According to the current legislation, an individual or legal entity that owns non-residential real estate can dispose of it at its discretion, including renting it out.
Как rent out non-residential premises and what should the owner know about? Let's try to figure it out.
What does it mean to lease non-residential premises
A lease of premises is a transaction in which the owner transfers property for temporary use on the basis of a lease agreement. The document prescribes the procedure for paying rent, the responsibility of the parties and other features of cooperation. As a rule, such agreements are concluded between legal entities or individual entrepreneurs. By the way, if you are thinking about buying real estate, we recommend that you contact our professional luxury real estate agency THE Capital.
Features of legislation
The legislation of Ukraine establishes some restrictions on the lease of non-residential and residential real estate. In particular, sole proprietorships paying a single tax have the right to rent premises under certain restrictions, in accordance with article 291.5.3 of the tax code:
- Living quarters - should not be more than 400 sq.m.
- Non-residential premises - should not exceed 900 sq.m. Non-residential include offices, basements, retail outlets, warehouses, shops.
Before renting out non-residential premises, you need to take into account that the entrepreneur has the right to sublease. If you plan to rent space in excess of the established limits, this violates the rules of the tax code, and the income received by such a businessman is taxed on a general basis.
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Only the object that has been registered and handed over in the manner prescribed by law can be leased or subleased. You cannot use the unfinished or not put into operation premises.
Renting out non-residential premises: points that need to be considered by the landlord
The first thing a landlord thinks about is how to find a bona fide tenant. You can do this yourself, but it's safer to contact a professional realtor of our agency. In addition, experienced lawyers are ready to advise on all issues of interest.
Read more:: Renting out an apartment: how to write an ad correctly?
When the owner is ready to rent out non-residential premises, he must discuss the following points in advance:
- For what purpose is the premises needed, what is the tenant planning to do on its territory. This will allow you to determine the exact sanitary, urban planning and fire safety standards. Particularly harsh conditions are usually imposed on premises located in multi-storey buildings.
- Do you need repairs, redevelopment in accordance with the peculiarities of operation. If there is a need for work, they will be organized within the agreed time frame. Who will pay for the repair and construction activities and in what order they will be carried out is indicated in the lease - this clause is part of it.
How to rent out non-residential premises: what is specified in the contract
If the quality of the premises and the rent are satisfactory to the tenant, you need to start concluding a contract. Ideally, it is better to draw up the document in our real estate agency with the participation of an experienced lawyer. Before renting out non-residential premises by signing an agreement, you should check that it contains the following information:
- Description of the object with its exact location and its market value.
- Lease terms, conditions for the conclusion and termination of the contract.
- There must be information about whether the tenant has the right to sublet the premises. If so, on what terms.
- It is prescribed for what conditions the rented premises are planned to be used.
- The rental amount, which is indicated in a non-standard (for residential premises) format, indicates the price of 1 sq. meters, based on the market rental value in Kiev and Kiev region. Also, the right of the lessor to change the rental price and its indexing is prescribed.
- Features of repayment of utility bills - who pays, in what order, terms. This item also includes the procedure for paying for the Internet.
Leasing of non-residential premises is carried out with the obligatory discussion of liability for late lease payments and other violations of the terms of the contract.
Termination of a lease agreement
The lease agreement must contain a clause about the order in which its termination should take place. This will allow the property owner and tenant to avoid litigation and monetary losses. If for some reason this issue was not recorded in the document, the legislation interprets such situations as follows.
- When both parties agree to terminate the contract early, then its termination occurs without claims and additional waste. The initiating party must notify about the termination in advance - at least three months in advance. After that, an appropriate agreement is drawn up, which will be the documentary basis for the liquidation of the contract.
- The agreement is terminated through the court on the initiative of either of the parties if the partner party has repeatedly violated the terms of the contract. Expect the length of such an agreement to be lengthy and costly, as in the early stages of litigation, all costs are borne by the initiator.
Leasing non-residential premises requires prior preparation and legal knowledge, including current legislation. With the right approach, renting will be mutually beneficial for both the landlord and the tenant. If necessary, for all questions, you can contact our lawyers. Was the post interesting and helpful? Subscribe to our updates real estate blog and get the latest publications from the real estate agency THE Capital.
