territorial Studies (Bc.), FSV UK in Prague

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