Here are 5 most common mistakes that are regularly encountered in practice:
1. Agreement on an excessively long lease term
15-20 years may seem "stable," but in reality, it is a loss of flexibility.
During this time:
– the market changes
– the rental value increases
– more favorable tenants appear
Optimally: include the possibility of reviewing the terms or choose a shorter term.
2. Automatic renewal of the agreement
This is one of the most dangerous conditions, as if you do not submit a refusal application, the agreement is automatically extended for the same term and under the same conditions.
Problem: most landlords do not even know that something needs to be submitted to the State Register of Rights to immovable property.
Result: you "extended" the contract without even realizing it.
3. Lack of rent indexation
A fixed amount looks attractive only today, but after a few years:
– inflation "eats up" income
– market rent is significantly higher
– your contract remains at old figures
It is important for the contract to have a clear indexation formula (inflation or normative monetary valuation).
4. Lack of the possibility of early termination of the contract
In practice, there are situations where the contract either does not contain clear grounds for termination, or they are formulated in such a way that it is almost impossible to implement them. As a result, even in case of systematic violations by the tenant, the owner is practically "tied" to the contract and forced to go to court.
5. Lack of restrictions on subleasing or actual use of the land by third parties
In practice, this leads to situations where the land is cultivated by a completely different person with whom the landlord has no contractual relationship. Control over the plot is lost, and influencing the actual tenant becomes much more difficult.
In conclusion, the main problem lies not in individual points, but in the overall approach. The land lease agreement is often perceived as a formality, although in reality, it is a key tool for managing your asset. It determines not only the income level but also the level of control over the land plot.
Therefore, before signing, it is worth evaluating not only the amount of rent but also the long-term consequences of each condition. Because most often mistakes become obvious only when they can be corrected only through complex and lengthy legal procedures.
