Negotiating the lease in the agreement: yes or no?

Contrary to some assumptions, rent is not a legally binding part of the lease agreement. Nevertheless, we consider it an essential part of the agreement and advise that you negotiate it in the contract. This will save you a great deal of problems and confusion in the future. If the quantity of rent is not concurred in the contract, the property manager can claim the rent at the rate that is customary in the area for renting a comparable flat or home. However, this should be shown.

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

How to determine the optimal rent?

Finding the perfect lease is challenging. If you do not use the services of a genuine estate representative, numerous realty sites can be a great guide. It is very important to compare apartments with the very same layout, size and condition - for instance, whether they have been remodelled, how they are heated and the condition of the windows. Naturally, the area, the flooring of the structure in which the home lies, whether there is an elevator, a cellar or verandas in the building likewise affect the rate. It is also essential whether the home is rented furnished or not.

Finding numerous apartment or condos with comparable parameters will help identify the rate range. It is a genuine objective of property managers to make as much cash as possible from the lease. However, it is true that if you set the rate above the normal variety in the location, it will take a lot longer to discover a renter. Unless the apartment or condo has something rather extraordinary that other apartments in the area don't have, it is possible that the occupant will be lured by cheaper competitors and will quickly move out, or not relocate at all.

On a monthly basis when the apartment or condo is empty, not just does it not bring any cash, however on the contrary, it is gotten in touch with costs for energies and energy that the owner needs to pay. Therefore, it pays to find the ideal price level for the lease.

What is included in the lease?

The rent itself is characterised as a payment to the owner for the use of his/her flat (or e.g. non-residential area). However, the property owner and the occupant can concur that the lease will likewise consist of payments for services associated with the usage of the apartment or condo, or charge these services as a flat rate outside the rent. This consists of, for instance, utilities, energy or water charges. All of these payments can likewise be listed in a" record sheet", which can be an accessory to the tenancy contract.

In the case of long-lasting leases, it is usually worth transferring the utilities to the occupant. This offers the tenant the liberty to select the provider and a better summary of their costs. A little bit of 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 analyses, this is a payment that does not straight benefit the occupant and must not be charged. But if it is billed covertly, i.e. as part of the overall rent, unfortunately the occupant has little option.

In addition to the lease, an amount of money (commonly referred to as a security deposit, which we have gone over in information in our short article What to keep an eye out for when renting an apartment or condo) can also be concurred in the agreement, which the tenant pays to the property owner before the tenancy begins and which can be used in the future, for instance, to pay rent arrears or to make up for damage triggered by the tenant.

Help with the lease agreement

By drawing up a good lease agreement, you will conserve yourself the majority of the issues, whether as a property manager or a tenant. We will prepare or check the lease agreement, or encourage on drawing up a change to the contract or terminating the lease. We will handle whatever quickly and perfectly.

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  Can routine rent payments be guaranteed?
  
  The services of companies that rent a home from the owner and then offer it to tenants for a commission have become a hit recently. This guarantees the owner regular lease payments throughout of the contract and eliminates him of the hassle of finding tenants and administration. For the proprietor, this can be a really lucrative service that saves time and energy. However, it is necessary to thoroughly compare offers from various companies and check out reviews before signing an agreement. This is because some companies, in the experience of consumers, do not always act relatively and may have a different approach to tenants than what has actually been concurred with the property manager. 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 methods. A popular one is to consistently participate in a fixed-term contract (e.g. for one year), where the landlord provides a new agreement with an increased rent each time the term ends. It is then as much as the tenant whether they accept the brand-new price and desire to remain in the home. In such a case, the proprietor is not restricted by law in the possible cost boost. However, we recommend entering into fixed-term contracts if the objective of the lease is actually short-term. If the proprietor plans to rent out the house for a long term, but takes the tactic of participating in shorter-term fixed-term agreements, such tactics may backfire precisely because the renters leave after a brief time period and the property owner is hectic consistently trying to find new tenants.
  
  The property owner can unilaterally increase the rent approximately the regular lease in the location, if this is agreed in the agreement.
  
  Rent indexation to inflation
  
  Another alternative for increasing the rent is to work out an inflation stipulation. This permits an automatic increase in rent depending on inflation, normally on 1 January or on the anniversary of the lease arrangement. However, it is not possible to increase lease more regularly than when a year utilizing an inflation stipulation. The provision itself need to refer to a specific inflation index (such as the Consumer Price Index). Obviously, the rent does not need to be increased by the complete worth of inflation, however an increase can be worked out, for example, only if inflation increases by more than 2%, with the lease only being increased by the rise in inflation above this threshold. At the same time, it is generally agreed that a negative boost in inflation will not impact the lease.
  
  Settle on a greater cost
  
  The two parties can likewise settle on the lease boost together and write an addendum to the lease agreement, for example.
  
  The property owner can also choose to increase the lease himself. As a rule, she or he will then interact his or her objective in the form of a proposal for an increase, which he or she sends to the occupant. According to the guidelines laid down in the Civil Code, an increase can be proposed no earlier than one year after the last increase. At the same time, there is a rule that the lease might be increased by a maximum of 20 % over three years. If your rent is CZK 15,000, it can be increased by an optimum of CZK 3,000 within 3 years. At the very same time, there is a condition that the resulting rent does not surpass the previously mentioned regular rent in the area. The locally customary lease can be established, for instance, by consulting realty agencies operating in the locality or an expert's report. For your own orientation, the web calculator will likewise assist you
  
  However, the renter does not have to accept the suggested increase. They can think about the proposition for two months and if they do not agree, the can apply to the court within 3 months to have the increase approved. The court may identify in the procedures that the rent will be lower (or greater) than the proprietor's proposal. In case of disagreement, the tenant might work out the right to end the agreement by providing the appropriate length of notification.
  
  Hint: We have also talked about lease increases in more information in our post When leas can increase.
  
  Can the state regulate rents?
  
  After the transformation, the state also enforced specific constraints on rent boosts in the kind of rent policy. Regulation was presented in the Czech Republic until 2011. Some political leaders are still considering the possibility of policy as an exceptional and short-lived step to prevent a sharp boost in rent rates, but no such procedure has yet taken concrete form. Recently, rent regulation has actually likewise failed in Berlin.
  
  What is the risk of non-payment of rent?
  
  Non-payment of lease can cause termination of tenancy. The landlord deserves to end the lease either with a conventional notice period, however if the rent and utility expenses have actually not been paid for at least 3 months, the lease can be ended without notification and the tenant can be required to hand back the home without unnecessary hold-up. In addition, non-payers of lease may likewise need to worry about interest on late payments and court expenses if there are court proceedings.
  
  However, it is perfect not to let the scenario go that far and to call the tenant at the very first delay in paying the rent with a notification of non-payment and a demand for payment of the lease due, warning of the possible repercussions later (i.e. payment of interest or later on termination of the lease). Some circumstances can be quite unimportant, such as a misplaced or left out standing order, and just providing a caution will help resolve them quickly.
  
  You can also learn how to pay tax on rental residential or commercial property.
  
  Summary
  
  The lease agreement governs the relationship between the proprietor and the renter, with the essential elements being the amount of lease, the possibilities of increasing it and the rules for payment of services. The landlord can unilaterally increase the rent only in cases offered by law, while the occupant can refuse the changes and, if necessary, use for an evaluation by the court. Non-payment of lease can cause termination of the lease without notice. When getting in into a contract, it is necessary to clearly set out the regards to payment and to check out all legal arrangements thoroughly to prevent misconceptions and disputes in between the celebrations.