Negotiating the lease in the agreement: yes or no?

Contrary to some presumptions, rent is not a legally binding part of the lease arrangement. Nevertheless, we consider it an essential part of the agreement and recommend that you negotiate it in the agreement. This will save you a lot of issues and confusion in the future. If the amount of lease is not agreed in the contract, the proprietor can claim the rent at the rate that is customary in the regional location for leasing a similar flat or home. However, this should be shown.

Tip: Read what to keep in mind when concluding a lease agreement for an apartment.

How to figure out the optimal lease?

Finding the perfect rent is not easy. If you do not utilize the services of a property representative, numerous real estate sites can be a great guide. It is necessary to compare houses with the same layout, size and condition - for instance, whether they have been remodelled, how they are heated and the condition of the windows. Obviously, the area, the flooring of the structure in which the home lies, whether there is an elevator, a cellar or terraces in the structure also affect the price. It is also essential whether the house is leased furnished or not.

Finding numerous houses with similar criteria will assist identify the cost variety. It is a genuine goal of proprietors to make as much money as possible from the rent. However, it is true that if you set the rate above the normal variety in the location, it will take much longer to find a tenant. Unless the house has something quite extraordinary that other apartments in the location do not have, it is possible that the occupant will be tempted by less expensive competition and will soon move out, or not relocate at all.

Each month when the apartment is empty, not just does it not bring any money, however on the contrary, it is gotten in touch with costs for utilities and energy that the owner has to pay. Therefore, it pays to find the best rate level for the rent.

What is consisted of in the rent?

The lease itself is characterised as a payment to the owner for making use of his/her flat (or e.g. non-residential space). However, the landlord and the renter can agree that the lease will likewise include payments for services connected to using the apartment or condo, or charge these services as a flat rate outside the lease. This includes, for example, utilities, 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.

When it comes to long-lasting leases, it is typically worth moving the utilities to the renter. This provides the tenant the freedom to choose the service suppliers and a much better introduction of their expenditures. A little administration at the start can save both parties the trouble of settling overpayments or underpayments.

An often-discussed payment is the payment to the so-called repair fund. According to lots of legal interpretations, this is a payment that does not directly benefit the occupant and should not be charged. But if it is billed covertly, i.e. as part of the overall lease, regrettably the occupant has little recourse.

In addition to the lease, an amount of money (frequently referred to as a down payment, which we have discussed in information in our article What to watch out for when leasing a house) can likewise be concurred in the agreement, which the tenant pays to the property owner before the tenancy starts and which can be utilized in the future, for instance, to pay lease defaults or to compensate for damage brought on by the tenant.

Assist with the lease contract

By drawing up a great lease arrangement, you will save yourself the majority of the issues, whether as a property manager or a renter. We will draw up or examine the lease agreement, or advise on preparing an amendment to the agreement or terminating the lease. We will manage whatever rapidly and flawlessly.

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Can regular lease payments be guaranteed?

The services of business that lease a home from the owner and after that offer it to renters for a commission have become a hit over the last few years. This guarantees the owner routine lease payments throughout of the agreement and relieves him of the hassle of discovering renters and administration. For the property manager, this can be a very rewarding service that conserves energy and time. However, it is necessary to carefully compare deals from different providers and read evaluations before signing an agreement. This is due to the fact that some companies, in the experience of customers, do not always act fairly and may have a various technique to occupants than what has actually been concurred with the landlord. It is therefore essential to study the terms completely and be clear about what both celebrations are dedicating to.

Rent increases

Rent increases can be approached in numerous methods. A popular one is to repeatedly enter into a fixed-term agreement (e.g. for one year), where the proprietor presents a brand-new contract with an increased rent each time the term ends. It is then approximately the occupant whether they accept the new rate and wish to remain in the apartment or condo. In such a case, the proprietor is not restricted by law in the possible rate increase. However, we advise entering into fixed-term agreements if the intent of the lease is really short-term. If the landlord means to lease the apartment for a long term, but takes the tactic of participating in shorter-term fixed-term agreements, such tactics might backfire exactly due to the fact that the renters leave after a brief time period and the landlord is busy consistently searching for new renters.

