How to draw up a contract for renting an apartment: the main nuances

If you plan to rent or rent residential property, the contract must be concluded under any circumstances. However, the document often differs in content, the list of its conditions may not suit the landlord or tenant.

There are still many nuances that both parties should be aware of. Questions about how to draw up an apartment rental agreement from a legal point of view, what risks await “shadow” landlords, why documentary cooperation is needed, and other points will be discussed in the article. By the way, if you are thinking about buying real estate, we recommend that you contact our professional luxury real estate agency THE Capital. 

Why you need to know how to conclude an apartment rental agreement

A lease agreement is a legal document where the owner of the property and the tenant list the terms of the transaction when the property is rented out. The main purpose of the agreement is to regulate relations and protect the parties in the event that any controversial issues arise during the lease process. An additional help in such situations is the Civil Code - all the nuances of renting and renting a home are spelled out in Chapter 59. Before you draw up a lease agreement for an apartment, you need to distinguish between rent and lease:

• The document is a contract of employment when individuals are its participants.
• The document is called a lease agreement, when one of the parties is an individual, the other is a legal entity. The rental object can be an apartment, warehouse or office space. 

We will tell you how to correctly draw up a lease agreement for an apartment, namely, to issue a lease legally correctly.

Read more:: How to rent out non-residential premises? 

How to draw up an apartment rental agreement: the need for a realtor's services

Currently, it is quite difficult to find suitable housing for rent from the owner directly, most often intermediaries - realtors and real estate agencies - act between landlords and tenants. Whether it is worth contacting an intermediary is an individual question, there are positive and negative sides. The first disadvantage is the need to pay a commission to a specialist for the work. However, if you contact our real estate agency, the question of how to correctly draw up an apartment rental agreement will disappear by itself, because:

• The agency offers only the best premium properties from trusted owners.
• Realtors work up to a positive result.
• There are ready-made, legally correct lease agreements.

How is a contract for renting an apartment in Ukraine drawn up?

The procedure for drawing up and concluding this document is regulated by law, in particular Chapter 59, Article 811 of the Civil Code. According to the legislation, the following requirements must be met:

• The document is only in writing.
• After signing, it is subject to notarization.
• Further, the landlord must report the transaction to the tax authorities at the place of residence.

Flat rent involves the payment of a fee to the Pension Fund, namely: 1% of the amount of each payment, a military fee of 1,5% and a state duty of 0,01% of the amount of the contract. Also, the landlord needs to pay tax - 18% of the transaction. It is not surprising that many owners are not even interested in how the apartment lease agreement is concluded; they want to remain in the “shadow”.

What will happen if you do not conclude an agreement

If it is revealed that housing is being rented unofficially, the owner risks losing a large amount that will go to pay off fines:

• Administrative - within 138 UAH.
• Payment of all unpaid taxes and penalties from the pension fund and tax authorities.
• If all fines are not paid on time with a delay of up to 30 days, a penalty is charged in the amount of 10% of the accrued taxes. If there is a delay for a longer period, the fine is doubled.

Therefore, a homeowner should think about how to conclude an apartment rental agreement. This is necessary in order not to be at an even greater loss.

Read more:: Renting out an apartment: how to write an ad correctly? 

How to write an apartment rental agreement or what should be included in its content

The document prescribes all the technical nuances, location, situation, we note the main thing:

• The exact location of the apartment. In this section, you should also indicate the footage, data on property documents - the number in the register and the date of issue.
• Passport data of the lessor and tenants - in full, including numbers, series, date of issue, address of official registration.
• The size of the board. This issue is usually discussed before signing an apartment rental agreement. The amount should be registered only in hryvnias, so that there is no link to the dollar exchange rate, the term, the procedure for making the payment must be indicated.
• The period of the contract. Usually limited to 1 year. However, the law allows not to indicate the exact date. In accordance with the Civil Code of Ukraine (Art. 821), if the document does not indicate its validity period, then the apartment is rented for 5 years by default. If the lease conditions have changed and the premises need to be vacated earlier, the owner will warn you no later than 3 months before leaving.
• Duties of the parties. Concerning the maintenance of the apartment: what the landlord prohibits, for which the tenant must be responsible. These points are also discussed in advance before concluding an apartment rental agreement.

