Key and mandatory elements of Lease Agreement in Serbia

The essential and mandatory elements of a lease agreement for real estate are crucial for establishing clear legal relationships between the lessor and the lessee. In this blog, we will discuss the legal conditions related to real estate leasing.

Legal definition of a lease agreement

A lease agreement for real estate obligates the lessor (property owner) to transfer a specific property to the lessee for use, and the lessee is obliged to pay a certain rent for it.

Form of the lease agreement

Thus, it is a bilateral legal transaction as it creates obligations for both parties. The Law on Housing and Building Maintenance in Serbia prescribes that a lease agreement for real estate must be concluded in written form. Therefore, a written form is mandatory, but not notarization, as in the case of real estate sales agreements.

However, many landlords prefer to have the signatures on the lease agreement notarized. It should be noted that this involves the notarization of signatures on the lease agreement (i.e., the notary does not verify the content of the agreement but only confirms the identity of the signatories) and not the notarization (solemnization) of the agreement. In any case, a lease agreement does not need to be notarized to be valid.

Legal framework and essential elements of a Lease Agreement

The Law on Housing and Building Maintenance prescribes the mandatory elements of a lease agreement.

In addition to the said law, the Serbian Law on Obligations also contains regulations on leasing. The essential elements of a lease contract are the specification of the subject matter of the lease (the subject of the lease), the rent and the lease term.

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In addition to mandatory elements such as the lease term, amount, method and deadlines for rent payment, obligation to pay expenses, the lease agreement should also regulate issues such as the notice period, deposit, the possibility of subleasing the leased property, the lessee's right to make changes to the apartment, the lessor's right to access the leased property, and so on.

Obligations of the Lessor:

• Obligation to transfer the item
• Obligation to maintain the item
• Liability for material and legal defects

Obligations of the Lessee:

• Obligation to pay rent
• Obligation to use the item according to the agreement
• Obligation to return the item

Termination of the Lease Agreement

The lease terminates upon the expiration of the period for which it was concluded. If the lease was concluded for a specific period, and the parties continue to behave as lessor and lessee after that period, it is considered that a new lease agreement has been concluded for an indefinite period under the same conditions.

A lease with an unspecified duration terminates upon notification, which either party can give to the other at any time, except at an inappropriate time.

The lease agreement also terminates before the agreed term if the leased object is destroyed. The death of one of the parties does not affect the termination of the lease agreement; the lease agreement continues with the heirs until the agreed lease term expires. However, the parties may agree that the lease terminates in the event of the death of one of the parties.

Sublease

The lessee may sublease the leased item to another person (sublease) or transfer it for use on another basis, provided that this does not harm the lessor. The lease agreement may exclude the possibility of subleasing or allow subleasing only with the lessor's consent. If the leased item is subleased without the lessor's permission, the lessor may terminate the lease agreement. The sublease terminates in any case when the lease terminates.

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