LAW OF OBLIGATION ACT, PART 3, CHAPTER 15, DIVISION 5

Division 5

Duration and Expiry of Lease Contract 

  • 309. Duration of lease contract

(1) A lease contract entered into for a specified term expires upon expiry of the term unless the contract is extraordinarily cancelled earlier. The lessee and the lessor may cancel a lease contract entered into for an unspecified term according to the provisions of this Chapter.

(2) Withdrawal from a lease contract is permitted only in the cases provided for in this Chapter.

(3) Any agreement according to which the lessor of a dwelling has the right to cancel a lease contract entered into for an unspecified term on bases other than those specified in this Act is void.

(4) If a residential lease contract is entered into with a resolutive condition, the lease contract is deemed to have been entered into for an unspecified term after fulfilment of the condition. Upon fulfilment of the condition, the lessor may cancel the contract by adhering to the terms provided for in § 312 of this Act.

  • 310. Extension of lease contract entered into for specified term

(1) If, after expiry of the term of a lease contract, the lessee continues to use the thing, the lease contract is deemed to have become a lease contract entered into for an unspecified term unless the lessor or lessee expresses some other intention to the other party within two weeks. The term for the expression of such intention shall commence for the lessee as of expiry of the lease contract and for the lessor as of the time when the lessor learns that the lessee is continuing to use the thing.

(2) If, in the case of a residential lease contract entered into for a term of at least two years, neither party gives notification at least two months before expiry of the term that the party does not wish to extend the contract, the lease contract becomes a lease contract entered into for an unspecified term after expiry of the term.

  • 311. Ordinary cancellation of lease contract entered into for unspecified term

(1) Parties may cancel a lease contract entered into for an unspecified term by adhering to the terms provided for in § 312 of this Act. If the parties have agreed on a longer term for cancellation, they shall adhere to that term.

(2) If, upon cancellation, a party does not adhere to the term prescribed for cancellation, the contract is deemed to have been cancelled after expiry of the prescribed term.

  • 312. Terms for ordinary cancellation of lease contract for unspecified term

(1) Upon the lease of immovables, dwellings or business premises, ships entered in the ship register or aircraft entered in the Estonian aircraft register, either party may cancel a lease contract entered into for an unspecified term by giving at least three months’ notice.

(2) Upon the lease of furnished rooms or separately leased parking places, places in garages and the like, a lease contract entered into for an unspecified term may be cancelled by giving at least one month’s notice.

(3) Upon the lease of movables not specified in subsection (1) of this section, either party may cancel a lease contract entered into for an unspecified term by giving at least three days’ notice.

  • 313. Extraordinary cancellation of lease contract

(1) Either party may, with good reason, cancel a contract entered into for an unspecified term and a contract entered into for a specified term. A reason is good if, upon the occurrence thereof, a party who wishes to cancel cannot be presumed to continue performing the contract taking into account all the circumstances and considering the interests of both parties.

(2) Extraordinary cancellation is permitted mainly under the circumstances specified in §§ 314 to 319 of this Act.

(3) Advance notice of extraordinary cancellation is not required unless otherwise provided by law.

  • 314. Extraordinary cancellation of lease contract if lessee cannot use leased thing

(1) If a lessee cannot use a leased thing for a reason dependent on the lessor, the lessee may cancel the lease contract if the lessee has already granted the lessor a reasonable term to enable the thing to be used and the lessor has not enabled the lessee to use the thing within that term. The lessee need not grant a term for cancellation of the contract to the lessor beforehand if the lessee is no longer interested in performance of the contract due to the circumstances which cause the cancellation.

(2) If the possibility for a lessee to use a thing is restricted only to an insignificant extent, the lessee may cancel the contract for that reason only if there is a particular reason for cancellation of the contract.

  • 315. Extraordinary cancellation of lease contract upon non-stipulated use of thing

(1) A lessor may cancel a lease contract if:

1) the lessee or sublessee of the thing violates the obligations provided for in subsections 276 (2) or (3) of this Act regardless of any prior warning given by the lessor;

2) the lessee or sublessee of the thing violates the obligations specified in subsections 276 (2) or (3) of this Act materially or intentionally;

3) the lessee grants the use of the thing to a third party without authorisation therefor and if, as a result, the lessor or neighbours are so affected that the lessor cannot be expected to continue the lease contract.

(2) The lessor of dwellings or business premises may cancel a lease contract in the cases specified in subsection (1) of this section by giving at least 30 days’ notice. If the lessee or sublessee damages the dwellings or business premises intentionally, the term for cancellation need not be adhered to.

  • 316. Extraordinary cancellation of lease contract due to delay in payment

(1) A lessor may cancel a lease contract if:

1) the lessee is in delay for rent subject to payment, accessory expenses or a significant share thereof on three consecutive due dates;

2) the amount of rent due exceeds the amount of rent subject to payment for three months;

3) the amount of the accessory expenses due exceeds the amount of accessory expenses subject to payment for three months.

