Types of Lease

Agricultural lease

Agricultural lease means that land is leased for agricultural purposes. The lease period is often long and the lessee has protection of possession, which means the right to extend the lease under certain conditions.

Residential lease

In residential leases, the lessee rents land to build or use a home. Just as with agricultural leases, there is security of tenure that protects the lessee's right to remain, provided that the terms of the agreement are met.

Facility lease

Facility lease refers to the granting of land to build and operate facilities such as factories, warehouses or sports facilities. Here, the protection of possession is often weaker and can be agreed away.

Apartment lease

This lease is used when the land is leased for other purposes than agriculture or housing, for example for holiday homes, jetties or parking lots. Apartment leases lack tenure protection.

Important Components of a Lease Agreement

For a lease to be valid and legally binding, it must meet certain formal requirements and contain specific information:

• Names and contact details of the parties
• Type of lease
• The size and use of the leased area
• Lease fee and payment terms
• Lease period and notice period
• Any extension clauses and conditions for changes to the agreement

A written agreement is always recommended to avoid misunderstandings and to clearly define the rights and obligations of the parties. Oral agreements are only valid for apartment leases and agreements entered into before July 1, 1968.

Frequently Asked Questions about Lease Agreements

What is a lease fee?

The lease fee is the payment that the lessee pays to the landowner to use the land. It can consist of money, but sometimes also of goods or services. For agricultural leases, the fee must be monetary.

Can the lease fee be changed?

Yes, the lease fee and other conditions can be changed if both parties agree on this. However, changes to terms must be in writing and approved by both parties.

What happens when a lease is terminated?

A lease must be terminated in writing to expire. The notice period varies depending on the type of lease and the length of the agreement. If the agreement is not terminated, it continues to apply automatically for a new period.

What does security of tenure mean?

Protection of tenure means that the lessee has the right to extend the lease under certain conditions. This protection exists mainly for residential and agricultural leases, while facility leases have weaker protection and apartment leases have no tenure protection at all.

Advantages and Disadvantages of Lease

Benefits

• Lower initial investment compared to buying land.
• Less responsibility for maintenance and repairs.

Disadvantages

• No capital growth as the lessee does not own the land.
• Limited control and flexibility compared to owning land.

Recommendations for Writing Lease Agreements

It is strongly recommended to seek legal advice when drawing up a lease agreement. An experienced lawyer can ensure that the agreement meets all legal requirements and protects the interests of both parties. They can also assist with advice and support during negotiations and any disputes.

Summary

A lease is an important legal document that regulates the use of land between a lessee and a landowner. It is crucial to have a written agreement that clearly states all terms and that protects the rights of both parties. To avoid future disputes and misunderstandings, legal advice should always be sought when establishing and maintaining lease agreements.