Lease agreement - what you need to know

A lease is one of the most common legal contracts used by both landlords and tenants. Whether you are renting a home, an office or a commercial premises, it is important to know your rights and obligations.

In this article, we'll look at the basic elements of a lease, the key clauses, and the risks you should anticipate.

1. What is a lease agreement?

A lease is an agreement between two parties - a landlord (usually the owner of the property or a tenant with the right to sublet) and a tenant (the person who uses the property for a fee). This contract sets out the terms under which the tenant can use the property for a set period in return for a monthly rent.

2. Mandatory elements of the contract

Details of the parties names, personal identification number (for natural persons) or UIC (for legal entities), address for correspondence.
Description of the property - exact address, type of property (apartment, office, shop, etc.), square footage, furnishings.
Amount of rent and method of payment - specify the amount, payment term (e.g. by the 10th of the month) and method of payment (bank transfer, cash..).
Term of the contract - can be fixed term (for a specific period) or open-ended (until termination with notice).
Deposit - between one and three months' rent is paid by the tenant as a guarantee against any damage to the property, unpaid rent, unpaid utility bills, maintenance fees, etc.
Rights and obligations of the parties - who bears the cost of maintenance, repairs, supplies, etc.
Terms of termination - notice to quit, penalties for breach of contract.
Special clauses - if the property to be rented is part of a retail outlet (e.g. a shopping mall or the increasingly popular retail parks);
Clauses for repairs and works, commissioning (ако са относими).

3. What should the tenant know?

The tenant should read the contract carefully and make sure that its terms are clear and acceptable. Here are a few important points that should be clarified:

What are the costs that are due apart from the rent - maintenance fee, garbage fee, local tax, etc. ?
Who covers the cost of repairs and maintenance of the property?
Are the costs of electricity, water, internet and other utilities included in the rent?
Does the tenant have the right to rent out the property to third parties?
What are the conditions for terminating the lease?
What are the conditions for the return of the deposit upon vacating the rented premises?

4. What should the landlord know?

It is important for the landlord to protect his property and avoid risks associated with incorrect tenants.

It is advisable:

Require a security deposit as a guarantee against damage.
Include in the contract penalties for late payment of rent.
Specify specific conditions for the use of the property (e.g. prohibition of alterations without permission).
Insert a notice period for termination of the lease.

5. How to avoid risks?

To avoid future disputes and problems it is important:

The contract must be signed in writing.
When renting a home, take an inventory of the condition of the property and furniture.
Payments should be made by bank transfer to have proof in case of disputes.
Consult a lawyer if in doubt about the contents of the contract.

6. Registration of a lease agreement

The Bulgarian legislation provides for the possibility to register the lease agreement in a property register;
In this way the contract is given publicity;
The main legal consequence of the registration of a Lease Agreement is that it becomes binding on subsequent owners, which in turn gives a guarantee to the tenant;
Registration is very often used in commercial or office leases where the relationship is considerably more complex and diverse and requires more regulation and a high degree of legal certainty;

Why is it important to consult a real estate lawyer?

Consulting a real estate lawyer before signing a lease can save you future problems, especially if it involves a long-term lease, high rent or specific clauses.

How can KGK Law Firm lawyers help you?

Checking the legality of the contract;
Explaining your rights and obligations;
Checking termination clauses;
Protection from unfair clauses;
Avoiding future disputes;
Assistance in disputes.

A lease is an important legal document that should protect the interests of both parties. Before signing such a contract, make sure you are aware of all the terms and clauses to avoid future problems. Whether you are a tenant or a landlord, being well informed is the key to a successful and hassle-free rental relationship. Consulting a specialist can save you significant problems and financial losses in the long run.