Why the real-estate lease contract matters

It’s not uncommon for apartment owners to rent out their apartments without forming a real-estate lease contract with the tennant. It is our belief that this is a major mistake on the landlord’s part and it may end up costing them a great deal.

Before anything else, the Law on residence and building maintenance states that a lease contract must be signed in written form. Therefore, it’s necessary to have it on paper, but not required to have it notarized by a public notary like it is for real-estate sales contracts, for example. However, many landlords opt to have the signatures on the lease contract notarized anyway. It should be stated that in those cases the only the signatures on the contract are notarized (meaning the notary doesn’t proof-check the content of the contract itself, but only the identity of the signing parties), rather than a public notary solemnization of the contract. This is why the public notarization fees are significantly lower (360,00rsd per signature). Signature verification ensures that there can be no contestation that a contracting party has signed said contract, without going into its contents.

It is our opinion that, in addition to the written form being requested by law, apartment owners should always sign lease contracts in order to protect their rights and interests. The law on residence and building maintenance regulates which elements are mandatory when it comes to lease contracts. In addition to this law, the Law on contractual relationships also contains stipulations regulating lease.

In addition to mandatory elements such as lease duration, cost, manner and times of payments, the expenses, terms of notice, the right of the landlord to break off the contract without a grace period in case the rent hasn’t been paid, the deposit wasn’t provided and there is no option for sub-leasing the leased object, the rights of the landlord to make adjustments, the right of the landlord to access the leased property and so on.

In case that there is any kind of dispute between the landlord and the tennant, the lease contract with clearly negotiated rights and dues of the tennant will make it much easier to resolve the dispute. Meanwhile, an oral agreement is much more difficult to prove. The court processes which determine the true intent of the contract parties usually take a very long time. In many cases it boils down to one party’s word against the other, which is highly unreliable as proof in court.

Because of everything stated, we believe that forming a lease contract in written form is a far superior and safer option than just an oral agreement.

City Expert is there to make the entire real-estate lease process much easier and simpler for you.