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Possible ways of lease termination
Let’s suppose you urgently need to move, for example, because you got a new job and have to end your current lease. You have several options: Either you’ve remembered to include in the lease the option for both parties to terminate by notice, or you manage to come to an agreement with your landlord. All things failed, you’ll have to resort to the tenant’s notice to terminate.
Let’s have a closer look at the conditions the law sets for tenants wishing to terminate the lease as well as for lessors who need to evict their tenants, for example because they haven’t been paying the rent for months and their debt has reached an astronomical sum. We will also touch on cases occurring less frequently than problems with tenants, namely the commercial premises lease termination and the termination of land lease.
Immediate notice – what requirements must be met
The civil law covers the notice of lease termination and defines some relatively clear and detailed rules. The notice isn’t to be confused with a request to end the lease. The other party’s approval isn’t required, as this falls under ex parte legal transactions. For the same reason, however, it does need to go strictly by the book. Firstly, it must come in writing; the lease cannot be terminated by a phone call or viva voce. Secondly, the notice must identify both contract parties as well as state the house and/or flat number. It is highly recommended to send it as a certified delivery, so as to ascertain that it has indeed reached the addressee.
And last but not least, it’s essential to formulate it in accordance with the type of contract you have: Indeterminate or fixed-term.
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Indeterminate term notice
The indeterminate term lease may be terminated at any time without cause, with a 3-month period of notice. This period begins on the first day of the month subsequent to the delivery of the notice to the lessor. But what about the fixed-term lease?
Fixed-term notice
A fixed-term lease naturally ends on the given date. The difference from the indeterminate term is that you may not end the lease without stating a sound reason unless you have negotiated the early termination in your contract. Simply, neither party is allowed to end the lease without cause. A frequently-occurring reason for lease termination is a change of circumstances – the tenant may be moving to another town, might start suffering from a condition preventing them from continuing the lease, etc.
The civil law is somewhat vague in this regard. It states that the tenant may terminate the lease before the agreed upon date providing the circumstances upon which both parties entered into the contract have changed to such a degree that it would be unreasonable to insist on the tenant to stay.
You may easily find yourself in a dispute with the landlord here, as the law doesn’t define what reasons are sound enough.
Tip na článek
Tip: The best solution by far would be an agreement of lease termination.
Notice upon contract breach by the lessor
The tenant can request an early termination of the fixed-term lease if the landlord has breached the contract. One typical example of this would be when the flat is in such an urgent need of repair that would render it uninhabitable; another would be when the landlord neglects their obligations to an extent that results in considerable damage to the tenant.
Moreover, the tenant is entitled to end the lease if a regulation or authorities’ decree prevents them from occupying their home. This can involve a wide range of situations, but typically occurs when inhabiting the flat would jeopardize the tenant in some way (chemical infestation, a structurally unsound building, etc.).
The landlord’s rights regarding the notice of a fixed-term lease
The law entitles the lessor to terminate the fixed-term lease by notice only for the following reasons:
- The tenant breaks an obligation in the lease, for instance, they cease paying the rent,
- the tenant is sentenced for a wilful offence against the lessor or a member of their household,
- the home is to be vacated for public interest, such as demolishing the building to make room for a new bypass.
By being explicit about the reasons, the law aims to protect the tenant as the weaker of the contract parties.
When may the landlord terminate an indeterminate term lease?
If it’s the landlord who wishes to terminate an indeterminate term lease, again they’re allowed to do so only for the reasons stated by law. These are identical to the ones described in the chapter on the fixed-term lease, with one addition: the landlord may give notice if they want to move into the flat or house themselves or if they are divorcing and holding it for their spouse.
The same applies to the owner’s relatives, e.g., children attending university who need housing. The relatives really ought to move in, as a merely pretended “need” may easily lead to claiming damages and challenging the lawfulness of the notice as such.
Notice of commercial premises lease
The lease of commercial premises, or the lease of non-residential premises if you will, terminates upon the reasons stipulated in the agreement. Both parties are therefore strongly recommended to negotiate them with great care. However, if the agreement fails to specify the reasons for terminating a non-residential premises lease, the law comes into play, just as it does with flat leases.
In addition, the law allows the tenant to terminate a fixed-term lease of commercial premises if these cease to be eligible for their purpose. For instance, the tenant may suddenly find themselves unable to carry on conducting their business therein due to a change in legal regulations.
Both parties may wish to terminate the lease based on the fundamental change of circumstances clause, based on which virtually any circumstance qualifies. We therefore emphasize the necessity of negotiating the particular grounds for the notice in the contract.
What to do after ending a flat lease
No matter how the lease is terminated, you’re obligated to return possession of the flat to the landlord. How to go about this final step? The tenant must hand over possession of the flat on the day of termination. Failure to do so entitles the landlord to a reimbursement amounting to the agreed upon rent for as long as the flat remains occupied.
Although the law doesn’t require the involved parties to draw up a handover protocol, we strongly recommend it. The protocol should contain the description of the flat’s state, the numbers on the gas, water and electricity meters (if installed), and the list of the flat equipment along with its condition.
The parties are free to document the flat condition by photos. And if you’re a landlord, don’t forget to return the deposit and to provide the tenant with the final account of the services.
