How to rent an apartment safely from a landlord’s perspective

Chapters of the article

1. Check if your potential tenant owes money
2. Flat lease and handover report – what to look out for?
3. Using a sublease agreement
4. The new option of contractual penalties
5. Landlord’s rights and obligations
6. What about permanent residency?
7. How to terminate a tenancy agreement?

1. Check if your potential tenant owes you money

Late payments, unpaid rent and, in the worst case scenario, a visit from a bailiff to the flat. These are all risks if the tenant is in debt in any way. That is why we always recommend that you check out every possible prospective tenant. Registers and lists of debtors are often publicly available. How and where to check a tenant:

• insolvency Register,
• thecentral debtors’ register,
• thecentral register of foreclosures,
• central register of notices,
• one of the registers within the SOLUS interest group,
• theregister of claims (here entrepreneurs are registered).

At first glance, this may seem like nonsense, but be sure to try searching for a potential tenant via Google. This way you can easily find out in what context his name appears – whether it’s just work and study achievements or, on the contrary, negative references on social networks or elsewhere.

You can also ask other questions of the prospective buyer themselves. Although you’re not guaranteed a true answer, you can already tell a lot from their reactions and behaviour. Ask about employment, reasons for looking for a rental, previous living arrangements or even hobbies.

The response to a request for a security deposit, which is more commonly known as a refundable deposit, will also tell you more about the potential tenant’s ability to pay. You should always ask for this to protect the furnishings of the apartment. It can be up to a maximum of three times the monthly rent and can be used to pay for outstanding utility bills or costs associated with damage to the furnishings in the event of any problems.

2. Apartment lease agreement and handover protocol – what to look out for?

If you have selected a suitable buyer for your apartment, the lease agreement becomes a key document. This should include:

• identification of the subject of the lease (i.e. the flat or house),
• information about the duration of the tenancy,
• the amount and method of payment of rent and service charges,
• the amount and method of payment of the security deposit,
• the rights and obligations of the contracting parties,
• information on contractual penalties – from 1 July 2020, penalties resulting from breaches of rights and obligations by the tenant may be included.

Along with the lease agreement, it is advisable to prepare a handover report with information on the condition of the apartment and its equipment. The protocol then protects both parties in case of later disputes.

We have discussed the lease agreement and the handover protocol in more detail in our previous article, which focused on the lease of an apartment from the tenant’s perspective.

3. Use of the sublease agreement

We would already have the lease, but what about the sublease? A sublease gives the tenant the right to give the flat or part of it to another person. It is not between the landlord and the tenant, but between the tenant and the subtenant, who can also use the apartment on the basis of the sublease. Generally, the owner of the flat must give his consent to the subletting. However, if the tenant lives permanently in the apartment, he or she can sign a sublease agreement without the owner’s prior consent.

The subtenant has significantly fewer rights than the tenant. The sublease agreement also automatically expires when the lease expires. For this reason, some landlords use various tricks and rent out their flat through relatives or close friends to third parties on the basis of a sublease agreement. However, it should be mentioned that such a practice can be controversial.

Pohovka v pronajatém bytě

4. New option of contractual penalty

We have already mentioned that as of 1 July 2020 it is possible to include any contractual penalties in the lease agreement. Until the amendment to the Civil Code, contractual penalties were illegal. Now, the landlord is entitled to include contractual penalties, but the amount remains limited. It is stipulated that the sum of the contractual penalties and the security deposit may not exceed three times the monthly rent.

The most common contractual penalty encountered in practice is a penalty for damage to the apartment or its furnishings. It may also be a fine for breach of the obligation to return the apartment to its original condition before the end of the lease (e.g. painting, etc.).

However, it always depends on the landlord’s original agreement with the tenant, which must be addressed in the lease agreement. In order to avoid disagreements later, it is advisable to specify all the details precisely (e.g. when to redecorate – always or only when the colour of the redecoration changes, etc.). At the same time, the contractual penalty should be a reasonable amount, ideally in line with the costs the landlord will have to incur to rectify the problem.

5. Landlord’s rights and obligations

Not only the tenant, but also the landlord has several obligations. Here are the most important ones:

• Prepare the apartment and hand it over to the tenant – the first basic duty that a landlord has after signing a lease. The apartment must correspond exactly to the description and conditions agreed in the contract and be in a condition for immediate occupancy (unless otherwise agreed in the contract).
• Provide the services necessary for the use of the flat – together with the provision of the flat, the landlord must provide the necessary services (e.g. water and heat supply, waste collection, etc.).
• Make subsequent accounts for these services – all services provided by the landlord must be properly accounted for under the law. This billing must be available to the tenant at all times.
• Arrange for defects to be rectified – if, for example, the gas boiler, heating or similar equipment breaks down, the necessary repairs must be taken care of. However, the landlord is not obliged to provide routine maintenance of the flat (drain cleaning, minor repairs to furniture, cleaning etc.), these tasks are carried out by the tenant.
• The landlordmust not deny the tenant’s rights – prohibitions on pets, doing business, receiving visitors or smoking in the apartment are quite common. However, these are unjustified prohibitions that infringe the tenant’s rights. If the tenant’s behaviour does not annoy or restrict other residents of the building, the landlord is not legally allowed to impose such prohibitions.

6. What about permanent residency?

One of the tenant’s rights is to establish a permanent residence (incorrectly, a permanent home). The tenant is allowed to do this even if you, as the landlord, do not agree. An express prohibition in the tenancy agreement is not an obstacle.

You may now be wondering what would happen if a tenant establishes a permanent residence and is subsequently evicted. This is unfortunately a real threat, because the bailiff then actually carries out his activities in the place where the debtor is staying.

Of course, the bailiff cannot seize the property, which is the property of the landlord. He can, however, seize the furnishings of the flat. How to defend yourself in such a situation? Here are some tips that might be useful:

• Keep receipts for any household furnishings you have purchased with your own money.
• Make it clear in the handover report which equipment is your property.
• Check regularly that the tenant is not on the debtors’ list and that there are no enforcement proceedings against them.
• If you are still worried about your property, rent the apartment without any equipment.
• When the tenancy ends, check if the tenant has changed their permanent residence. If he or she still remains registered in your apartment, you can apply for a change with a terminated lease.

7. How to terminate the lease?

And what if everything is not as good as it seemed at the beginning? Of course, the landlord has the right to terminate the contract. However, this must be done in writing and according to the statutory requirements. The main one is the obligation to state the exact reason for the termination. The reason could be, for example, that you or someone in your family needs to use the flat. We have discussed other reasons in our article on giving notice. It is advisable to deliver the notice to the tenant by post, in your own hands, so that you can be sure that it has been received.

However, there are exceptions where the landlord can terminate the tenancy without giving the tenant any notice. As a rule, these are situations where there is excessive wear and tear on the apartment and delay would risk even more damage. Both fixed-term and open-ended contracts can be terminated in this way.

Whether you are dealing with the problem of terminating a tenancy agreement or, on the contrary, need help with drawing it up, we will be happy to take it on. You can have your completed documents from us in as little as 48 hours. All online and at a predetermined price.