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Commercial lease 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 constantly rented.
Before entering into this "long-term relationship", the potential tenant needs to check the "background" of the leased premises and make sure that the leased object really belongs to the owner, he has no litigation, mortgages or arrests.
It will be very insulting if you are left without a lease due to the seizure of property or the "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 Estate Rights and the owner will provide you with a certificate from this register. However, it may be irrelevant. You can get a new certificate yourself. See the step-by-step instructions 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 (entry is made in the register if the lease term exceeds 3 years) and the like.
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, as well as the history of changes of owners and encumbrances.
In practice, we had a case when the object of rent of 2016 construction was put into operation in a simplified manner as such, which was built before 1992.
Ownership of such an object can be revoked, which will lead, at least, to the termination of the provision of utilities.
If the ownership of the lease was issued before the operation of real estate registers, the owner of the lease must provide you with documents proving ownership at the time and a certificate from the BTI on the existence of a registered ownership of real estate.
Litigation
We recommend that you check for litigation regarding the leased object and its owner. Such a check can be performed using the sites https://court.gov.ua/fair/ and http://reyestr.court.gov.ua/.
On the site https://court.gov.ua/fair/ you can view the available lawsuits of the owner of the leased object by entering his full name or the 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.
The availability of lawsuits on the leased object can be checked on the website http://reyestr.court.gov.ua/. For this purpose it is necessary to note in search the address of object of rent or the code of real estate.
Some negative court decisions on 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 in force 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 agreement for 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 which is specified in the lease agreement. Information about him must match the information from the technical passport and the certificate from the state register of 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 timing of repair work. The rent for this period is reduced or not charged at all by agreement of the parties.
The fact of transfer of the premises to the lessee is certified by the act of acceptance-transfer of the rendered 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 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, "Premises rent cannot 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 landlord'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 landlord without any significant grounds. This provision is not mandatory for the lease agreement and may reduce the term of the lease. We recommend insisting on its exclusion in the absence of substantial grounds for unilateral termination of the contract.
The lease agreement by agreement of the parties may specify penalties: fine and penalty. It is important that they are reciprocal, established for significant breaches of contract and encourage the other party to comply with 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 the like. 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 room. And only you have a choice: to take a risk or to refuse rent of this object.
Find the risky conditions of the lease agreement, individualize them in your favor. Note the key aspects we have described in this article.
Guided by this minimal set of means of checking commercial real estate and lease agreements, you will be able to protect yourself from hidden risks.
Contact experts for a qualified inspection of the commercial real estate of the leased object.
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