Commercial Property Lease

A commercial lease agreement gives the tenant the right to use commercial premises, that is, to generate income from using them. For example, a landlord lets a hall to a tenant for use as a fitness venue, where the tenant earns income from training sessions.

Act on the Lease and Sale of Commercial Premises

Special provisions on the lease of commercial premises are contained in the Act on the Lease and Sale of Commercial Premises (Official Gazette NN 125/11). Under this Act, commercial premises include commercial buildings and business premises intended for carrying out a business activity, as well as garages and garage spaces. A commercial lease is established by a lease agreement under which the landlord undertakes to hand over specific commercial premises to the tenant for use, and the tenant undertakes to pay the agreed rent for it.

Essential Provisions of a Commercial Lease Agreement

Under the Act, a commercial lease agreement must be made in writing.

The agreement must contain: – the first and last name or company name, residential or registered address, and personal identification number of the contracting parties, – details that unambiguously identify the commercial premises (the land registry parcel number and land registry entry in which the premises are registered, the floor area of the premises, the floor on which the premises are located, the position on the floor, a floor plan description of the premises, and any other details needed to identify them), – the activity to be carried out on the premises, – provisions on the use of shared facilities and areas, – the deadline for handing over the premises to the tenant, – the term of the agreement, – the amount of monthly rent, – the conditions and method for changing the rent, – the place and date of conclusion of the agreement.

Commercial Lease Agreement – Rights and Obligations of the Parties

The landlord must hand over the commercial premises to the tenant within the period set out in the agreement. Otherwise, the tenant may enforce their rights by legal action or terminate the lease, and is entitled to compensation for damages. The landlord must also hand over the premises in the condition specified in the agreement. Otherwise, the tenant has the right to terminate the lease, to request a proportionate reduction in rent, or to bring the premises into that condition at the landlord's expense if the landlord has not done so after the tenant has called on them to do it and given them a reasonable deadline, and is entitled to compensation for damages. During the lease, the landlord has the right to carry out works to improve the premises or to reduce energy and maintenance costs, and is obliged to carry out repairs to maintain the premises. The tenant, for their part, must pay the landlord the rent specified in the agreement within the period set out in the agreement. In addition, unless otherwise agreed, the tenant bears the costs of routine maintenance of the premises, i.e. the costs of cleaning, painting and decorating, minor repairs to installations and the like. It is important to note that the tenant has no right to sublet the premises or any part of them unless otherwise agreed. After the lease ends, the tenant must return the premises to the landlord in the condition in which they were received, and has the right to remove any fixtures they installed in the premises, provided this does not damage the premises and the landlord has not recognised the investment through a reduction in rent.

Termination of a Commercial Lease Agreement by the Tenant

The tenant may also terminate a commercial lease at any time, regardless of contractual or statutory provisions on the lease term, if the landlord fails, within the reasonable period the tenant has given them, to bring the premises into the condition in which they are obliged to hand them over or maintain them, or if the landlord fails to fulfil their obligations under the agreement or the Act. The lease does not end upon the death or change in legal status of the tenant, unless the agreement provides otherwise. It is important to note that the court has jurisdiction to resolve disputes between landlord and tenant over their mutual rights and obligations under the lease agreement and over the vacating of the premises.