In business practice the drafting of a private lease contract has prevailed (rental contract) between the parties in order to define their obligations and responsibilities (e.g. the rental contract specifies the additional charges born by the tenant , how many rentals will be paid as a deposit) as well as a proof of the existing relationship. The lease in any case must be reported electronically to the Internal Revenue Service for tax reasons.
Which is the time period for a property lease?
The parties may, with no restriction, agree on a time period for the property lease. In certain cases the minimum duration of the contract is defined by law. Regarding house lease the minimum time period for the lease is three (3) years.
The duration of the commercial leases is basically agreed upon, with no restrictions, by the parties. However, for lease contracts after 28.02.2014 the law defines a minimum duration of three years. If the agreed time period is more than three years, the longer period applies. If though a shorter than three years or no specific period is agreed, then the three year duration is applied which commits both parties. However, the minimum duration of the commercial leases entered into force before 28.02.2014 is defined by law to twelve years.
An extension of the duration of the lease may take place before the end time of the lease, either explicitly, with the agreement of the contracting parties, or silently, with the tenant to remain in the leasehold after the agreed time period of the lease. The law defines that the lease concluded for a definite time period is considered that has been renewed for an indefinite period if after the end time of the lease the tenant continues to use the leasehold and the landlord is aware of this and does not oppose it.
When and how the rent is paid?
The rent is paid by the tenant usually on a monthly basis and is defined in monetary terms, it may also to be defined in compensation in kind or services. The rent, as well as, the payment date are freely agreed by the parties. The rent may be readjusted, based on an agreement by the parties every year, while in the commercial leases an annual adjustment is defined by law. The rent may also be readjusted by a court decision.
The contracting parties may bring an action before the civil courts asking for a rent readjustment, since, because of permanent unforeseen events and situations, a substantial increase or decrease of the rent value of the leasehold makes under the present circumstances the payment of the same rent to be contrary to good faith and business ethics. Change of conditions may include the substantial increase or decrease of the rent value of the leasehold and of other adjacent similar property, the currency devaluation, the economic crisis or, for several reasons, the increase/decrease of property demand and, other cases.
Which is the security normally paid to the landlord by the tenant?
During the conclusion of a property lease contract it has prevailed in the market practice the tenant to pay a certain amount to the landlord which is called ‘deposit’, which normally is equivalent of several months rental. Actually, this is a security and, more specifically, constitutes a down payment against a future tenant’s debt which may remain outstanding and, in that case, will be covered by this amount.
Which are the rights of the landlord if the tenant delays the rent payment?
In case that the tenant delays in total or partially the rent payment the landlord has the right to terminate the lease. In this case, the lease terminates after a period of one month, except if during this period, the tenant pays the overdue rents along with interest and expenses.
In the case of rent payment delay there is a possibility that the landlord may ask for the rent payment without the termination of the lease. The tenant on its part, in order to avoid the eviction, may pay the rental up to the court trial. The latter is not the case if the tenant delays the rent payment for a second time.
The financial distress of the tenant does not constitute a valid reason for not paying the rent. Therefore, in case of a rent payment delay, even for a short period, the tenant risks eviction. More than that, in case of a delay of the rent payment, the landlord may ask from the competent court the issuance of an eviction order, if has notify the tenant with a extrajudicial notice – invitation to pay the overdue rents and, a period of fifteen days has been lapsed from the serving of this invitation to the tenant. Rent payment within the period stated above precludes the issuance of an eviction order, only if the tenant is delinquent for first time. In any other case or if the overdue rents are not paid during the above stated period, an eviction order is issued and served to the tenant which is enforceable twenty days after the serving. In the eviction order a rent repayment order including overdue rents, property expenditures, charges and utility bills, may be added.
The tenant against whom the eviction order has been issued has the right to bring an opposition to the order served, from the competent court within a period of fifteen working days after the service date. The tenant by bringing an opposition to the eviction order may ask the court the suspension of the order’s enforcement until the final decision on the opposition.
Which are the rights of the landlord if the tenant is misusing the leasehold?
The landlord may terminate the lease contract for reasons pertaining to the misuse of the leasehold by the tenant. Specifically, the landlord has the right to terminate the lease contract and to seek compensation, if the tenant, despite the landlord’s protestation, which constitutes a prerequisite for establishing a complaint, does not use the leasehold properly or treats the leasehold against the agreed use, as well as, in case that does not observe the proper behavior toward the other tenants. If the tenant after the landlord’s protestation complies and discontinues the misuse in a reasonable time period, the court will reject the landlord’s request for eviction.
Which are the rights of the tenant in the case of leasehold defects?
The landlord is obliged to release the leasehold in a proper condition for the agreed use, as well as, to maintain the leasehold in a proper condition for the agreed use during the entire lease period, and is obliged to remove the actual defects when they exist and to restore the agreed properties, if they lapsed.
