Negotiating the rent in the agreement: yes or no?

Contrary to some presumptions, rent is not a legally binding part of the lease agreement. Nevertheless, we consider it a key part of the contract and suggest 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 rent is not agreed in the agreement, the property manager can claim the lease at the rate that is traditional in the area for leasing a similar flat or house. However, this need to be shown.

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

How to determine the optimal rent?

Finding the ideal lease is challenging. If you do not utilize the services of a realty representative, various realty websites can be a great guide. It is necessary to compare homes with the very same design, size and condition - for example, whether they have been refurbished, how they are heated and the condition of the windows. Naturally, the place, the flooring of the building in which the apartment or condo lies, whether there is an elevator, a cellar or verandas in the building likewise influence the cost. It is also important whether the house is rented provided or not.

Finding several homes with similar specifications will help figure out the cost range. It is a genuine objective of proprietors to make as much money as possible from the lease. However, it holds true that if you set the cost above the typical range in the location, it will take a lot longer to find an occupant. Unless the apartment or condo has something quite exceptional that other apartment or condos in the area don't have, it is possible that the renter will be lured by more affordable competition and will quickly leave, or not move in at all.

Each month when the apartment is empty, not just does it not bring any cash, however on the contrary, it is gotten in touch with expenses for utilities and energy that the owner has to pay. Therefore, it pays to find the right price level for the lease.

What is included in the lease?

The lease itself is characterised as a payment to the owner for the use of his/her flat (or e.g. non-residential space). However, the property owner and the tenant can agree that the rent will also consist of payments for services connected to using the house, 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 noted in a" record sheet", which can be an attachment to the occupancy agreement.

When it comes to long-lasting leases, it is normally worth moving the energies to the renter. This provides the tenant the liberty to choose the service providers and a much better introduction of their expenses. A little bit of administration at the start 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 interpretations, this is a payment that does not directly benefit the occupant and must not be charged. But if it is billed discreetly, i.e. as part of the overall rent, regrettably the renter has little option.

In addition to the lease, an amount of money (frequently referred to as a security deposit, which we have actually gone over in information in our article What to look out for when leasing a house) can also be concurred in the contract, which the renter pays to the landlord before the tenancy starts and which can be used in the future, for example, to pay rent defaults or to compensate for damage triggered by the renter.

Assist with the lease agreement

By drawing up a great lease agreement, you will save yourself the majority of the problems, whether as a proprietor or an occupant. We will prepare or inspect the lease agreement, or encourage on drawing up a modification to the arrangement or ending the lease. We will handle whatever rapidly and perfectly.

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  Can routine lease payments be ensured?
  
  The services of companies that lease a home from the owner and after that use it to tenants for a commission have actually ended up being a hit recently. This ensures the owner regular rent payments for the duration of the contract and relieves him of the hassle of discovering renters and administration. For the property manager, this can be a really rewarding solution that saves energy and time. However, it is necessary to carefully compare deals from different service providers and check out reviews before signing an agreement. This is due to the fact that some companies, in the experience of clients, do not always act relatively and might have a different method to renters than what has been concurred with the landlord. It is for that reason essential to study the terms and conditions thoroughly 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 landlord presents a brand-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 cost and wish to remain in the apartment. In such a case, the property owner is not limited by law in the possible rate boost. However, we recommend getting in into fixed-term contracts if the intention of the lease is really short-term. If the property manager intends to rent out the house for a long term, however takes the tactic of participating in shorter-term fixed-term agreements, such strategies might backfire exactly because the after a short time period and the property owner is busy consistently searching for brand-new occupants.
  
  The proprietor can unilaterally increase the lease approximately the regular lease in the area, if this is concurred in the contract.
  
  Rent indexation to inflation
  
  Another choice for increasing the lease is to negotiate an inflation provision. This permits an automated increase in rent depending upon inflation, normally 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 stipulation itself must refer to a particular inflation index (such as the Consumer Price Index). Obviously, the lease does not have to be increased by the amount of inflation, however a boost can be worked out, for instance, only if inflation increases by more than 2%, with the rent only being increased by the increase in inflation above this limit. At the very same time, it is generally agreed that an unfavorable increase in inflation will not affect the rent.
  
  Settle on a greater cost
  
  The two celebrations can also settle on the lease boost together and compose an addendum to the lease contract, for instance.
  
  The property manager can also decide to increase the rent himself. As a rule, he or she will then communicate his or her intention in the type of a proposal for an increase, which he or she sends to the occupant. According to the guidelines set 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 an optimum 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 exact same time, there is a condition that the resulting lease does not exceed the abovementioned regular lease in the location. The in your area popular rent can be ascertained, for example, by seeking advice from property agencies operating in the region or a specialist's report. For your own orientation, the web calculator will likewise help you
  
  However, the occupant does not need to consent to the suggested boost. They can think about the proposition for 2 months and if they do not concur, the landlord can use to the court within three months to have the boost approved. The court may figure out in the proceedings that the rent will be lower (or greater) than the property manager's proposition. In case of dispute, the tenant might work out the right to end the agreement by giving the suitable length of notice.
  
  Hint: We have actually also talked about lease increases in more information in our post When rents can increase.
  
  Can the state manage rents?
  
  After the revolution, the state likewise imposed particular restrictions on rent increases in the type of rent policy. Regulation was introduced in the Czech Republic till 2011. Some political leaders are still considering the possibility of guideline as a remarkable and momentary step to avoid a sharp boost in lease costs, however no such procedure has yet taken concrete form. Recently, rent guideline has actually also failed in Berlin.
  
  What is the danger of non-payment of rent?
  
  Non-payment of lease can result in termination of occupancy. The proprietor has the right to terminate the lease either with a standard notification duration, but if the lease and utility expenses have actually not been paid for a minimum of 3 months, the lease can be terminated without notice and the tenant can be required to restore the home without excessive delay. In addition, non-payers of lease might also have to stress over interest on late payments and court costs if there are court proceedings.
  
  However, it is ideal not to let the circumstance go that far and to contact the occupant at the first hold-up in paying the rent with a notice of non-payment and a need for payment of the rent due, caution of the possible consequences later on (i.e. payment of interest or later on termination of the lease). Some circumstances can be quite insignificant, such as a lost or left out standing order, and merely giving a warning will help solve them quickly.
  
  You can likewise learn how to pay tax on rental residential or commercial property.
  
  Summary
  
  The lease agreement governs the relationship between the property owner and the renter, with the key aspects being the quantity of lease, the possibilities of increasing it and the guidelines for payment of services. The landlord can unilaterally increase the rent only in cases offered by law, while the tenant deserves to refuse the modifications and, if needed, make an application for an evaluation by the court. Non-payment of lease can lead to termination of the lease without notice. When getting in into a contract, it is very important to clearly set out the regards to payment and to read all contractual provisions carefully to prevent misconceptions and conflicts between the celebrations.