On October 31, the Contract Committee issued a notification declaring that the business of leasing residential properties is a Controlled Business.

Background

The first notification was published on February 16, 2018. It:

significantly restricted the rights of business operators (landlords),
and granted greater protection to tenants entering into lease agreements with such operators.

The new notification introduces more flexible lease conditions for business operators.

Scope of Application

These rules apply only when the landlord is a business operator, meaning:

they manage 5 or more rental properties,
rented out to different tenants (rooms, houses, condominium units, etc.),
excluding hostels and hotels.

Legal Requirements for Lease Agreements

The notifications establish:

mandatory terms that must be included in every lease agreement, and
prohibited clauses that cannot be included.

If:

mandatory terms are missing, or
the contract includes clauses that worsen the tenant’s position, or
prohibited provisions are included

→ such terms will not have legal effect.

Effective Date

The new notification comes into force on January 30, 2020
From that date, the previous (2018) notification no longer applies
The new rules do not apply retroactively
Contracts signed before January 30, 2020 must comply with the 2018 rules

Key Changes

1. Termination of Lease by the Tenant

Rules from May 1, 2018:

The tenant may terminate the lease by giving 30 days’ notice to the operator.

Rules from January 30, 2020:

The tenant may terminate the lease only:
- after occupying the property for at least half of the lease term, and
- provided rent and all related expenses have been paid in full and on time
Notice must be given no later than 30 days in advance

2. Termination of Lease by the Landlord

Rules from 2018:

If the tenant breaches the contract:
- the operator must send a written notice demanding correction of the violation
- or termination of the lease after 30 days if the violation is not remedied

Rules from 2020:

If the tenant breaches the contract:
- the operator may terminate the lease by giving at least 30 days’ written notice
If the tenant’s actions disturb the peaceful living of others:
- the operator may terminate the lease with at least 7 days’ written notice
If the tenant violates laws related to public order or morality:
- the operator may terminate the lease immediately

3. Issuance of Rental Payment Invoices

2018: Not less than 7 days before payment due date
2020: Not less than 3 days before payment due date

4. Prohibited Clauses in Lease Agreements

Liability Limitation

Any clause excluding or limiting the operator’s liability for a material breach of contract without reasonable cause is prohibited.

Advance Rent and Security Deposit

2018:
- advance rent cannot exceed 1 month
- deposit cannot exceed 1 month’s rent
2020:
- advance rent and deposit are allowed
- but their total combined amount must not exceed 3 months’ rent

Confiscation of Deposit

It is prohibited to include a clause allowing the operator to:
- confiscate the deposit or advance rent for reasons not caused by the tenant

Access to the Property

2018:
- no access without prior notice to the tenant
2020:
- access without prior notice is allowed only in emergency situations
- where there is a risk of damage to the operator or other tenants

Blocking Access / Seizing Property

2018:
- the operator could block tenant access, enter the property, and seize the tenant’s belongings
- if the tenant failed to pay rent or related expenses
2020:
- such actions are allowed only after the operator has lawfully exercised the right to terminate the lease

Summary

The new regulation:

provides a more balanced framework between landlords and tenants
gives greater flexibility to business operators
while maintaining key tenant protections:
- limits on deposits and advance payments
- protection from unfair contract terms
- safeguards against unlawful eviction and property seizure