The rent is one of the most important parts of the lease agreement. We will therefore focus on it, especially from the landlord’s perspective. Before signing a lease agreement, it is necessary to think carefully about how and in what amount to negotiate it and whether and how to increase it in the future. If you have already signed a contract but the tenant refuses to pay, we can advise you on how to proceed.
Contrary to some assumptions, rent is not a legally 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 save you a lot of complications and confusion in the future. If the amount of rent is not agreed in the contract, the landlord can claim the rent at the rate that is customary in the local area for renting a similar flat or house. However, this must be proven.
Tip: Read what to remember when concluding a lease agreement for an apartment.
Finding the ideal rent is not easy. If you do not use the services of a real estate agent, various real estate websites can be a good guide. It is important to compare apartments with the same layout, size and condition – for example, whether they have been renovated, how they are heated and the condition of the windows. Of course, the location, the floor of the building in which the apartment is located, whether there is an elevator, a cellar or balconies in the building also influence the price. It is also important whether the apartment is rented furnished or not.
Finding several apartments with similar parameters will help determine the price range. It is a legitimate aim of landlords to make as much money as possible from the rent. However, it is true that if you set the price above the normal range in the area, it will take much longer to find a tenant. Unless the apartment has something quite exceptional that other apartments in the area don’t have, it is possible that the tenant will be tempted by cheaper competition and will soon move out, or not move in at all.
Every month when the apartment is empty, not only does it not bring any money, but on the contrary, it is connected with expenses for utilities and energy that the owner has to pay. Therefore, it pays to find the right price level for the rent.
The rent itself is characterised as a payment to the owner for the use of his/her flat (or e.g. non-residential space). However, the landlord and the tenant can agree that the rent will also include payments for services related to the use of the apartment, or charge these services as a lump sum in addition to the rent. This includes, for example, utilities, energy or water charges. All of these payments can also be listed in a ” record sheet”, which can be an attachment to the tenancy agreement, for ease of reference.
In the case of long-term leases, it is usually worth transferring the utilities to the tenant. This gives the tenant the freedom to choose the service providers and a better overview of their expenses. A bit of administration at the beginning can save both parties the hassle of settling overpayments or underpayments.
An often-discussed payment is the payment to the so-called repair fund. According to many legal interpretations, this is a payment that does not directly benefit the tenant and should not be charged. But if it is billed covertly, i.e. as part of the total rent, unfortunately the tenant has little recourse.
In addition to the rent, a sum of money (commonly referred to as a security deposit, which we have discussed in detail in our article What to look out for when renting an apartment) can also be agreed in the contract, which the tenant pays to the landlord before the tenancy starts and which can be used in the future, for example, to pay rent arrears or to compensate for damage caused by the tenant.
By drawing up a good lease agreement, you will save yourself most of the problems, whether as a landlord or a tenant. We will draw up or check the lease agreement, or advise on drawing up an amendment to the agreement or terminating the lease. We will handle everything quickly and flawlessly.
I want help with a lease agreement
The services of companies that rent an apartment from the owner and then offer it to tenants for a commission have become a hit in recent years. This guarantees the owner regular rent payments for the duration of the contract and relieves him of the hassle of finding tenants and administration. For the landlord, this can be a very profitable solution that saves time and energy. However, it is important to carefully compare offers from different providers and read reviews before signing a contract. This is because some companies, in the experience of customers, do not always act fairly and may have a different approach to tenants than what has been agreed with the landlord. It is therefore key to study the terms and conditions thoroughly and be clear about what both parties are committing to.
Rent increases can be approached in several ways. A popular one is to repeatedly enter into a fixed-term contract (e.g. for one year), where the landlord presents a new contract with an increased rent each time the term expires. It is then up to the tenant whether they accept the new price and want to stay in the apartment. In such a case, the landlord is not limited by law in the possible price increase. However, we recommend entering into fixed-term contracts if the intention of the lease is really short-term. If the landlord intends to rent out the apartment for a long term, but takes the tactic of entering into shorter-term fixed-term contracts, such tactics may backfire precisely because the tenants leave after a short period of time and the landlord is busy repeatedly looking for new tenants.
The landlord can unilaterally increase the rent up to the normal rent in the area, if this is agreed in the contract.
Another option for increasing the rent is to negotiate an inflation clause. This allows for an automatic increase in rent depending on inflation, usually on 1 January or on the anniversary of the lease agreement. However, it is not possible to increase rent more frequently than once a year using an inflation clause. The clause itself should refer to a specific inflation index (such as the Consumer Price Index). Of course, the rent does not have to be increased by the full value of inflation, but an increase can be negotiated, for example, only if inflation rises by more than 2%, with the rent only being increased by the rise in inflation above this threshold. At the same time, it is usually agreed that a negative increase in inflation will not affect the rent.
The two parties can also agree on the rent increase together and write an addendum to the lease agreement, for example.
The landlord can also decide to increase the rent himself. As a rule, he or she will then communicate his or her intention in the form of a proposal for an increase, which he or she sends to the tenant. According to the rules laid down in the Civil Code, an increase can be proposed no earlier than one year after the last increase. At the same time, there is a rule that the rent may be increased by a maximum of 20 % over three years. If your rent is CZK 15,000, it can be increased by a maximum of CZK 3,000 within three years. At the same time, there is a condition that the resulting rent does not exceed the aforementioned normal rent in the area. The locally customary rent can be ascertained, for example, by consulting real estate agencies operating in the locality or an expert’s report. For your own orientation, the web calculator will also help you
However, the tenant does not have to agree to the proposed increase. They can consider the proposal for two months and if they do not agree, the landlord can apply to the court within three months to have the increase approved. The court may determine in the proceedings that the rent will be lower (or higher) than the landlord’s proposal. In case of disagreement, the tenant may exercise the right to terminate the contract by giving the appropriate length of notice.
Hint: We have also discussed rent increases in more detail in our article When rents can increase.
After the revolution, the state also imposed certain restrictions on rent increases in the form of rent regulation. Regulation was introduced in the Czech Republic until 2011. Some politicians are still considering the possibility of regulation as an exceptional and temporary step to prevent a sharp increase in rent prices, but no such measure has yet taken concrete form. Recently, rent regulation has also failed in Berlin.
Non-payment of rent can lead to termination of tenancy. The landlord has the right to terminate the lease either with a traditional notice period, but if the rent and utility costs have not been paid for at least three months, the lease can be terminated without notice and the tenant can be required to hand back the apartment without undue delay. In addition, non-payers of rent may also have to worry about interest on late payments and court costs if there are court proceedings.
However, it is ideal not to let the situation go that far and to contact the tenant at the first delay in paying the rent with a notice of non-payment and a demand for payment of the rent due, warning of the possible consequences later (i.e. payment of interest or later termination of the lease). Some situations can be quite trivial, such as a misplaced or omitted standing order, and simply giving a warning will help resolve them quickly.
The tenancy agreement governs the relationship between the landlord and tenant, with the key aspects being the amount of rent, options for rent increases and the rules for payment of services. The landlord can only unilaterally increase the rent in cases provided for by law, while the tenant has the right to refuse the changes and, if necessary, apply for a judicial review. Non-payment of rent can lead to termination of the lease without notice. When entering into a contract, it is important to clearly set out the terms of payment and to read all contractual provisions carefully to avoid misunderstandings and disputes between the parties.
We provide a complete package of services for both landlords and tenants. We will draft or review all lease/rental contracts, help with extension or termination of lease, and make sure everything takes place smoothly and without legal complications. You’re also welcome to pay after services are provided.
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.
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