If at the time of the leasehold delivery to the tenant, the leasehold bears a defect which prevents partially or totally the agreed use (real defect), or during the lease period such a defect appears, the tenant has the right for reduction or nonpayment of the rent. The same occurs if the leasehold lacks an agreed property, or if such property lapsed during the lease period. If the real defect or the lapse of the agreed property totally hinders the agreed use, the tenant has the right not to pay the rent as long as the use of the leasehold is prevented for the above stated reasons. Real defect is also considered the prevention of the leasehold use by measures imposed by an administrative authority, or by public law restrictions, if in this case the agreed use of the leasehold is actually prevented.
On the contrary, if despite the existence of a real defect, the tenant is using the leasehold seamlessly, according to the agreed use, the tenant is not released from the obligation to pay the agreed rent.
The tenant has the right to terminate the lease if the leasehold has not been delivered on time or its use of the leasehold was removed totally or partially.
May the tenant leave prematurely the leasehold?
If the agreed duration of the lease is included in the lease contract, the tenant may not leave before the end of this period, otherwise the tenant is obliged to pay the agreed rent, even if for its own reasons is unable to comply or does not want to use the leasehold. Eventually, if the tenant abandons the leasehold before the end of the agreed period without a legal or contractual right, the lease is not terminated and the tenant is obliged to pay the rent for the entire period until the end of the lease, even if the tenant does not use the leasehold for its own reasons. In any case, the tenant still owes the rents until the leasehold be leased again, while has the right to subtract from the rent everything that the landlord benefited from a different use of the leasehold, or fraudulently failed to benefit.
Which is the tenant’s responsibility for causing damages to the leasehold?
The tenant has the responsibility to deliver the leasehold to the same condition it was received. In case that the leasehold is delivered to the landlord with damages, which are not due to the agreed use, the landlord has the right to ask for compensation. In order to demand such compensation the landlord should invoke the lease contract, the damage caused and the amount of damage. This right of the landlord for compensation lapses after a six month period starting from the assumption of the leasehold by the tenant.
What happens if the tenant leaves the leasehold without taking back movable things brought in?
As mentioned above, the tenant has the obligation to deliver the leasehold in the same condition it was received. Among others the leasehold must be delivered empty along with its annexes and appurtenances. If the tenant fails to comply with this obligation and does not remove the movable things brought in, has the responsibility to repair any damage which will be caused to the landlord from the delay of their removal, due to fact that the landlord will be unable to deliver the leasehold free for further use. The tenant is not responsible for compensation if the leasehold has been delivered to the landlord and the presence of the tenants’ belongings does not make unusable the leasehold premises, allowing actually the possibility for the use of the leasehold by the landlord. The tenant has the right to collect its belongings within a six month period from the delivery of the leasehold to the landlord, otherwise loses this right.
Which leases fall under the special arrangements for commercial leases?
In the special arrangements for commercial leases fall the property leases which concluded for commercial activities or for exercising a profession or activity listed exhaustively in the law.
Professional leases include, among others, the leases for housing and operation of law firms, clinics, dental clinics, offices for licensed engineers and engineering technicians, notaries’ offices, bailiffs’ offices, veterinary clinics, accounting offices etc.
Finally, in the special arrangements for commercial leases fall also the leases for the housing of schools in general, and of kindergartens, health clinics and any kind of hospitals, housing and operation of drugstores and pharmaceutical stores, housing of retirement homes and petrol stations.
Which are the leasing arrangements for State and Public Entities?
The leases concluded by the State for the housing, as well as, the operational needs of the Public Services, except those leases falling under special provisions, are governed by a special regime, but, they are adapted to the regime of all other leases. However, the law governing the commercial leases takes precedence over specific legislation which governs the leases of the State and Public Entities. The above mentioned property leases are concluded through a public tender (auction).
The duration of the lease concluded by the State for the housing and the operational needs of Public Services is twelve years with some exceptions. The landlord is obliged at inception of the lease, as mentioned in the lease contract, to deliver the leasehold for the use by the State in a proper condition according to the terms of the tender, the decision for the acceptance of the bid and, the leasing contract. Otherwise, the lease is terminated by a decision by the Minister of Economy and Finance and the deposited security forfeits in favor of the State. The State proceeds to a new lease without an auction and the bidder is obliged to pay a compensation to the State, for the improper inception of the leasehold, equal to the 1/10 of the contract monthly rent for each day of delay, until the final housing of the Service in another appropriate property, attested and collected as public revenue.
The State may, over a year after the start of the contract, to terminate the lease. The termination is in writing and its results shall take effect three (3) months of its notification. In this case, the State has to pay the landlord as compensation an amount equal to one (1) monthly rent, as this stands at the time of termination. This does not apply to commercial leases.
The lease is not affected by an eventual change of the landlord’s identity and it continues with the new landlord. The State is allowed the unilateral extension of the lease contract for three more years, even if this term is not included in the contract.
