Recent legislative changes in the field of leasing business premises

The act amending the Housing Act (SZ-1E), which entered into force on 19 June 2021, introduced an important new feature, namely that the Act on Business Buildings and Business Premises (hereinafter referred to as “ZPSPP") ceased to be in force with the application of this amendment.

However, the act in question still applies to agreements concluded on the basis thereof before its entry into force. Consequently, as of 19 June 2021, the provisions of the Obligations Code (hereinafter referred to as the “OZ”) and the provisions of the lease agreement itself are observed for leases of business premises. For the parties of the lease agreement this means greater freedom in regulating the lease relationship as the detailed and mandatory rules of the ZPSPP no longer apply.

The most relevant change is the regulation of the termination of the lease agreement for business premises, both in terms of the deadline and the method of termination. Agreements concluded after 19 June 2021 are no longer subject to the obligation of terminating an agreement for an indefinite period through a judicial proceeding, and the minimum one-year notice period for such agreements no longer applies.

In accordance with the OZ, the lease agreement, the duration of which is not determined and cannot be determined from the circumstances of the agreement, is terminated with a notice each party may issue the other, subject to a certain notice period. If the notice period is not determined by an agreement, by law or by local practices, then this period is eight days, while the notice may not be handed at an inappropriate time. No lawsuit is required to terminate the lease agreement, a written notice served to the other contracting party is sufficient.

The termination of the ZPSPP also brings other changes, such as the fact that after the termination of the lease relationship for a definite period, the lessor will have to immediately object to the use of the premises should they want to prevent the change of the lease relationship into an indefinite one.

There has also been a change regarding the termination of the agreement due to non-payment of rent where the lessor will now be able to terminate the agreement as early as 15 days after they have sent a payment reminder. Under the previous arrangement, however, the lessor was able to withdraw from the agreement only two months after having sent the payment reminder.

The contracting parties will now have to explicitly exclude the possibility of subleasing the premises in the agreement itself, otherwise, in accordance with the OCZ, the lessee will be able to further lease the subject of the lease if this does not cause damage to the lessor.

It may seem that a very valuable advantage of the new regulation is undoubtedly a less complex termination of the lease agreement, however, some caution is certainly required in this process. The intention of the contracting parties, especially if the agreement is initially concluded for an indefinite period, is undoubtedly a long-term legal relationship, thus any kind of short notice period and a less complex way of termination will be at the discomfort of one of the parties.

The other above-mentioned changes, as well as the fact that the provisions of the Obligations Code do not regulate the lease relationship in such a detailed manner as the ZPSPP did, require the parties to determine the content of the lease relationship in greater detail before concluding the lease agreement.

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