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Legal aspects of concluding lease contracts for a building or other capital structure

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Ланткевич Кирило
Lawyer
Ukraine / Dnepropetrovsk region

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Publication date: 10.04.2024

I am studying in the third year of the State University of Economics and Technology.I specialize in contractual, economic and corporate law, in particular, I provide consultations and write articles.

A building lease is a legal agreement between two parties - the lessor (the owner of the building) and the lessee (the person who rents the building), in which the lessor transfers to the lessee the right to use the building for a certain period of time for a certain fee. The contract for renting a building or other capital structure in Ukraine is regulated by the Civil Code of Ukraine and other legislative acts. Here are the main aspects of this type of contract:

Subject of the contract: A contract for the lease of a building or capital structure provides for the transfer of the right to use this real estate for a certain period of time in exchange for a payment, which is usually called rent. The intended purpose of the subject of the contract, that is, the building that is leased, must not be residential, because another contract is concluded for the lease of residential premises.

Terms of the contract: The terms of the contract usually include the duration of the lease, the amount of the rent, the order of its payment, the rights and obligations of the parties, as well as the procedure for changing the terms of the contract.

Rights and responsibilities of the lessee (lessee): The lessee (lessee) has the right to use the leased object in accordance with the terms of the contract, and is also obliged to pay the rent and keep the property in good condition.

Rights and obligations of the lessor (lessor): The lessor (lessor) is obliged to hand over the leased object to the lessee in the appropriate condition and ensure his right of use. He may also require payment of rent and insurance of the rental object.

Changes to the terms of the contract: Changes to the terms of the contract can be made only with the consent of both parties, unless otherwise provided by law or the contract itself.

Term of the contract: The lease contract has a fixed term during which the tenant has the right to use the leased object.

Fee for use: The tenant is obliged to pay rent to the lessor for the right to use the building or structure. The payment condition may provide for the tenant to pay a fee for the use of the building itself, as well as for the use of the land plot on which such a building is located.

Prohibition of sublease: The lease agreement usually contains a prohibition of sublease, that is, transferring the right to use the leased object to a third party without the prior permission of the lessor. Along with this, the parties can agree to a condition in the contract under which the tenant is allowed to sublease the leased object with the prior consent of the landlord.

Legal consequences of breach of contract terms: Violation of contract terms may lead to various legal consequences, such as a demand for termination of the contract, recovery of damages or other sanctions defined by law. These aspects are regulated by the general principles of the civil legislation of Ukraine.

The procedure for drafting contracts a lease agreement for a building or other capital structure:

The conclusion of a building rental agreement includes several stages to ensure legal compliance and protection of the interests of both parties. Here is the general procedure for concluding such a contract:

Search for a rental object: The lessee (lessee) is looking for a suitable building for rent. This may include reviewing various offers from potential landlords.

Negotiation of terms: The tenant and the landlord negotiate the terms of the lease, such as the length of the lease, the amount of rent, maintenance and repair obligations, terms of extension and termination of the lease, and other important aspects.

Drawing up a contract: After agreeing on the terms, the parties draw up a building lease contract. The contract must contain all the important terms that were agreed as a result of the negotiations.

Signing the contract: Both parties sign the building lease agreement. This confirms their agreement with the terms of the contract and becomes binding on both parties.

Payment of rent and security deposit (if necessary): The tenant usually pays the first month or several months of rent in advance, and a security deposit (deposit) may be provided as a guarantee of compliance with the terms of the contract.

Transfer of the leased object: The lessor transfers the keys and access to the building to the lessee. Usually, at this stage, the parties confirm the fact of the transfer of the object with an appropriate act of acceptance and transfer. The tenant can start using the facility in accordance with the terms of the contract.

This is the general procedure for concluding a building lease agreement. It is important to note that each agreement may have its own characteristics depending on the specific conditions and requirements of the parties.

Development of a contract by a lawyer: 

The development of contracts at all stages requires legal assistance, because it is necessary to comprehensively verify the identity of the counterparty in order to ensure reliable cooperation in the future. Usually, such an agreement is concluded with business entities, and therefore the lawyer will take into account all the peculiarities of doing business, the requirements of the law and will develop such a draft agreement that would fully meet them. Therefore, the development of documents by a lawyer is a reliable tool for building successful contractual legal relations.

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