What protection should you choose against a disloyal tenant?

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Renting a flat, warehouse or any other space can be a great source of passive and steady income. On the other hand, not every tenant is honest and reliable. It may happen that the tenant uses the rented premises in a manner inconsistent with the contract or the intended use of the property, caused damage as a result of improper use, or after the end of the tenancy, the tenant does not agree to the return of the subject of the lease. The question here arises whether it is possible and what kind of protection against a disloyal tenant can be applied? We will try to answer these questions below.

Checking the future tenant

A desirable, but rather complicated way to avoid disappointment with a dishonest tenant is to gather information about him before concluding a lease. In the case of tenants who are natural persons, checking their credibility and solvency can be difficult. However, you can try to check the history of such a person in the Credit Information Bureau, which will indicate whether the future tenant does not appear in the debtors' register. This is the first security measure against a disloyal tenant.

At the same time, if the lease is related to the business activity conducted by the tenant, it is worth reviewing the entry of such a person into the National Court Register or the Central Register and Information on Economic Activity - depending on whether the tenant is a company or a natural person. Often, from the entries in the aforementioned registers, one can read information about the bailiff's execution against the entrepreneur or the bankruptcy proceedings being conducted.

Preparation of a written contract and careful consideration of its provisions

Not surprisingly, but extremely important, protection against a disloyal tenant should be the observation that the lease contract should be written and its most important provisions carefully thought out. The Civil Code defines general rules related to the performance of a lease agreement (Art. 659-692 of the Civil Code), but not always applying its provisions directly turns out to be beneficial for the parties. Sometimes it will be in their interest to regulate certain issues separately from its regulation.

For example, the Civil Code specifies in Art. 662 § 2, that minor outlays connected with the ordinary use of things are charged to the tenant.The regulations do not, however, specify what should be understood by the term "minor expenditure", which gives rise to interpretation disputes. In order to prevent negative consequences, which are not specified and assessed, the landlord may demand that such matters be clarified in the contract.

In the lease agreement, it is worth specifying the landlord's right to terminate the lease agreement if certain conditions are met. For example, in accordance with Art. 672 of the Civil Code. If the tenant is in default with the payment of rent for at least two full payment periods, the landlord may terminate the tenancy without observing the notice periods. This term in the contract can be freely changed, so, for example, limited to one month.

At the same time, it should be noted that the termination of a contract concluded for a specified period may only take place in the cases specified in the contract. In order for the landlord to be able to terminate the lease in the event of the tenant performing the lease in a manner inconsistent with the contract or for other reasons, the parties must regulate the right to terminate the lease for the period specified in the contract. In order to be effective, the grounds for terminating such a lease must be regulated precisely and not in a general manner.

When formulating the provisions of the lease, it may also be beneficial to include a provision in it, according to which the sublet by the lessee requires the consent of the landlord. It is true that, according to the Civil Code, such consent is not required in every case, but the inclusion of this type of clause in the contract will remove any doubts in this respect and will allow the landlord to have greater control over the fate of the subject of the lease during the term of the lease.

Renting a flat and securing against a disloyal tenant

If the purpose of the tenancy agreement is to meet the tenant's housing needs, it becomes much more difficult to defend and protect against a disloyal tenant. This is due to the fact that the Polish law of June 21, 2001 on the protection of tenants' rights, municipal housing resources and the amendment to the Civil Code, which in an absolutely binding manner shapes the rights and obligations of the owner and tenant of a dwelling and introduces far-reaching restrictions. , in particular as regards the termination of a rental agreement for a dwelling or pursuing a delay in the premises.

Without going into details, it should be emphasized that it may be in the interest of the landlord to conclude an occasional lease agreement, which allows the tenant to be evicted without prior court order. Occasional lease agreements may be concluded only if the owner of the apartment is a natural person who does not conduct business in the field of renting premises. At the same time, the contract itself may be concluded for a definite period of time, not longer than 10 years. At this point, it should only be noted that the rules of occasional rental are regulated in Art. 19a above the act on the protection of the rights of tenants.

Guaranteeing the right to inspect the subject of the lease

If the landlord wants to be protected against a disloyal tenant and to ensure maximum certainty that the subject of the lease will remain unchanged and that the tenant will perform the necessary repairs and maintenance, the landlord's right to inspect by the landlord may be specified in the contract. This right may, for example, consist of monthly visits to the premises, warehouse or other space.

On the other hand, it should be remembered that such a provision may effectively discourage the tenant from signing a contract, although in the case of quite unique and sensitive lease objects, this type of provision may be enforceable and beneficial.

Deposit

A necessary element of the lease agreement may also be securing the landlord's possible claims both for the payment of the rent and for any damage caused by the tenant in the subject of the lease. Security against a disloyal tenant usually takes the form of a deposit, i.e. a sum of money specified in the lease agreement, charged by the lessor at the time of signing the contract or issuing the subject of the lease.

If, at the end of the tenancy, it becomes apparent that the rented item has lost its value as a result of misuse by the tenant, the deposit will allow the landlord to deduct a certain amount of money to restore the subject of the tenancy to its original condition, while avoiding a tedious and costly lawsuit.

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Bill of exchange

Another security against a disloyal tenant, in the case of renting commercial premises (warehouses or space in shopping centers), the deposit required against possible claims of the landlord may be an excessive amount. Meanwhile, the tenant will be reluctant to "freeze" this amount of money until the end of the lease. The amount that he would have to spend on the deposit could be invested in current business activities. A legal instrument in the form of a promissory note may prove to be an antidote to this type of deposit defects, which will work as a way to secure the lease agreement.

A promissory note is a security of a specific form in which one of the parties undertakes unconditionally to pay a specified sum of money in the event of a request to do so by the holder of the promissory note. At the same time, the demand for payment of the promissory note sum does not require any conditions to be met and is treated as a security against a disloyal tenant.
Importantly, issuing a promissory note is basically completely cost-free. It is enough for the tenant to sign a commitment to pay a certain amount of money to the landlord within a specified period, when the landlord requests it. For the landlord, having a promissory note issued by the tenant means that in the event of any arrears with any fees, the landlord will be entitled to bring an action to court for payment of the amount specified in the promissory note in a significantly simplified procedure - prescriptive proceedings. Such a judgment may be immediately enforceable, which will significantly speed up the enforcement of claims, and also relieve the landlord from the difficult burden of proof of showing exactly what contractual breaches the tenant has committed and what amount he owes the landlord.
Notwithstanding the foregoing, a promissory note is an excellent instrument for putting pressure on a dishonest contractor who is aware that the promissory note may be cashed in at any time.

Notarial deed - voluntary submission to enforcement

In order to protect against a disloyal tenant, the lease agreement may also contain provisions specifying the tenant's obligation to provide a declaration in the form of a notarial deed on voluntary submission to enforcement pursuant to Art. 777 of the Code of Civil Procedure. In this case, emptying the premises takes place without the need to bring an action to the court.

Lien right

Security against a disloyal tenant entitles the landlord to a lien on movables brought into the subject of the lease. Pursuant to Art. 670 § 1 of the Civil Code: In order to secure the rent and additional benefits with which the tenant is in arrears for no more than a year, the landlord has a statutory lien on the tenant's movables brought into the subject of the lease, unless these items are not subject to seizure. The lien right expires at the moment of removing the pledged items from the subject of the lease. For example, a landlord of a warehouse space has the right to occupy the goods there until the tenant pays the outstanding rent, which will allow him to recover his debts without the involvement of the court.