Basic terms ...
It often happens that some terms related to renting /leasing of apartment are not clear. To avoid any of mistrust, uncertainties, and misunderstanding, we have created for you a brief overview of the terms.
Read what earnest and deposit are, about mediation agreement, undermediation agreement, ownership documents and their function.
- Leasing is a process in which the lessor leases real estate to the lessee.
- Renting is a process in which the lessee rents real estate from the owner.
- Earnest is the determined amount of money by which the lessee guarantees that at some future period they will rent an apartment and that the lessor will lease an apartment to them. It serves as an assurance to both sides in case of possible changes in renting real estate.
- If the lessee withdraws from renting the apartment, the lessor retains the deposit check, and if the lessor withdraws from leasing, the earnest is returned to the lessee.
- Deposit is the determined amount of money by which the lessor is ensured that real estate will be returned to its original condition and in most cases it is taken and held at the Mediator (given that they have no interest in being on anybody's side, but that that they will professionally make decision and distribute deposit).
- In the event that after leaving of the lessee an apartment is returned to its original condition and all bills incurred during the lease relationship are settled, the deposit is returned to the lessor.
- In cases when an apartment is not returned to its original condition and not all bills incurred during the lease relationship are settled, the mediator has the right to reimburse it from the deposits and to return the rest of the money (if there is some with the billing list) to the lessee.
- It is also important to respect the notice period which is defined by the lease contract. It can be agreed that part of the deposit remains with the lessor in case of leaving of the lessee before the agreed lease period and thereby the deposit increases when compared to the common practice and often amounts to the value of the two agreed rents.
- Ownership documents are an important part when signing the mediation agreement.
- The owner of a real estate thus shows that they are a real owner and that there is no possibility of re- renting.
- According to the Law on Mediation, the lessor is bound to submit to the mediator original documents for reviewing them and to submit photocopies of them.
Ownership documents are:
- Owner's list, and if for some reason ownership is not changed and registered, then it is also necessary to submit: The purchase agreement, The gift agreement, The lifelong care contract,
- Probate proceedings..., the documents that clearly show that the owner concerned is the owner of a real estate or that they have the right to sublet it or have it at their disposal.
- It is also necessary to attach an identification document, bank account number to which the rent will be paid and settled bills which become an obligation of the lessee, the detailed home address and the address of the owner at which they would like to receive information related to the apartment and the lease relationship, e-mail and phone number for the contact. Every ownership document must contain 5 things:
- The name of the owner who is the subject of the Mediation agreement
- The address of the real estate
- Cadastral parcel
- Cadastral municipality
- Stamp of certification (by municipality, court, notary...)
The mediation agreement:
- This is the contract defining the rights and obligations of the signatories, in this case the mediator and the client (the owner of the apartment and/or the lessee).
- The mediation agreement, in addition to the rights and obligations of the mediator and the client, in particular, contains information on the mediator and the number under which it was entered in the Register, on the nature and the essential elements of a legal transaction for the conclusion of which the mediator mediates , on the amount, manner and the date of the payment of the intermediary fee, the period of validity of the contract and the type and cost of the additional services, if contracted, also on the obligations that the Mediator has towards the Client and the role they will perform during this lease relationship.
Types of mediation agreements:
- The mediator can take complete care during the lease, to control the bills, to forward the rent to the lessor and take care of possible delays,
- To mediate in the provision of services of repair and cleaning when required and to regularly inform the lessor about it, with their permission to carry out repairs and charge them from the rent received in case they relate to the basic maintenance of the apartment (which is the lessor’s liability).
- In such a relationship the Lessor is obliged to pay services to the Mediator by paying the twelfth part of the rent for the entire duration of the lease relationship, or by paying a monthly rent once a year to the Mediator.
- In the case of termination of the lease relationship lasting less than a year, the Lessor has the right of return of a part of the the fee they paid in advance to the Mediator expecting the tenant to stay for a full year.
- Additional services, extension of the lease agreement, communication and mediation, defined by the mediation agreement will not be charged from the Lessor additionally.
- This kind of relationship is recommended for people who are not in a city where real estate for renting is located or are limited in time and they want the Mediator to take over the role. Real estate of this type belongs to the priority real estate and has primacy in renting.
- In this case, the Mediator guarantees the Lessor the return of real estate in the condition that existed on the day of the handover of a real estate, paid bills and rent during the stay of tenants in a given real estate.
- The mediator makes the handover list, lease agreement, deposit agreement and they are paid deposit for the duration of the lease agreement.
- The mediator in this case enables the direct communication between the owner and the lessee.
- All other services are charged according to the price list of the Mediator, in case the Lessor needs them. The Lessee continues to maintain communication via the Mediator and the Mediator is always there to meet their needs in case they need any help.
- At the end of lease relationship, the mediator is obliged to compare the state of the real estate handed over and make a record of it, and to make a distribution of the deposit in accordance with the obligations defined in the deposit agreement.
- This kind of cooperation is recommended for persons who have enough time to devote to the tenant and want to take care of real estate themselves.
- We want to warn you that nevertheless the different interests of the contracting parties can lead to misunderstandings, but there are handover lists and intermediary record that can always be used as proof of the true state of affairs.
- In this case, the Lessor is obliged to pay the mediator the fee, which is the amount of one monthly rent and the Mediator is not obliged to return part of the fee in the event that the Lessee gets out before the expiry of one year, and also has no right to charge intermediary fees in the case of extending the lease relationship after the expiration of one year.
- The service of handover at the end of the lease in such a case will be postponed and the deposit remains with the Mediator by the end of the lease relationship
- The mediator associates the lessor and the lessee and the mediator may or may not make the lease agreement.
- The deposits are agreed by the lessee and the lessor, and are not held by the Mediator.
- The Mediator charges the fee for its mediation, which amounts to one monthly rent and the obligations of the Mediator end there.
- The Mediator cannot be further responsible for premature departure of the Lessee, nor has the obligation to return part of the rent to the Lessor, nor is responsible for damages if any, nor is liable on any issue. The Lessee signs the list in which they consent with the relationship with the Lessor and any liability of the Mediator is canceled.
- This kind of relationship is not really recommended because it is very risky and there can often be disagreements and failures to find a solutions and therefore the involvement of the Court is inevitable, as well as the emergence of unnecessary costs.
- At the end, we leave it to you to decide what kind of cooperation you want.
- By the lease agreement both the lessee and the lessor, as contracting parties, regulate their rights and obligations regarding real estate. It defines the time period of the lease, the amount of rent, the amount of deposits, obligations of both parties and what to do in situations where the responsibilities of one or the other party are not fulfilled.
- The lease agreement may be bilateral legal business (agreement) by which one party (the lessor) is obliged to hand over for the use to the other party (the lessee) a certain durable good or a certain property right, and the lessee is obliged to pay them a fee for that and that after the end of the agreements returns to them the same good or the right.
- The lease agreementt can be trilateral legal business as well (agreement), which further regulates the obligation of the Mediator, who in this case appears as a third party, and the rest is the same as in the bilateral agreement.