Rent or Buy?

Lease

The contractual relationship between the owner (or landlord) of an apartment and the tenant. The rights of tenants are protected by the Civil Code. The tenant signs an occupational lease (i.e. a lease contract) with the owner or the landlord. The tenant must pay for any necessary minor repairs in the apartment. A rented apartment may be owned by the municipality, or it may be owned privately. Tenants have fewer legal rights than owners/landlords, who may terminate the occupational lease (contract) if the tenant fails to pay the rent, or may also increase the rent. However, owners/landlords are not allowed to terminate the occupational lease without prior warning and without giving reasons. An occupational lease may be combined with a different type of contract (e.g. employment contract ). Tenants in apartments owned by their employer enjoy a lower level of protection than other tenants. In such a case, the termination of employment usually means that the occupational lease is terminated automatically as well.

 

Sublease

The contractual relationship between the tenant of an apartment and another person, known as the subtenant, in most cases the owner/landlord of the apartment, must also give their consent to the sublease. Sub-tenants do not enjoy the same level of legal protection as tenants, and the specific conditions of the agreement between the tenant and the sub-tenant are set out in the sublease. The tenant subleases either the entire apartment or part of the apartment to the sub-tenant. Sub-tenants have far fewer rights than tenants, a sublease can be terminated at any time without giving reasons, and if the tenant’s lease agreement is terminated, the sublease is terminated automatically as well. If a sublease is terminated, the owner/landlord is not legally obliged to find a substitute accommodation for the sub-tenant (this right only applies to tenants after the termination of their lease). If the tenant has a permanent residence in the apartment s/he may sublease part of the apartment without the consent of the owner/landlord.

 

Ownership

Owners of apartments may use their apartments for their own purposes, or they may lease them to tenants. Ownership of a property is recorded in the Land Registry (“Katastr nemovitostí”). In a block containing five or more apartments of which at least three are owned by three different owners, the law requires the establishment of an owners’ association. If the owner of a block is a legal entity, the apartments are usually leased to tenants. If the owner is a housing cooperative (in Czech “bytové družstvo”), the tenants are the members of the cooperative. (Nowadays it is very rare for a housing cooperative to own all the apartments in the block, it is much more common than some of the apartments are owned by the cooperative, while the others are owned privately). However, the members of a housing cooperative, although technically they are tenants and not owners, are actually in a very similar legal position to owners, and they enjoy similar rights. For example, the statutes of a housing cooperative guarantee the right of the tenancy to its members. The members can also use their voting rights to influence the decisions taken by the cooperative as a whole. For these reasons, membership in a housing cooperative is almost like a form of ownership, housing cooperative members are in a much stronger position than normal tenants with an occupational lease. 

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