Negotiating the lease in the agreement: yes or no?

Contrary to some assumptions, rent is not a legally binding part of the lease contract. Nevertheless, we consider it a crucial part of the agreement and advise that you negotiate it in the contract. This will conserve you a lot of issues and confusion in the future. If the amount of rent is not agreed in the agreement, the landlord can claim the rent at the rate that is popular in the area for leasing a comparable flat or home. However, this need to be shown.

Tip: Read what to bear in mind when concluding a lease agreement for a home.

How to figure out the optimal lease?

Finding the ideal rent is difficult. If you do not utilize the services of a real estate representative, different real estate websites can be a great guide. It is crucial to compare apartment or condos with the same design, size and condition - for instance, whether they have actually been refurbished, how they are heated and the condition of the windows. Of course, the area, the flooring of the structure in which the apartment or condo lies, whether there is an elevator, a cellar or terraces in the structure likewise affect the rate. It is likewise crucial whether the apartment or condo is rented furnished or not.

Finding several homes with similar specifications will help determine the cost range. It is a legitimate objective of landlords to make as much cash as possible from the lease. However, it is real that if you set the rate above the regular variety in the area, it will take much longer to find a tenant. Unless the house has something rather remarkable that other apartments in the location do not have, it is possible that the renter will be lured by less expensive competitors and will soon move out, or not relocate at all.

Each month when the apartment or condo is empty, not just does it not bring any cash, but on the contrary, it is gotten in touch with expenses for utilities and energy that the owner has to pay. Therefore, it pays to find the ideal cost level for the lease.

What is consisted of in the lease?

The rent itself is characterised as a payment to the owner for the usage of his/her flat (or e.g. non-residential space). However, the property manager and the renter can concur that the lease will also consist of payments for services related to using the apartment or condo, or charge these services as a flat rate outside the rent. This includes, for instance, energies, energy or water charges. All of these payments can also be noted in a" record sheet", which can be an accessory to the occupancy agreement.

In the case of long-term leases, it is typically worth moving the utilities to the renter. This gives the occupant the flexibility to choose the service providers and a much better introduction of their expenditures. A little administration at the beginning can conserve both celebrations the inconvenience of settling overpayments or underpayments.

An often-discussed payment is the payment to the so-called repair fund. According to numerous legal interpretations, this is a payment that does not directly benefit the tenant and needs to not be charged. But if it is billed discreetly, i.e. as part of the total rent, sadly the tenant has little recourse.

In addition to the lease, a sum of money (frequently referred to as a security deposit, which we have discussed in detail in our short article What to watch out for when leasing an apartment) can also be agreed in the contract, which the occupant pays to the landlord before the occupancy starts and which can be utilized in the future, for example, to pay rent financial obligations or to compensate for damage triggered by the occupant.

Assist with the lease agreement

By preparing a great lease contract, you will save yourself the majority of the issues, whether as a landlord or a renter. We will prepare or check the lease agreement, or advise on preparing a modification to the arrangement or ending the lease. We will handle everything rapidly and flawlessly.

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  Can regular rent payments be ensured?
  
  The services of business that rent a home from the owner and then use it to tenants for a commission have actually become a hit in recent years. This ensures the owner regular rent payments for the period of the contract and alleviates him of the inconvenience of discovering tenants and administration. For the property owner, this can be a really profitable solution that saves energy and time. However, it is crucial to carefully compare deals from different providers and read evaluations before signing a contract. This is due to the fact that some business, in the experience of customers, do not constantly act relatively and might have a different method to renters than what has been concurred with the property owner. It is therefore crucial to study the terms thoroughly and be clear about what both celebrations are dedicating to.
  
  Rent increases
  
  Rent increases can be approached in a number of ways. A popular one is to repeatedly participate in a fixed-term contract (e.g. for one year), where the proprietor provides a brand-new contract with an increased rent each time the term expires. It is then as much as the tenant whether they accept the new cost and want to stay in the home. In such a case, the property manager is not limited by law in the possible price boost. However, we suggest participating in fixed-term contracts if the objective of the lease is really short-term. If the proprietor intends to rent out the apartment or condo for a long term, however takes the method of getting in into shorter-term fixed-term agreements, such strategies might backfire precisely because the tenants leave after a short amount of time and the landlord is busy consistently searching for brand-new renters.
  
