Negotiating the rent in the agreement: yes or no?

Contrary to some assumptions, rent is not a lawfully binding part of the lease agreement. Nevertheless, we consider it a key part of the agreement and recommend that you negotiate it in the contract. This will conserve you a great deal of problems and confusion in the future. If the amount of lease is not agreed in the contract, the landlord can declare the lease at the rate that is traditional in the area for leasing a comparable flat or home. However, this should be proven.

Tip: Read what to keep in mind when concluding a lease contract for a house.

How to determine the ideal lease?

Finding the ideal rent is hard. If you do not utilize the services of a realty agent, numerous property websites can be a good guide. It is essential to compare houses with the exact same layout, size and condition - for example, whether they have actually been remodelled, how they are heated and the condition of the windows. Obviously, the area, the floor of the structure in which the apartment or condo is situated, whether there is an elevator, a cellar or verandas in the building likewise influence the rate. It is likewise crucial whether the home is leased provided or not.

Finding several apartment or condos with similar parameters will assist identify the rate variety. It is a legitimate aim of property owners to make as much money as possible from the lease. However, it holds true that if you set the cost above the typical variety in the area, it will take a lot longer to find an occupant. Unless the home has something rather extraordinary that other houses in the location don't have, it is possible that the occupant will be lured by cheaper competitors and will soon vacate, or not relocate at all.

Monthly when the apartment or condo is empty, not only does it not bring any money, but on the contrary, it is connected with expenditures for utilities and energy that the owner needs to pay. Therefore, it pays to find the right rate level for the rent.

What is consisted of in the lease?

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

In the case of long-term leases, it is usually worth moving the energies to the renter. This gives the tenant the flexibility to pick the company and a better overview of their expenses. A bit of administration at the beginning can save both celebrations the inconvenience of settling overpayments or underpayments.

An often-discussed payment is the payment to the so-called repair work fund. According to many legal analyses, this is a payment that does not straight benefit the renter and should not be charged. But if it is billed covertly, i.e. as part of the total rent, unfortunately the renter has little option.

In addition to the rent, an amount of cash (typically described as a security deposit, which we have discussed in information in our short article What to look out for when renting a house) can also be concurred in the agreement, which the occupant pays to the landlord before the occupancy starts and which can be used in the future, for example, to pay rent financial obligations or to compensate for damage triggered by the occupant.

Assist with the lease arrangement

By preparing a great lease contract, you will save yourself many of the problems, whether as a proprietor or an occupant. We will draw up or inspect the lease agreement, or recommend on drawing up a modification to the agreement or terminating the lease. We will manage whatever rapidly and perfectly.

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Can regular rent payments be ensured?

The services of business that rent a house from the owner and then use it to tenants for a commission have actually become a hit in the last few years. This guarantees the owner routine rent payments for the period of the contract and relieves him of the trouble of discovering occupants and administration. For the landlord, this can be a very profitable service that saves energy and time. However, it is necessary to thoroughly compare offers from different providers and check out evaluations before signing a contract. This is because some companies, in the experience of clients, do not always act fairly and may have a various approach to renters than what has been concurred with the property owner. It is for that reason essential to study the conditions completely and be clear about what both parties 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 agreement (e.g. for one year), where the property manager presents a brand-new agreement with an increased lease each time the term ends. It is then as much as the renter whether they accept the new rate and wish to remain in the apartment. In such a case, the landlord is not restricted by law in the possible price boost. However, we suggest participating in fixed-term contracts if the intention of the lease is truly short-term. If the property manager plans to rent the apartment for a long term, however takes the strategy of getting in into shorter-term fixed-term agreements, such tactics may backfire exactly because the renters leave after a short time period and the property manager is busy consistently trying to find brand-new renters.

The property manager can unilaterally increase the rent approximately the normal lease in the area, if this is agreed in the contract.

Rent indexation to inflation

Another choice for increasing the lease is to work out an inflation provision. This allows for an automated boost in lease depending upon inflation, typically on 1 January or on the anniversary of the lease arrangement. However, it is not possible to increase lease more frequently than as soon as a year using an inflation clause. The stipulation itself need to describe a specific inflation index (such as the Consumer Price Index). Obviously, the rent does not have to be increased by the complete worth of inflation, however a boost can be negotiated, for instance, just if inflation rises by more than 2%, with the lease just being increased by the rise in inflation above this limit. At the same time, it is normally concurred that an unfavorable boost in inflation will not impact the rent.

Agree on a greater cost

The two celebrations can likewise agree on the lease boost together and compose an addendum to the lease agreement, for instance.

The property owner can also decide to increase the rent himself. As a rule, she or he will then communicate his or her intention in the form of a proposal for an increase, which she or he sends to the occupant. According to the guidelines laid down in the Civil Code, a boost can be proposed no earlier than one year after the last boost. At the very same time, there is a guideline that the rent might be increased by a maximum of 20 % over 3 years. If your rent is CZK 15,000, it can be increased by a maximum of CZK 3,000 within 3 years. At the same time, there is a condition that the resulting rent does not surpass the abovementioned normal rent in the area. The locally popular lease can be ascertained, for example, by seeking advice from realty agencies running in the region or an expert's report. For your own orientation, the web calculator will likewise assist you

However, the occupant does not need to concur to the suggested increase. They can think about the proposal for two months and if they do not agree, the proprietor can use to the court within three months to have the boost approved. The court may determine in the proceedings that the rent will be lower (or greater) than the landlord's proposition. In case of dispute, the occupant may work out the right to terminate the contract by providing the appropriate length of notification.

Hint: We have actually likewise talked about lease increases in more information in our article When leas can increase.

Can the state regulate leas?

After the transformation, the state also enforced particular restrictions on rent boosts in the type of lease policy. Regulation was presented in the Czech Republic until 2011. Some politicians are still considering the possibility of regulation as an exceptional and short-term action to prevent a sharp increase in lease rates, but no such procedure has actually yet taken concrete type. Recently, lease policy has actually also failed in Berlin.

What is the danger of non-payment of rent?

Non-payment of rent can lead to termination of occupancy. The landlord can terminate the lease either with a traditional notice period, however if the lease and utility expenses have actually not been spent for a minimum of 3 months, the lease can be terminated without notice and the tenant can be required to hand back the apartment without excessive hold-up. In addition, non-payers of rent may likewise need to fret about interest on late payments and court expenses if there are court proceedings.

However, it is ideal not to let the circumstance go that far and to contact the tenant at the very first delay in paying the lease with a notification of non-payment and a demand for payment of the lease due, warning of the possible effects later on (i.e. payment of interest or later on termination of the lease). Some situations can be quite minor, such as a lost or left out standing order, and just giving a warning will assist resolve them quickly.

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

Summary

The lease agreement governs the relationship in between the property manager and the renter, with the crucial aspects being the amount of rent, the possibilities of increasing it and the rules for payment of services. The proprietor can unilaterally increase the lease only in cases offered by law, while the tenant can refuse the modifications and, if required, request a review by the court. Non-payment of rent can lead to termination of the lease without notice. When entering into an agreement, it is crucial to plainly set out the terms of payment and to read all contractual provisions thoroughly to avoid misunderstandings and disagreements between the parties.