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2 main reasons for conflict between landlords and tenants


2 main reasons for conflict between landlords and tenants

While the entire rental period between a landlord and a tenant may have passed without concern, in many cases, rental disputes arise with the termination of a rental agreement. Lia Siht, Head of Legal at Rendin, gives an overview of the main reasons for conflict between the parties and advises on how to prevent it from happening.

“Generally speaking, conflicts between tenants and landlords arise from being unaware of the necessary paperwork and leaving expectations unclear in communication," says Lia Siht from Rendin, a platform for concluding secure rental agreements. In practice, the most common issues at the moment are disagreements related to the termination of rental agreements and disputes on natural wear and tear.

Terminating a rental agreement

A properly prepared and legally correct rental agreement is a written document that sets forth the general agreements between the parties as well as their rights and obligations. "It has to be admitted that many people do not familiarise themselves with the content of their agreement properly. Especially when they've had no problems in their prior rental agreements," comments the Legal Manager.

Here lies one of the common reasons for conflict – the tenant's and landlord's different understanding of the termination of a rental agreement in conflict with legal acts.

"In reality, we see situations where tenants think that by notifying the landlord of the termination of the agreement, they can immediately move out and stop payments. Or situations where the landlord thinks that one month of prior notice is enough to terminate an agreement," says Lia Siht. In such cases, our customer service or legal department can advise on the correct action to take."

Rules for terminating a rental agreement

When a landlord or a tenant decides to complete a rental relationship, specific rules apply to the termination of the agreement (outlined in the Law of Obligations Act). Ordinary and unilateral termination of a termless contract is possible with three months of prior notice. Of course, it is possible to terminate the agreement sooner based on a mutual agreement between both parties.

"However, a fixed-term contract where the term has been agreed during the conclusion of the agreement is not subject to ordinary termination," specifies Siht.

The expert advises

  1. Keep your rental agreement as simple and concrete as possible. On the one hand, it takes less time to prepare. On the other hand, it is easier to understand the other party and is, therefore, less likely to cause problems with following the rules.

  2. Avoid the addition of excessive special conditions in the agreement. If you add them, ensure they are allowed by the Law of Obligations Act regulating rental contracts.

  3. It must be additionally remembered that if the parties should agree on a shorter notification term during the termination process of an agreement, then this clause only applies to the tenant as the weaker side. The landlord must follow the legal requirements.

Normal wear and tear in a rental home

This is a topic that causes a fair share of confusion with landlords as well as tenants. Also, the parties have a different understanding of who is responsible and how.

The Legal Manager of Rendin brings a typical example – the washing machine in a rental home breaks down. "The landlord thinks that it is the tenant's fault, but later investigation reveals that the device is over a decade old and its useful life simply ended."

Siht also explains that in the case of interior decoration, it's complicated to make general judgements because it all depends on how long the specific object has been in the hands of the tenant. "Signs of wear and tear that can be categorised as normal wear after a two- or three-year usage period are not characteristic to a three-month rental period."

"What most certainly cannot be considered normal wear and tear is the tenant's unauthorised activity in the apartment that has not been agreed with the landlord. This includes painting jobs and hanging wallpaper, pictures or mirrors on the walls," she adds.

What is normal wear and tear?

By nature, normal wear and tear is the amortisation of an object or environment, such as the interior of an apartment, devices or furniture. Siht says it is crucial to be aware that all things are unfortunately subject to normal wear and tear and that you cannot maintain the original condition of anything even with your best efforts.

"Landlords should understand that their rental objects need to be renovated from time to time, and the household devices or furniture need to be renewed. These are the expenses related to being a landlord alongside rental revenue," says the legal expert. For example, the Rental Committee has found in one of their decisions (11-1/82/16) that the amortisation of soft furniture is 10% per year.

The procedure of compensating for everyday wear and tear is a new topic in legislation, having entered into force in the Law of Obligations Act only in 2021. It enables the parties to agree that the tenant returns the apartment in such condition that the normal wear and tear or deterioration that occurred upon regular use has been eliminated or covers the reasonable and necessary expenses.

"The agreement must be made in writing upon the conclusion of a rental agreement – otherwise invalid. However, as this amendment is quite fresh, such agreements have rarely been concluded in practice," explains Siht.

The handover act helps

According to the Head of Legal at Rendin, the most straightforward and transparent means to avoid misunderstandings is handover act. "It is a legal document that records the condition of the rental space upon its transfer. Siht instructs that it is best to prepare it thoroughly and use up-to-date photographs.

She concludes that the parties to the agreement should express their expectations openly and present them in writing in the act as agreements.

Expert advice:

  1. To avoid later confusion, the rental agreement must clearly state the tenant's responsibilities.

  2. The most common practice supported by court and rental committee decisions is that the landlord must consider natural wear and tear already before the conclusion of the agreement and calculate the rental price accordingly.

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How to avoid conflict as a landlord?

There is no magic potion for avoiding rental disputes, but each landlord should have a good overview of the different facets of renting out real estate. As mentioned earlier in the article, some problems are caused by a low level of awareness. If the landlord is up-to-date with important issues, they will surely be more successful in the role.