About lease agreements
This is a collection of general information about lease agreements made by the International Mentor Team of the Budapest University of Technology and Economics. Please note that we don’t take responsibility for any lease agreement made based on these information.
Documents that might be useful to check 😉
The aim of a lease agreement (rental agreement) is to ensure the rights, duties and obligations of both the Lessor (owner) and the Lessee (tenant) in any case. So when you are about to sign a contract please think about your rights.
As you probably don’t speak Hungarian and many owners don’t speak English, the general solution for this problem is a bilingual agreement. In this case, the Lessor and the Lessee can both understand the agreement. We uploaded a general contract you can use. However, many Lessors have their own agreements and they usually insist on using them. In this case mentors can check your agreement and can give you advice whether to sign it or not, but the signature of an agreement is always your responsibility.
Now let’s check the most important points of an agreement based on the uploaded one.
Lessor and Lessee
The sample agreement is an agreement between one owner and one tenant. If you will not live alone in a flat, the agreement must include all of your flatmates according to their proper status. It can be your family for example. In this case, you are the Lessee alone, and the others are the members of your family. It is also possible to rent a flat with someone else (with a friend for example). In this case you are cotenants, and both of you must be indicated as tenants/lessees.
When you sign an agreement, it is normal that the Lessor checks the Lessee’s ID/passport and address card copy them. Lessees can do the same as well.
As rental issues are regulated by the Civil Code, only written and signed documents are considered in a legal action. So your agreements in word mean nothing and even e-mails and other unsigned messages related to your rental issues are not accepted as legal proofs. There is one special case: a valid electronic signature. It is a special document format and it is not equal to a scanned and copy-pasted signature. Printed signatures are not valid!
Other important thing when signing a contract is to check if the other party has the right to sign it or not. Basically the owner can sign the contract or an estate agent. But the agent must have an authorisation from the owner that s(he) can sign the contract, and you need to get an original version of it. It is also advised that all of the sheets of the contract will be signed by the Lessor and the Lessee on both sides.
To check the owner of the flat, you must ask a Property deed (in Hungarian: Tulajdoni lap), which is not older than 30 days. Now owners can ask it online as well. In this sample agreement it is marked as an appendix, however it is not so important to be marked in the agreement, but you must get one.
Documents for the Immigration Office
Property deed is also required by the Immigration Office, so you have to ask it anyway. The other required document is a signed Accommodation reporting form. I suggest you to take one with you when you go to sign a contract, so you don’t have to bother the owner twice.
Report of inventory
This is the second appendix of the sample agreement. We uploaded a sample Report of inventory as well (source: alberlet.hu). It doesn’t have to be an appendix, the agreement can also include these information. The sample inventory includes 2 kinds of information:
- Appointments (furnitures and everything you can find in the flat and belongs to the owner). This list mostly protects the owner, however some lazy owners just don’t care about it and they don’t insist on to define the appointments in the agreement. You don’t have to insist on it either, but it is suggested to take pictures about the flat when you move in.
- Meters. There are different meters (the equipments, which measures the consumption) in all of the flats. These are usually the electricity meter, the water meter and the gas meter (and/or the heating meter). It is really important to read the meters when you move in and write the values to the agreement or to an appendix, because this ensures that you will have to pay only for your consumption, not for one of the former tenant’s as well.
Rental fee and security deposit
The security deposit is usually equal to 2 months’ rental fee, however sometimes owners ask even 3 months’ rental fee as deposit (especially from foreign people). Lessee usually have to pay the deposit and the first month’s rental fee in cash simultaneously with the signature of the agreement. It is important, that the agreement must contain this transaction clearly. In some case owners prefer to make a different document about this transaction. It is not so common, but it is acceptable as well.
In the sample agreement Lessee pays the rental fee by money transfer. Some owners prefer cash. It is okey too, but it must be specified in the agreement, and you need to get proofs about your payment every time. It can be a receipt or a proof of receipt.
The agreement must specify Lessee’s other costs too. These overheads are the common costs and the utilities. There are several options here as well:
- Rental fee contains everything.
- Rental fee has 2 parts: rental fee and a general overheads fee. In this case Lessor and Lessee compare the overheads fee part with the exact amount of overheads (based on bills) from time to time and they pay the difference to each other.
- Rental fee is just a rental fee and the Lessor pays the bills. In this case Lessee sends the cost of bills with the rental fee.
- Lessee pays the bills.
Please note, that it is possible that you pay a lump sum after some of your consumption. It means that you pay the same amount of money every month based on your consumption of the previous year. From time to time the provider (gas company, water company…) compares your consumption with the amount you paid and you have to pay the difference to each other. After a cold winter it could mean that you have to pay tens of thousands HUFs extra gas fee.
The agreement must also contain how the Lessee will get the deposit back with the termination of the agreement.
An agreement is valid without witnesses too, however an agreement with 2 witnesses is much stronger. Witnesses are not responsible for the content of agreements, they just certifies that the parties (Lessor and Lessee) signed the contract in front of them.
When you terminate a lease agreement it is important to get a signed document about it too. It must contain that the owner checked the flat, one found it okey, the bills are paid and you got your security deposit back.
- We are renting a flat together. I decide to move out. Do the others have to pay my part of the rental fee too?
It depends on your agreement. The most common case is that the owner signs one contract with all of the tenants, in which you agree that tenants will pay the whole rental fee together. In this case yes, the whole rental fee of the flat must be paid every month in any case. However, if the Lessor has individual rental agreements with all of the Lessees, everyone has to pay according to his/her own contract regardless of any action.
- How can I terminate a fixed-term agreement earlier?
If you have a fixed-term agreement, but you would like to quit earlier, you can do by mutual consent or by an extraordinary notice. In a mutual consent Lessor and Lessee can agree anyhow, but Lessors are usually not so motivated in it. In case of an extraordinary notice, Lessee must give a signed copy of his/her notice to Lessor. After lessor got it, there is a period of notice, which is usually 30 days but it can be different according to the agreement. For this period Lessee must pay the rental fee. In addition, Lessor gets the security deposit as well.