The property manager can unilaterally increase the lease as much as the normal lease in the area, if this is concurred in the agreement.

Rent indexation to inflation

Another alternative for increasing the rent is to negotiate an inflation clause. This allows for an automated boost in lease depending on inflation, typically on 1 January or on the anniversary of the lease arrangement. However, it is not possible to increase rent more often than when a year utilizing an inflation stipulation. The clause itself need to describe a specific inflation index (such as the Consumer Price Index). Obviously, the rent does not need to be increased by the amount of inflation, but a boost can be negotiated, for instance, just if inflation increases by more than 2%, with the lease only being increased by the increase in inflation above this threshold. At the same time, it is generally concurred that a negative boost in inflation will not affect the rent.

Agree on a greater price

The two parties can also concur on the rent boost together and write an addendum to the lease arrangement, for example.

The property owner can also choose to increase the lease himself. As a guideline, she or he will then interact his or her objective in the kind of a proposition for an increase, which she or he sends to the occupant. According to the rules laid down in the Civil Code, a boost can be proposed no earlier than one year after the last increase. At the very same time, there is a guideline that the lease might be increased by a maximum of 20 % over 3 years. If your lease is CZK 15,000, it can be increased by an optimum of CZK 3,000 within three years. At the very same time, there is a condition that the resulting lease does not go beyond the previously mentioned regular rent in the location. The locally customary rent can be ascertained, for instance, by speaking with property firms operating in the area or a specialist's report. For your own orientation, the web calculator will also help you

However, the tenant does not need to accept the suggested boost. They can consider the proposal for 2 months and if they do not agree, the landlord can use to the court within 3 months to have the increase authorized. The court might figure out in the proceedings that the lease will be lower (or higher) than the property manager's proposition. In case of difference, the occupant may exercise the right to terminate the agreement by providing the appropriate length of notice.

Hint: We have also gone over rent boosts in more detail in our short article When leas can increase.

Can the state control leas?

After the revolution, the state likewise enforced certain restrictions on lease boosts in the kind of rent guideline. Regulation was presented in the Czech Republic until 2011. Some political leaders are still thinking about the possibility of policy as an exceptional and temporary step to avoid a sharp boost in lease prices, but no such step has actually yet taken concrete type. Recently, lease policy has actually likewise failed in Berlin.

What is the danger of non-payment of rent?

Non-payment of lease can result in termination of tenancy. The property owner has the right to end the lease either with a standard notice duration, but if the lease and utility costs have not been spent for a minimum of 3 months, the lease can be terminated without notification and the occupant can be needed to restore the apartment without undue hold-up. In addition, non-payers of rent may likewise need to stress about interest on late payments and court costs if there are court procedures.

However, it is perfect not to let the situation go that far and to get in touch with the tenant at the very first delay in paying the rent with a notice of non-payment and a need for payment of the rent due, caution of the possible effects later on (i.e. payment of interest or later on termination of the lease). Some situations can be rather unimportant, such as a misplaced or omitted standing order, and merely offering a warning will assist fix them quickly.

You can also discover how to pay tax on rental residential or commercial property.

Summary

The lease agreement governs the relationship between the landlord and the renter, with the essential aspects being the quantity of rent, the possibilities of increasing it and the guidelines for payment of services. The property manager can unilaterally increase the rent just in cases offered by law, while the occupant deserves to decline the changes and, if needed, apply for a review by the court. Non-payment of rent can result in termination of the lease without notification. When getting in into an agreement, it is necessary to clearly set out the regards to payment and to check out all legal arrangements thoroughly to avoid misunderstandings and disagreements in between the celebrations.