Frequently asked questions
Does the lease agreement for business premises have to be in writing?
The lease agreement for business premises does not have to be in writing by law. However it is recommended to enter into the agreement in writing in order to avoid possible disputes and vagueness in terms.
If the lessor is a company, then is it necessary to add VAT to the lease?
Adding VAT to the rent of business premises is voluntary. If a company wishes to add VAT to the rent of business premises, it has to be a VAT liable company and must notify the Tax and Customs Board in writing. Please note that the Tax and Customs Board has not accepted the VAT recalculation in case the company hasn’t notified the Tax and Customs Board beforehand. This means that it is very important for the tenant to know if the lessor has performed the notification obligation.
Does the tenant have to make an advanced payment?
There is no obligation to make an advanced payment by law. However the parties may agree in the agreement that the advanced payment has to be made. The amount of the advanced payment is not regulated by law. However it must be reasonable, taking into account the length of the lease period and the nature of the specific contract. The usual advanced payment is the amount of one month’s to three months’ rent.
Does the tenant have to pay a deposit?
There is no obligation to pay a deposit by law. However the parties may agree in the agreement that the deposit has to be paid. The maximum amount of a deposit in case of a lease agreement for business premises is not regulated by law. The usual amount of a deposit is the amount of one month’s to three months’ rent.
What is the lessor’s right of security?
The lessor’s right of security is the right of security over movables located on the immovable and, upon the lease of a room, over movables which are part of furnishings or are used together with the room in order to secure claims arising from the lease contract. Claims for the rent of the current year and the previous year and claims for compensation shall be secured by a pledge. If a tenant wants to move out or to remove things from the premises, the lessor may withhold things to the extent which is necessary in order to secure the claims of the lessor.
Does the tenant always have to pay for all the utility costs and other cost relating to the use of the premises?
In addition to the payment of rent, a lessee shall bear other expenses related to the leased thing only if so agreed in the agreement. Charges for the services and acts of a lessor or a third party which are related to the use of a thing are accessory expenses.