Expert appraisal of the lease agreements

Dec, 17 2021

Contents:

What is a lease agreement and what is it for. 

The lease agreement is a document that regulates the relationship between the owner of the property and a person who wants to temporarily own or use it. Rent is a paid, mutual agreement between the landlord and the tenant.

Examination of lease agreements is a comprehensive legal service designed to ensure the legality, transparency and mutual benefit of the transaction. Legal assistance from experienced lawyers before signing a contract allows you to prevent conflicts and even financial losses.

Subject of the lease agreement

The lease agreement must contain information describing the property. The owner or an authorized person may transfer land plots, enterprises, buildings, structures, equipment, transport and other objects to the other party. The Civil Code allocates separate sections on the rental of movable property, transport, and rental of residential premises.

Rent payment

The amount of the fee, as a general rule, is not an essential condition of the lease agreement, if we are not talking about buildings and structures. The lessor has the right to demand payment from the lessee for the use of the property. However, the property can be transferred for use not only under a lease agreement, but also on the terms of gratuitous use.

Term of the lease agreement

The term of the contract is the period of time during which the terms of the agreement are valid and the obligations of the parties established by it are fulfilled. The law does not separate the concepts of “term of duration of the lease agreement” and “lease term”. However, some courts explicitly state that these concepts are not identical, and accordingly, the terms may not coincide.

Procedure for the transfer of immovable property

The right to lease a thing is held by its owner or an authorized person. Moreover, the lessor must own the right of ownership not at the time of conclusion of the contract, but at the time of transfer of the thing to the lessee.

The general provisions of the lease agreement do not provide for any requirements for the transfer of property. Accordingly, the parties may agree on it at their discretion. However, we recommend conducting an examination of lease agreements before finalizing the terms: only a lawyer can provide for all the subtleties and point out the shortcomings of the agreement.

Procedure for preparing a lease agreement

Contract preparation begins with a description of the parties. If they are individuals, then indicate the surnames and initials, and if legal – all the details.

This is followed by a section on the subject of the agreement, which becomes the leased property. It is described as fully as possible so that it can be uniquely identified, and ambiguous interpretations of the section were not allowed.

It is also important that the landlord confirms: he is the owner, and the property is not under arrest, is not the subject of collateral and there are no other obstacles in his possession. An important circumstance is also an indication of the document that is issued at the time of physical transfer.

The terms of the lease agreement can be expressed in the form of sections indicating the basic rights and obligations of the parties, the need to improve the leased property, the amount and procedure of payment, the possibility of redemption, and so on.

Separately, the possibility of subletting should be discussed and fixed. Because without the permission of the owner, the tenant does not have the right to transfer the property to third parties or lease it. If such a need may arise, it is important to agree in advance with the landlord on the terms and obtain his written consent. Otherwise, he will have the right to demand termination of the agreement and compensation for damage, payment of a fine.

The need for professional analysis of the lease agreement

Lawyers should be involved in the preparation of documents before the parties write them. However, it is possible to study already concluded deals. What does the examination of the lease agreement include:

  • analysis of the lease agreement of movable or immovable property;
  • identification of property, financial, and tax risks; 
  • recommendations on which conditions in the draft agreement should be excluded, changed or added;
  • developing a reasoned position in negotiations;
  • recommendations on the technique of registration and signing of the lease agreement; 
  • a map of the documents being compiled and a document flow schedule;
  • consulting and offering solutions to possible problem situations;
  • development of an action plan to amend the agreement;
  • development of an action plan and proposal of solutions for termination of the contract.

We provide a full range of services related to the legal support of the lease. We advise individuals and legal entities, develop the texts of contracts and analyze the documents already drawn up. 

Author of the article
Expert appraisal of the lease agreements
Valentina Khlavich
Managing Partner
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