The document contains the meter data at the time of the arrival of the residents. In the act of acceptance and delivery of property, the furniture and appliances that are present in the apartment are listed, their condition, damage and malfunctions, if any, are described. Some landlords insist on the clause “Change in the rental price”, pointing out quite objective reasons for this situation. For example, if the exchange rate rises by 10% or more.

What documents are needed

The employer will need a passport, that is, an identity document. If the landlord knows how to correctly draw up a lease agreement for an apartment in Ukraine, he must provide:

• Documents proving ownership.
• Extract from the USR for property rights.
• Identity documents.
• Power of attorney for the right to conduct real estate transactions from the owner (when needed).

How to conclude an apartment rental agreement: important points that a tenant should ask about

• Ask the landlord why the previous tenants moved out, if any.
• Ask for receipts for payment of utility bills or ask if there is any arrears. It is also important to find out whether the rental price will include utility bills and how the calculation is made - according to the meters or the general standard.
• How many people are registered in the premises, because the more tenants, the higher the amount of utility bills.
• Many are familiar with how to conclude a lease agreement for an apartment with the owner, but what if the object has several owners? Such situations occur, here you need to obtain consent for the lease from everyone.
• If, while viewing the apartment, you find any technical flaws, insist on their elimination - by the owner or new tenants, but subject to a deduction from the rental amount. 

How to register an apartment rental agreement with the tax office

After the contract has been concluded, the notary reports the availability of a legal document to the tax office. The notary provides information about the identity of the landlord, who is subsequently notified. The owner is obliged to apply to the local tax authorities with documents proving the right to real estate and identity, and a signed rental agreement is also provided. 

If you want to know how an apartment rental agreement is concluded, but you cooperate with an intermediary, an official realtor, he can also notify the tax and collection service. Tenants also have the right to be notified.

How to renew an apartment lease

According to the law, if the term of the standard five-year contract of employment has expired and the cooperation of the parties remains valid, it is considered automatically extended for the same period, that is, for 5 years, with all the prescribed conditions preserved.

In the event that the term of the agreement is prescribed, it is considered extended for the same period by default. Also, the parties have the right to conclude a new agreement with new conditions.

For those who are interested in How is the apartment rental agreement drawn up? for a long term, it will be important to know that in the case of long-term residence, tenants have a priority right to purchase housing. This is true when the owner decides not to rent, but to sell his property.

How to terminate an apartment rental agreement

Termination of the contract is an important point that each party should be aware of. According to the law, the tenant or landlord must notify about this in advance, 3 months in advance. However, in some cases, the owner may demand a compulsory termination of the contract, including through the courts:

• The contract has lost its legal force, that is, the validity period has expired, and the tenant still lives on the premises. 
• The lessee has transferred the premises to another person without the consent of the lessor.
• The apartment suffered technical damage due to the negligent behavior of the tenant.

That is why you need to know how to fill out an apartment rental agreement, so that in the event of disputes, court situations, the document serves as the main legal evidence.

How to properly draw up a lease agreement for an apartment in Ukraine: conclusions

In the article, we talked about how an apartment rental agreement is drawn up, listing the main points. Whether he needs it or not, acting against the law or within its framework is a risk and a personal matter for everyone. If you own an apartment, carefully study the Civil Code of Ukraine (Chapter 59), and in case of difficulties, contact our lawyers. If you choose a suitable accommodation and do not know how to fill out an apartment rental agreement correctly, our specialists will explain all the points, choosing the best option. Subscribe to our updates real estate blog and get the latest publications from the real estate agency THE Capital.