Conclusion and Terms of the Agreement

A land lease agreement must be made in writing and signed by all parties. If the formal requirements have not been complied with, the contract is deemed not to exist. An exception to this applies, under certain conditions, with respect to leases of agricultural and other land. The lease agreement must contain all terms of the lease. Any term not included in the agreement is deemed to be void.

When drafting the land lease agreement, the estate that is the object of the lease must be specified. If only a certain portion of an estate is the object of the lease, it is advisable to specify such portion in a map to be attached to the agreement.

The term of the lease must also be specified in the agreement. The parties may agree, that the agreement shall either by valid for a fixed term or until further notice. The maximum and minimum terms vary, depending on the type of lease. If the parties have agreed upon a term of the lease that is longer in term than permitted by law, the lease will terminate upon expiry of the permitted maximum term by law.

The parties are free to agree on the payment of rent. In the absence of such provision, the rent is payable annually three months prior to the end of the lease year, at the latest. Where the lease has been concluded for less than one year, the rent is payable at the end of the lease term. It is also possible to agree in the lease agreement that during the lease term, the rent will increase or decrease in accordance with an agreed mechanism.

It is also possible to agree upon payment of a contractual penalty in the event of a party’s failure to comply with contractual obligations arising from the lease agreement.

It is prohibited to grant occupancy of the leased land to a third party, unless otherwise agreed in the lease agreement. The right to transfer the tenancy depends on the type of the lease. As a rule, the landlord’s consent is not required for transfer of the tenancy.