As you know, the owner of the property can dispose of it at his discretion by any legal means. One of them is the rental of the property. It is drawn up by contract.
Extension of agreement
In the case of the proper fulfillment of obligations at the end of the period for which the agreement was concluded, the tenant, under other equal circumstances, has the preemptive right to extend (prolong, draw up a document for a new term) to other persons.
This rule is fixed in 1 part of Art. 621 of the Civil Code of the Russian Federation (Clause 1) . Normally, however, a reservation is present. The indicated right may be exercised by the lessee, unless otherwise provided by a lease agreement or law.
Additional duties and rights
Also in Art. 621 of the Civil Code of the Russian Federation (Clause 2), the tenant has an obligation to notify the owner in writing of his intention to extend the contract within the time period established by the agreement. If there is no corresponding clause in the document, then the notice must be sent within a reasonable time before the expiration of the contract.
The parties are entitled to change the terms of the transaction. This possibility is also enshrined in Part 1 of Art. 621 of the Civil Code of the Russian Federation.
Clause 2 of the norm also stipulates that if the owner refused to extend the contract to the tenant, however, within a year from the date of expiration of the agreement, he entered into an agreement with another person, the tenant may optionally demand transfer of duties and rights to the newly executed document and compensation for losses incurred in connection with the refusal, or only compensation for losses. To realize this possibility, the aggrieved entity sends a lawsuit to the court.
If the tenant continues to use the property after the expiration of the agreement, and there is no objection to this from the owner, the contract, according to part 2 of Art. 621 of the Civil Code of the Russian Federation, is recognized as renewed automatically on the same conditions. Moreover, its validity will be considered indefinite.
Art. 621 of the Civil Code of the Russian Federation with comments
As follows from the provisions of the first paragraph 1 of the rule, the pre-emptive right granted to the lessee is of a dispositive nature, since it can be eliminated by law or by the terms of the contract. This means that the legal opportunity enshrined in Article 621 of the Civil Code of the Russian Federation is limited, in comparison, for example, with the preemptive right to purchase a share.
The tenant's right to extend / conclude the contract extends to another person’s thing, which is the subject of an expired agreement, which the person intends to rent further. Accordingly, if an object ceases to exist virtually or legally (for example, in connection with the division of the site into two new ones, the abolition of retail outlets on the market in the established manner, etc.), the preemptive right enshrined in Article 621 of the Civil Code of the Russian Federation also ceases.
Mandatory conditions
For the occurrence of the right, secured by Art. 621 of the Civil Code , it is necessary that:
- The contract expired.
- The tenant performed the obligations of the transaction properly.
- The user agreed to the terms proposed by the owner to another person.
Nuances
Untimely repayment of debt on rent payments, violation by the user of other terms of the transaction indicate its dishonesty. Accordingly, the lessee in such cases is deprived of the pre-emptive right.
Materiality or non-materiality of violations committed by a person in judicial practice under Art. 621 of the Civil Code of the Russian Federation is not taken into account when deciding whether to declare it unfair.
Acceptance of Terms
The provisions of Art. 621 of the Civil Code of the Russian Federation applies to cases where the lessor accepts the conditions proposed by the owner to another entity, including the amount and procedure for paying amounts for the use of property, guarantees for the safety of the property leased. This is precisely what follows from the provisions on “other equal conditions”.
Accordingly, the conclusion of a lease for a new term when the user uses the provisions of the first part of Art. 621 of the Civil Code , in fact, will be the execution of a new contract. Consequently, the parties to the legal relationship will be considered unrelated to the conditions of the previous document.
Notice
Realization of law under Art. 621 of the Civil Code of the Russian Federation is possible subject to the requirements for notifying the owner of the desire to draw up a contract for a new term. The period in which a person must send a notice is provided in the agreement itself. If the parties have not agreed on it earlier, then the period should be reasonable.
It should be borne in mind that provision 2 of clause 314 of the Article of the Code on a reasonable period for repayment of an obligation is not applicable to the situation under consideration. This is due to the fact that the notice of the landlord cannot be considered a duty in the literal sense. He must notify the owner if he wishes to exercise the preemptive right. The notice, rather, can be called a condition for the realization of this opportunity.
The duration of a reasonable period, therefore, should be determined in each case separately. This takes into account the essence and conditions of the transaction, the nature of the relationship of the participants, the rules of business ethics.
If the parties have fixed in the agreement the procedure for sending notifications, then the tenant must follow it. If the relevant rules have not been agreed, it is advisable to send a notice in a valuable letter with a receipt of delivery and a description of the attachment.
Owner infringement
If the lessor refuses the user to conclude an agreement for a new term, but at the same time draws up a contract with another person, he will be recognized as a violator of the provisions of Art. 621 of the Civil Code of the Russian Federation . Normally, two options for user actions are fixed. It may require the transfer of the powers of the new tenant and compensation for losses or only compensation for losses.
The first option does not imply forcing the owner to conclude an agreement for a new term. This measure can be implemented in extreme cases, for example, if the lessor evades the execution of the main contract in accordance with the preliminary agreement.
Important point
The user's preferential right to enter into an agreement for a new period does not arise if the lessor only intends to transfer the property to a third party, but an agreement has not yet been concluded between them.
The transfer of powers is allowed only by an already executed agreement. Other methods of protecting the preemptive right violated by the owner are not provided for in clause 621 of article 1.
Imperative order
It is present in part 2 of the analyzed article. The condition of the lease agreement introducing a ban on its renewal (extension) upon expiration of the term in the absence of any objection from the owner when the tenant actually continues to use the property transferred to him, is recognized as null and void.
Accordingly, the presence / absence of claims on the part of the owner to continue operating the facility after the expiration of the agreement has legal significance in deciding on the non-renewal / renewal of legal relations on initial terms for an indefinite period.
The owner sending a notification to the user containing a refusal to prolong the contractual relationship on previously agreed terms, receiving this notification by the user, respectively, will mean the termination of the transaction.
Consequently, if the tenant notified the owner of the refusal to renew the agreement, but did not stop using the property, and the lessor, in turn, has no objection to this, the contract is recognized as being renewed for an indefinite period.
Conclusion
As practice shows, lease relations are quite common in the field of civil circulation. Transactions of this nature are governed by various legislation. Most of them are general. However, a number of norms regulate specific situations and establish special guarantees for the parties. 621 article of the Civil Code should also be referred to such norms.