  The can unilaterally increase the rent as much as the regular lease in the location, if this is agreed in the contract.
  
  Rent indexation to inflation
  
  Another alternative for increasing the lease is to negotiate an inflation clause. This permits an automatic boost in rent depending upon inflation, typically on 1 January or on the anniversary of the lease arrangement. However, it is not possible to increase lease more often than when a year utilizing an inflation provision. The stipulation itself ought to refer to a particular inflation index (such as the Consumer Price Index). Of course, the lease does not have actually to be increased by the amount of inflation, however a boost can be worked out, for example, just if inflation rises by more than 2%, with the lease just being increased by the increase in inflation above this threshold. At the exact same time, it is typically agreed that an unfavorable boost in inflation will not impact the lease.
  
  Agree on a higher cost
  
  The 2 celebrations can also settle on the rent increase together and write an addendum to the lease contract, for instance.
  
  The property manager can likewise choose to increase the lease himself. As a guideline, she or he will then communicate his or her intent in the type of a proposal for an increase, which she or he sends to the occupant. According to the rules set in the Civil Code, a boost can be proposed no earlier than one year after the last increase. At the same time, there is a rule that the lease may be increased by a maximum of 20 % over three years. If your lease is CZK 15,000, it can be increased by an optimum of CZK 3,000 within 3 years. At the exact same time, there is a condition that the resulting rent does not go beyond the previously mentioned normal rent in the location. The in your area customary rent can be determined, for example, by consulting genuine estate firms running in the locality or a specialist's report. For your own orientation, the web calculator will also assist you
  
  However, the tenant does not need to consent to the proposed boost. They can think about the proposition for 2 months and if they do not concur, the property manager can apply to the court within 3 months to have the boost authorized. The court may identify in the proceedings that the rent will be lower (or greater) than the property manager's proposal. In case of difference, the occupant may work out the right to end the contract by offering the suitable length of notification.
  
  Hint: We have actually likewise gone over rent increases in more information in our article When leas can increase.
  
  Can the state manage leas?
  
  After the revolution, the state likewise enforced specific constraints on lease boosts in the type of lease regulation. Regulation was presented in the Czech Republic until 2011. Some politicians are still thinking about the possibility of regulation as a remarkable and momentary action to prevent a sharp increase in lease rates, but no such measure has actually yet taken concrete type. Recently, lease guideline has also failed in Berlin.
  
  What is the risk of non-payment of lease?
  
  Non-payment of lease can lead to termination of tenancy. The landlord can end the lease either with a conventional notice duration, but if the rent and utility costs have actually not been spent for at least three months, the lease can be ended without notification and the renter can be required to restore the apartment or condo without unnecessary delay. In addition, non-payers of rent might also have to fret about interest on late payments and court expenses if there are court proceedings.
  
  However, it is perfect not to let the circumstance go that far and to get in touch with the renter at the very first hold-up in paying the lease with a notice of non-payment and a demand for payment of the rent due, caution of the possible repercussions later on (i.e. payment of interest or later on termination of the lease). Some circumstances can be rather minor, such as a misplaced or left out standing order, and merely providing a caution will help solve them rapidly.
  
  You can likewise find out how to pay tax on rental residential or commercial property.
  
  Summary
  
  The lease arrangement governs the relationship between the property manager and the tenant, with the essential aspects being the amount of rent, the possibilities of increasing it and the guidelines for payment of services. The property owner can unilaterally increase the lease only in cases attended to by law, while the tenant has the right to refuse the changes and, if required, obtain an evaluation by the court. Non-payment of rent can result in termination of the lease without notice. When entering into a contract, it is necessary to plainly set out the regards to payment and to check out all legal arrangements carefully to avoid misunderstandings and conflicts in between the celebrations.