The new Civil Code (hereinafter only ‘NCC’) becomes effective as from January 1, 2014 and is going to bring changes in the legal regulation of leases. Leases will always be regulated by new amendment as from that date, except for lease of movables.
It is appropriate to focus on changes in real property leases, especially residential leases. The NCC legislation gives greater freedom to the tenant. For example, should the tenant wish to use the flat with another person, they will not need the landlord’s permission. The landlord must only be notified of a new occupant within two months at the latest.
The landlord’s permission will not be necessary even in the cases of partial sublease, provided the tenant still permanently resides in at least a part of the flat.
No permission is required when the tenant wishes to keep a pet in the flat. Quite contrary, it is their right. The pet must not be an unreasonable nuisance for the property owner or other residents of the property.
If the landlord fails to remove the fault, which has been notified by the tenant, the tenant themselves may remove the fault at the landlord’s expense. Alternatively, if the fault prevents the tenant from duly using subject of lease, they may terminate the lease agreement without any notice period.
Naturally, the crucial aspect of residential lease is a notice. Notice legislation has undergone many changes too. The most important change is the option for the landlord to terminate the tenancy without any notice period, if the tenant breaches their obligation in an especially gross manner (for example, fails to pay three-month rent, damages the flat or is not using it for agreed purposes).
Apart from special cases, the notice period remains three months and the landlord may terminate only due to reasons set out in the legislation. On the contrary there is a new possibility for the tenant to terminate the definite-period lease only in case there is a substantial change to the circumstances under which the lease agreement was made.
Another change regards the security deposit. There will be no security deposit upon making the lease agreement. To secure the tenant’s obligations are fulfilled, the landlord may request so called security, which may amount up to a 6 times multiple of the monthly rent. However, the tenant has a right to interest on this security, i.e. statutory interest as a minimum.
The NCC brings many more changes to the lease legislation and it is therefore important to prepare well for the new lease legislation before the NCC comes into effect.