real estate | In Principle

The question of payment of the cost of alterations made to leased premises by a tenant is an important issue in the relationship between the tenant and the landlord. There are many factors affecting arrangements as to the cost of alterations, such as the duration of the lease, the premises leased, and the envisaged outlays on the part of the tenant.

The Supreme Administrative Court recently reviewed a case concerning unauthorised change of use of real estate. According to the construction permit it was supposed to be a residential part of a building, but was converted into rooms to be let.

Property development projects are on the rise, accompanied by rising costs of building materials. Can contractors with old contracts which do not reflect inflation validly demand a higher fixed fee?

Real estate has to be consolidated and covered by a single land and mortgage register for example when someone wishes to create separate units in a building standing on two plots listed in separate land and mortgage registers. Before commencing a development project it is also advisable to commission a legal analysis to determine whether the legal criteria for this measure are fulfilled; otherwise this could prove difficult or impossible.

The rent, terms of payment and rent abatement period are all important factors for parties entering into commercial leases. Given the ongoing growth of the real estate market, the negotiated rent may fall well below market value within a couple of years. This is why long fixed-term lease agreements (which can be terminated only in situations specified in the lease agreement or when provided by law) should ensure that the rent amount remains acceptable to both parties for the duration of the lease. An indexation clause is one way to do this.

Local governments and authorities representing the State Treasury accuse developers of planning projects or making other changes in the current manner of use of real estate inconsistent with the purpose for which perpetual usufruct was established. Then they offer the perpetual usufructuary an agreement changing the use of the property in exchange for compensation. Is there any justification for such actions?

People applying for the division of real estate are often requested to supplement the application with a permit for location of a driveway, in order to prove the existence of direct access to a public road. But is the authority’s request legally justified?

Do circumstances such as placing an advertisement for sale of real estate on an auction site or increasing the value of the land by partitioning it into smaller plots, adding utility connections, or establishing easements always indicate that the seller acts as a business and the transaction is subject to VAT, not the tax on civil-law transactions?

Elimination of joint ownership is not always tax-neutral. This should be taken into consideration when deciding how to conduct the transaction.

An interesting ruling was issued in a case we were handling. After the independent possessor of real estate turned the property over to the owner, it demanded payment for the expenditures it had made on the property, including construction of a building on the site. But does construction always raise the value of the property?

A simplified procedure for notification of subcontractors, clarification of the rule on the investor’s objection to entrusting part of the work to a subcontractor, and limitation in the amount of the investor’s joint and several liability—all these changes are to go into effect on 1 June 2017.

The broad limitations on trading in agricultural land introduced by amendment of the Agricultural System Act require extreme caution in any transaction potentially involving this type of property, as the definition of agricultural land assumes huge importance.