The grounds for terminating leases of non-residential premises are set out by law, but parties are also free to add further conditions by agreement.
The relevant law is Act No. 116/1990 Coll. on the Lease and Sublease of Non-residential Premises (as amended) (the 'Act').
Leases for an indefinite terms can be terminated on notice given by either landlord or tenant for any (or no) reason, unless the parties have agreed that one or more particular reasons are required.
Leases for a definite term may only be terminated:
- on expiry of the term
- by notice given by the landlord on any of the grounds in para 9(2) of the Act (inter alia use of the leased premises by the tenant in violation of contract, default in payment of the rent or service charge of more than one month, serious disturbance of peace and good order by the tenant despite a written notification, sublease of the leased premises without the landlord's prior approval)
- by notice given by the tenant on any of the grounds in para 9(3) of the Act (loss of qualification which entitled the tenant to carry out the activity for which the non-residential premises were leased, the leased premises become unfit for the agreed purpose through no fault of the tenant, the landlord grossly breaches his duty to keep the leased premises in a good condition)
- under para 14 of the Act (the destruction of the tenancy object, the death of the tenant, if the successors do not continue the tenancy, the dissolution of a corporate entity as a tenant)
- for a reason set out in the lease
- by mutual agreement
- any of the general termination methods permitted by the Slovak Civil Code
The notice period for termination by landlord or tenant under para 9 must be 3 months, unless the parties agree a different period.
This notice period is specified to run from the first day of the month following the month in which the notice was delivered to the other party. Where the parties have agreed a different notice period (for example, a right to give 'immediate' notice), there is uncertainty whether that notice also only starts to run on the first day of the following month. The general consensus appears to be that it does not.
There is also debate whether 'immediate'
notice amounts to a withdrawal rather than termination on notice,
but it is an effective means of ending a lease either way.
There is also uncertainty about the extent of the parties freedom to depart from the specified statutory grounds for termination under the Act.
The general view is that the statutory grounds are mandatory and cannot be excluded by agreement.
Some also hold the view that it is not possible to extend the statutory procedure for termination by notice to include additional grounds. Even if this is true, it is commonly accepted that the parties are free to agree to allow each other to withdraw from the lease, and to specify particular grounds on which this may be done.
Reinstating destroyed or damaged premises
Landlords often want the lease to include an agreement by the tenant not to end the lease where the premises have been destroyed or damaged. This has two parts:
- first, the lease must include a term by which the tenant agrees not to invoke his right under para 14 of the Act to treat the lease as ceasing to exist where the premises have been destroyed or damaged (eg by fire, water, explosion or natural disaster), which it is generally agreed that the parties are free to do
- second, the lease has to override para 9(3)(b) of the Act,
which allows the tenant to terminate the lease on notice on the
grounds that the premises have become unfit for purpose through no
fault of the tenant. Leases commonly include a provision in which
the tenant agrees not to exercise this right even though it is
questionable whether such a provision is valid
Law: Act No. 116/1990 Coll. on the Lease and Sublease of Non-residential Premises as amended
This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq
Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.
The original publication date for this article was 07/03/2012.