Slovakia: How to get rid of a non-paying tenant?

06.07.2016
Almost every landlord has faced the problem of a tenant who failed to meet payment ob-ligations and refused to hand over the rented premises despite the fact that the lease contract was already effectively terminated. Irrespective of the underlying reason, non-payment is, in general, the most common type of breach of contractual obligations. While non-payment and failure to surrender the premises is the end result, the reasons for a tenants breach are myriad and require a variety of solutions.

As the current legal framework is not up to date with recent development in the field of commercial leasing of real property, landlords are primarily relying on prophylactic measures and focusing on proper drafting of their agreements.

In that regard it is recommended to include security instruments into the lease contract. The parties have a broad range of security instruments at disposal, which they can agree on, such as a guarantee, comfort letter or, ideally, a first demand bank guarantee. The most commonly used instrument - security deposit is not specifically stated in the Slovak Civil Code and therefore to include one in a commercial lease is important, and the inclu-sion of specific language, essential.

Also problematic for the commercial landlord is that the Slovak Civil Code permits tenants the right of reimbursement for improvements to the rented premises. In some instances a tenant may claim the failure to surrender the commercial premises due to the failure of the landlord to compensate the tenant for improvements the tenant made to the premis-es during the lease period. Therefore landlords should consider incorporation of a reim-bursement waiver clause.

Another prophylactic step is the customization of provisions regulating the termination of the lease contract. Consistent with settled case-law, the parties may agree on an immedi-ate termination of a commercial lease when the tenant is more than one month in arrears with the rental payments or other associated expenses. Landlords are advised to negotiate such an option, due to its impact on the acceleration of eventual proceedings.

An additional step would be the implementation of specific contractual provisions regu-lating the right of withdrawal from the contract. In this respect, the parties may agree that any delay in payment will be considered as a substantial breach of the contract, enti-tling the landlord to withdraw from the contract.

In order to avoid lengthy court proceedings a landlord should (a) incorporate a mandatory arbitration clause into the lease agreement or (b) conclude the agreement in form of an enforceable notarial deed, which entitles the landlord to recover the due amounts under the lease agreement (except contractual penalties) and to evict the tenant, without having to file a claim. However, it is important to note, that the enforceable content of the notarial deed must include the respective subtenant/subtenants in the case of any subletting or assignment, otherwise the enforcement may be jeopardized.

But what if the tenant, despite all prophylactic measures and an effective termina-tion/withdrawal from the contract, refuses to leave the rented premises? Depending on the situation and provisions of the respective commercial lease contract the landlord may (a) resort to the standard court track, (b) if necessary, order an urgent measure before proceedings are initiated (issued only under special circumstances), (c) initiate the eject-ment proceeding on the grounds of an enforceable notarial deed, or (d) bring a claim be-fore the arbitration court or other alternative resolution body.

For the means of preventing possible conflicts in the future, it is recommended to take all of the aforementioned recommendations into account when drafting/securing commer-cial lease agreements.