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A lease agreement for commercial premises is usually concluded for a long term. Constant change of premises is not beneficial to either party. The tenant adjusts the space for his needs, and the landlord needs the premises to be permanently rented.
Before entering into this "long-term relationship", the potential tenant should check the background of the leased premises and make sure that the leased object really belongs to the owner, there are no lawsuits, mortgages or arrests.
It will be very unfortunate if you are left without a lease due to the seizure of property or "bondage" terms of the lease. Use our tips to avoid trouble with rent.
Documents confirming the right of ownership
Most likely, the leased object is already registered in the State Register of Real Property Rights and the owner will provide you with a certificate from this register. However, it may be irrelevant. You can get a new help yourself. Step-by-step instructions see here.
The certificate will contain information about the registered ownership of the leased object, the presence or absence of a mortgage, arrests, lease of this object (the entry is made in the register if the lease term exceeds 3 years), etc.
For a more thorough inspection of the leased object should obtain an extended certificate from a notary. It will contain information about the documents on the basis of which the leased object was registered, and the history of changes of owners and encumbrances.
In practice, we had a case when the leased object of construction in 2016 was put into operation in a simplified manner as one that was built before 1992.
Ownership of such an object may be revoked, which will lead, at least, to the termination of the provision of utilities.
In the event that the ownership of the leased object was issued before the operation of real estate registers, the owner of the leased object must provide you with documents proving ownership at that time and a certificate from the BTI on the registered ownership of real estate.
Litigation
We recommend that you check for litigation regarding the leased property and its owner. Such verification can be carried out using sites https://court.gov.ua/fair/ and http://reyestr.court.gov.ua/.
Online https://court.gov.ua/fair/ you can view the available court cases of the owner of the leased object by entering his name or name in the field "Party to the case".
It is possible that he was once involved in various fraudulent schemes or engaged in other illegal activities. Having such disputes can lead you to refuse to rent the property due to distrust of its owner.
You can check the availability of lawsuits regarding the leased object on the website http://reyestr.court.gov.ua/. To do this, you must specify the address of the leased object or real estate code in the search.
Some negative court decisions regarding the leased object may lead to the revocation of ownership of it.
Also, by court decision, the leased object may become the property of another person. In this case, the lease will remain valid with you, unless otherwise provided by the terms of the lease agreement. However, this does not mean that the new owner will not create obstacles for you to own the rented premises.
Lease agreement
The lease of commercial real estate is concluded in writing. If the term of the contract exceeds 3 years, it is subject to notarization and state registration.
Pay attention to the object that is specified in the lease agreement. The information about him must coincide with the information from the technical passport and the certificate from the state register of real rights to real estate.
The lease agreement may provide for the preparation of the premises for their intended use. The parties agree on the list, procedure and terms of repair work. Rent for this period by agreement of the parties is reduced or not charged at all.
The fact of transfer of the premises to the lessee is certified by the act of acceptance-transfer of the provided services. It indicates the state of the object at the time of transfer to the tenant. After the termination of the lease, you will need to return the premises in the condition that was recorded in the act of acceptance-transfer of the object. Therefore, if the object has defects or worn condition, you must specify this in the act.
Agree with the landlord the possibility of increasing the rent and the maximum amount of such increase. For example, "Rent for premises may not be increased by more than 5% in two years."
As a general rule, current repairs of the leased premises and all its systems are carried out by the lessee, and major repairs are carried out by the lessor. However, the parties to the contract may distribute these responsibilities differently.
You should pay attention to the clauses of the contract on liability for accidents that may occur in the rented premises. It would be fair to say that the tenant should be liable only for accidents that occurred through his fault. It is also advisable to provide for the lessor's responsibility to be responsible for accidents in public networks.
The lease agreement may provide for the possibility of unilateral termination of the agreement at the initiative of the lessor without any significant grounds. This provision is not mandatory for the lease agreement and may shorten the lease term. We recommend insisting on its exclusion in the absence of substantial grounds for unilateral termination of the contract.
The lease agreement with the consent of the parties may specify penalties: fine and penalty. It is important that they are reciprocal, established for significant breaches of the contract and encourage the other party to perform it.
In addition to the general penalties, the lease agreement usually establishes the landlord's right to unilaterally prevent the tenant from entering the leased premises, terminate the supply of utilities, and so on. Such rights of the landlord should be established only for significant violations of the contract.
Inspection of commercial real estate is a prerequisite for its lease. During the inspection, you may find circumstances that may negatively affect you in the future, or even persuade you not to rent the premises. And only you can choose: take a risk or refuse to rent this object.
Find the risky terms of the lease agreement, individualize it in your favor. Note the key aspects we have described in this article.
Guided by this minimal set of means of inspecting commercial real estate and the lease agreement, you will be able to protect yourself from hidden risks.
For qualified inspection of commercial real estate of the leased object, contact the experts.
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