Real estate rental

How to safely rent a property?
  • The real estate lease agreement should secure the interests of the parties in accordance with the relevant provisions.
  • Many rental agreements contain solutions that are not compliant with the regulations and therefore are invalid, which means that they cannot be effectively applied. This most often happens in the case of provisions regarding the termination of a lease agreement due to non-payment.
  • The landlord and tenant do not have full discretion and cannot enter in the agreement every provision – even if both parties agreed to the specific solutions.
  • A lawyer should draw up the lease agreement in such a way as to legally secure the interests of the parties to the fullest possible extent and regulate all issues that may arise during the use of the property by the tenant and after the termination of the lease contract.

What type of lease agreement should I sign?

It all depends on whether the landlord conducts business activity concerning the rental and on the purpose of the rental.

There are different types of lease agreements for a tenant who rents residential premises and for an entrepreneur who intends to conduct business activity (e.g. office, store, restaurant etc.) in the rented premises.

Most often, after reviewing the details of a particular case, I recommend one of the following rental agreements:
Occasional lease agreement
  • concerns an apartment
  • the landlord should be a person who is not engaged in the business of renting properties
  • an occasional lease agreement may be concluded for a maximum of 10 years
  • the tenant submits a statement of voluntary submission to execution in the form of a notarial deed and indicates the premises where he/she will be able to move in case of termination or expiry of the lease agreement
  • security deposit may amount to a maximum of six times the monthly rent
  • the landlord must report the conclusion of the lease agreement to the tax office
Institutional lease agreement
  • concerns an apartment
  • the landlord should be a person (or company) who is engaged in the business of renting properties
  • an institutional tenancy agreement must be concluded for a fixed period
  • the tenant submits a statement on voluntary submission to execution in the form of a notarial deed
  • security deposit may amount to a maximum of six times the monthly rent
Lease agreement for business purposes
  • applies to rental of premises for business purposes (e.g. restaurant, store, office)
  • the landlord may be any person (or company)
  • the lease agreement may be concluded for a definite or indefinite period of time
  • the parties to the agreement are free to determine the content of the rental agreement and type of collaterals (e.g. deposit, statement on submission to enforcement, contractual penalties, guarantees, promissory notes, etc.), as the Act on protection of tenants’ rights does not apply to such an agreement
Frequently asked questions concerning real estate rental
1
Is a "simple" apartment rental agreement safe for the landlord (owner)?

No. According to Polish law, the tenant has much more rights than the landlord.

The solution that secures the interests of the landlord is an occasional or institutional lease agreement. From the landlord’s (owner’s) point of view those agreements are much safer than a “simple” lease agreement.

2
Is it safe to use rental agreement templates available online?

Unfortunately, it is not safe to use sample rental agreements without consulting a lawyer. Every real estate is different, requires an individual approach and an appropriate adjustment of the lease agreement.

Furthermore, a lease agreement should be adjusted not only to the specific real estate, but also to the situation of the lessee and the lessor – for example: an apartment lease agreement and a lease agreement for premises intended for business purposes require completely different provisions.

Regulations governing real estate rental are complicated and included in many legal acts, in particular in the Civil Code and the Act on protection of tenants’ rights. Drawing up a safe and legally effective lease agreement requires a detailed knowledge of the aforementioned acts as well as court rulings, therefore it is recommended to consult a lawyer before conclusion of any rental agreement.

3
How much does it cost to prepare a rental agreement?

The cost of preparing a rental agreement depends on how many issues are supposed to be covered by the agreement and whether it will be necessary to prepare or provide comments on additional documents such as a statement of voluntary submission to enforcement, a statement indicating the premises where the tenant will move in the event of expiration of the lease agreement, contract of surety, promissory note, etc.

Exact costs will always be provided before starting our cooperation, when I review the details of the particular case.

4
How does the tenant's submission to enforcement protect the landlord's interest?

For both occasional and institutional lease agreements, the lessee submits a statement on voluntary submission to enforcement in the form of a notarial deed.

Submission of such a statement ensures the landlord an easy way to evict tenants who fail to pay rent or other due charges.

This allows the landlord (owner) to minimize the risk of the former tenant unlawfully occupying the property after the lease has been terminated or expired.

5
Are there other ways to protect the landlord's interests?

Yes. Most often the interests of the landlord are secured by the payment of a cash deposit.

It is also quite common for a security to be provided by a third party as surety for the payment of rent. There are also cases where the tenant submits a promissory note to secure the landlord’s claims.

Depending on the agreement between the parties, it is possible to establish other types of security, such as contractual penalties.

6
How to validly terminate a rental agreement?

It all depends on the content of the contract and the specific situation – i.e. the reason why the contract should be terminated.

It is important to make sure that the lease contract contains appropriate provisions that will allow for its termination. The parties should make sure that the provisions of the lease agreement comply with the law, particularly with Article 11 of the Act on the protection of tenants’ rights.

Properly constructed lease agreement allows to avoid many problems such as lack of payment by the lessee, subleasing the property to a third party without the owner’s consent, illegal occupation of the property by the lessee after expiration of the agreement, etc.

Unfortunately, most lease agreements contain provisions inconsistent with the law, which only appear to protect the interest of the lessor (landlord), but are invalid and therefore unenforceable.

For example, a lease agreement may not provide that the lessor has the right to terminate the lease of an apartment with immediate effect if the lessee fails to pay rent. Such a provision would be contrary to the Act on the protection of tenants’ rights and thus invalid, which means that the lessor (landlord) could not effectively terminate the lease on that basis.

The procedure for terminating a rental agreement is very formalized and any mistake may cause the termination to be ineffective, so it is recommended to consult a lawyer before sending a letter of termination of a rental agreement.

7
What are most important items in a rental agreement for a business property?

Lease agreements for the purposes of conducting business activity are usually more extensive than lease agreements for residential premises and allow for more comprehensive protection of the lessor’s (landlord’s) interests.

It is worth considering proper regulation of the following issues in a commercial premises lease agreement:

  • security of rent payment,
  • rent valorization
  • the right to terminate the lease agreement in specific cases (e.g. non-payment of rent, gross breach of contract, etc.)
  • rules for carrying out repairs, renovations and alterations to the premises,
  • assurance of participation of the lessee in the costs of finishing the apartment,
  • contractual penalties for breach of the lease agreement or community regulations, etc.

Lease agreement for business premises should be adjusted to the type of business that will be conducted in the premises and to the intentions of the parties. Before concluding a lease agreement it is recommended to consult a lawyer, who will prepare appropriate documents and assist in negotiations or adapt the received draft agreement to the tenant’s and landlord’s arrangements.

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