Экзамен зачет учебный год 2023 / 06 Czech Republic

Czech Republic

The other type is a contract for a fixed term. In addition to the term expiration, this kind of contract can be terminated prematurely in writing with specification of one of the reasons established by the Lease and Sublease of Non-residential Premises Act. The statutory reasons for termination of the lease are usually in connection with the breach of an obligation by the other contracting parties. The statutory reasons for termination of the lease can by excluded by the agreement of the parties and specific termination reasons may be stipulated.

In general, the contracting parties are completely free to negotiate the rent price and, therefore, any rent increase. The rent increase is usually bound to some objective criterion, such as inflation or some kind of index (e.g., the consumer price index), and the calculation is usually very complex. Besides the rent, the contractual parties have to set clear regulation of costs that are to be rendered by the tenant to the landlord (such as electricity costs, cleaning costs, etc.) The provision of the rent and the regulation of the auxiliary costs have to be regulated separately, otherwise the lease agreement could be deemed indefinite, and therefore invalid.

For the purpose of securing the fulfilment of the tenant’s monetary obligations arising from the lease agreement, a deposit (or bank guarantee) amounting to three to six months’ rent is common practice.

If the parties do not stipulate otherwise in the lease agreement, the tenant is allowed to sub-lease the premises only with the prior written consent of the landlord. The sub-lease contract must be made in writing.

The tenant has a duty of care as regards the premises to prevent damage from occurring. The Lease and Sublease of Non-residential Premises Act and the Civil Code do not regulate insurance; nevertheless, it is a very common provision in lease contracts to ensure the obligation by insuring the premises. The costs of insurance are usually borne by the tenant.

Regarding the change of control regulation, the Lease and Sublease of Nonresidential Premises Act prohibits termination of the lease due to the ownership transfer of the leased premises by both the tenant and the landlord. The regulation is nonmandatory and the parties may agree otherwise.

The landlord must maintain the premises in good condition to ensure the due performance of services connected with the premises, and to ensure complete and peaceful exercise of the tenant’s rights. The tenant must notify the landlord without undue delay of the necessity for any repairs that must be made by the landlord. If the tenant does not allow the landlord to undertake these repairs, it will be liable for any damage caused by the breach of the notification obligation.

VIII OUTLOOK AND CONCLUSIONS

Based on the adoption of the new Civil Code, major changes in real estate law and practice are forthcoming. The new Civil Code completely modifies the current legal regulations and introduces some totally new legal institutions to real estate law. The practical impact on real estate development and the possible legal difficulties connected with the implementation of the new Civil Code into day-to-day business are hard to predict.

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Notwithstanding the upcoming legal effect of the new Civil Code, legal acts concerning real estate are constantly amended as a reaction to the legal issues and problems arising in practice. The new legal regulation may affect real estate development and business in 2012.

Based on the amendment of the on Entries of Ownership and Other Rights in rem to Real Estate Act,8 new regulations with respect to the entry of the rights into the land register have been adopted with legal effect from 1 January 2012. The purpose of the amendment is to resolve the current problematic legal issues regarding entries in the land register.9 The main change concerns the introduction of a new legal institution, the ‘note of litigiousness’, which is entered into the land register based on a notice from a court about commenced proceedings regarding the determination of ownership of the real estate or invalidity or rescission of a legal act (on the basis of which a right in rem should be registered), or on the motion of the plaintiff. The entry of the note of litigiousness does not generally lead to the interruption of cadastral proceedings and the following legal inability of the owner of the real property disposing of it (such as to establish easements, mortgages, etc.) and enables the parties to assess the potential risks and to make the corresponding decisions. Furthermore, cadastral offices will now examine not only possible mistakes on the disclosed deed (e.g., court decisions), upon which the right shall be entered into the land register, but also if the deed corresponds to the current state of the land register. This regulation will likely avoid cases where the land register authority had to record ownership rights on the basis of a court decision, even if the owner entered in the land register was not a party to the court proceedings and therefore does not know the reason for the loss of its ownership right.

Based on the amendment of the Act on Value Added Tax, the reduced rate of VAT was increased from 10 per cent to 14 per cent with legal effect from 1 January 2012. As the reduced VAT applies to construction works on residential real estate, the price of new residential projects has risen.

A large and significant amendment of the Building Code will be passed in 2012. The main goal of the amendment is to perfect the current regulation of the procedures and legal institutes regulated by the Building Code so that they do not lead to interpretation problems, to remove unreasonable differences with respect to the general administrative laws, and to simplify administrative procedures leading to the issuance of planning permits, building permits and occupancy approval.

8No. 265/1992 Coll.

9Namely, with respect to the discrepancies between the records in the land register and the actual legal state, and to provide more legal protection to the party entered in the land register as the owner of the real estate.

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Appendix 1

About the Authors

Martin Kubánek

Schoenherr Attorneys at Law

Martin Kubánek is the managing partner of Schoenherr in Prague. He specialises, in particular, in corporate/M&A including capital markets, real estate law, and corporate restructurings, and frequently acts for international clients investing in the Czech Republic as well as on outbound investments of Czech companies.

Mr Kubánek studied law at the Charles University in Prague, and was admitted to the Czech Bar Association in 1991. Prior to joining Schoenherr he was a partner in the Prague office of Gleiss Lutz, of which he was a co-founder (1993 to 2008). He was seconded to Patterson Belknap law firm in New York (1994) and Macfarlanes in London (1992).

He has broad experience in advising in real estate development, covering all areas from securing, buying and developing of property rights up to the stage of completion of the building project and its subsequent sale or lease. He has also been involved in numerous foreign investments into the Czech Republic, in the real estate, media, insurance, heavy industry and telecoms sectors. His clients include logistic companies, real estate investment funds and retailers. He is fluent in Czech, English and German.

Pavla Šlapáková

Schoenherr Attorneys at Law

Pavla Šlapáková is an attorney at law at Schoenherr’s Prague office, where she specialises in all aspects of real estate and public law with a focus on construction law. She has experience in advising transnational companies in the acquisition of real property in the Czech Republic as well as in constructing and operating commercial and retail centres.

Ms Šlapáková studied law at the Charles University in Prague and at Ruprecht- Karls-University in Heidelberg, Germany. She is a member of the Czech Bar Association. She advises international clients on their market entry in the Czech Republic. She is a part of team that provides full-service transaction support in realisation of transnational

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About the Authors

deals in the real estate sector. Ms Šlapáková provides assistance to various clients on real estate matters, including all-round consultancy in lease matters. She is fluent in Czech, German and English.

Schoenherr Attorneys at Law

Nám Republiky 1079/1a 110 00 Prague 1

Czech Republic

Tel: +420 225 996 500

Fax: + 420 225 996 555 m.kubanek@schoenherr.at

www.schoenherr.eu

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