(2) A lessor does not have the right of cancellation specified in subsection (1) of this section if the lessee performs the obligations thereof before cancellation. Cancellation is void if the lessee had the right to set off the lease claim and the lessee submits an application for set-off promptly after receipt of a declaration of cancellation.

  • 317. Extraordinary cancellation of lease contract due to health hazard related to dwelling

Either party may cancel a residential lease contract if the dwelling is in such a condition that the use thereof may involve significant hazard to human health.

  • 318. Cancellation of long-term lease contract

(1) Either party may cancel a lease contract entered into for longer than 30 years after 30 years by adhering to the terms provided for in § 312 of this Act.

(2) The provisions of subsection (1) of this section do not apply if a lease contract is entered into for the life of the lessor or lessee.

  • 319. Extraordinary cancellation of lease contract due to bankruptcy of lessee

(1) If the lessee is declared bankrupt, the lessor may demand security for payment of the future rent and accessory expenses. The lessor shall grant a reasonable term for providing security. The notice for granting the term shall be in a format which can be reproduced in writing.

(2) If security is not given to a lessor within the term specified in subsection (1) of this section, the lessor may cancel the contract without adhering to the term for cancellation.

[RT I 2002, 53, 336 – entry into force 01.07.2002]

  • 320. Validity of lease contract upon death of party

A lease contract is not terminated upon the death of a party unless the parties have agreed otherwise.

  • 321. Taking place of lessee in lease contract upon death of lessee

(1) Upon the death of a lessee of a dwelling, the spouse who lived in the dwelling together with the lessee has the right to take the place of the lessee in the lease contract. If the lessee did not have a spouse who has the right or who wishes to take the place of the lessee in the lease contract, other family members who lived in the dwelling together with the lessee have the right to take the place of the lessee in the lease contract pursuant to an agreement between them.

(2) A spouse or other family member may take the place of the lessee in a lease contract within one month as of the death of a lessee by submitting a corresponding notice to the lessor.

(3) If several family members take the place of the lessee in a lease contract, they can exercise the rights arising from the contract only jointly and they shall be jointly and severally liable for performance of the obligations arising from the contract. A spouse or family member who takes the place of the lessee in a lease contract shall be jointly and severally liable with the successor of the lessee for obligations which have arisen from the contract before the death of the lessee. In the relations between the spouse or family member and the successor, the successor shall be solely liable.

(4) If the lessee has paid the rent in advance for a period of time extending beyond his or her death and if his or her spouse or a family member take the place of the lessee in the lease contract, the spouse or family member is required to return to the successor the amount which he or she obtained or saved as a result of the advance payment.

(5) If the spouse or a family member of the lessee does not take the place of the lessee in the lease contract, the rights and obligations arising from the lease contract transfer to the successor of the lessee. In such case, the lessor or the successor of the lessee may cancel the lease contract within three months as of the death of the lessee by giving at least three months’ notice.

(6) After the death of one lessee, a residential lease contract entered into jointly by lessees is valid with regard to the other lessee. The surviving lessee may cancel the lease contract within three months as of the death of the other lessee by giving at least three months’ notice.

(7) Agreements which derogate from the provisions of subsections (1) to (6) of this section are void.

  • 322. Extraordinary cancellation of lease contract of movable entered into for specified term

(1) A lessee of a movable may cancel a lease contract entered into for a specified term by giving 30 days’ notice if the movable is leased for purposes other than those related to the economic or professional activities of the lessee and the lessor has leased the movable as part of the economic or professional activities thereof. The lessor does not have the right to claim compensation for any damage caused by such cancellation.

(2) Agreements which derogate from the provisions of subsection (1) of this section to the detriment of the lessee are void.

  • 323. Cancellation of lease contract upon transfer of rights and obligations of lessor

(1) Upon the transfer of rights and obligations arising from a lease contract to a new lessor due to the transfer or encumbrance of a leased thing (§ 291 of this Act), the new lessor may cancel the lease contract within three months by adhering to the terms for cancellation provided for in § 312 of this Act unless the contract can be terminated earlier. The acquirer may cancel a residential lease contract or a lease contract of business premises for such reason only if the acquirer urgently needs the leased premises.

(2) If, in the case specified in subsection (1) of this section, the new lessor cancels a lease contract entered into for a specified term before expiry of the term of the contract, the previous owner shall be liable for any damage caused by termination of the contract to the lessee.

(3) The provisions of subsections (1) and (2) of this section also apply if the acquirer of a leased thing transfers the thing further.

  • 324. Notation in land register

(1) The lessee of an immovable may demand that a notation regarding the lease contract be made in the land register.

(2) A notation entered in the land register ensures that the actual owner of an immovable or a person for whose benefit the immovable is encumbered with a limited real right shall permit the lessee to use the immovable pursuant to the lease contract and that a new owner does not have the right to cancel the lease contract pursuant to the provisions of § 323 of this Act.

  • 325. Form of cancellation of residential lease contracts and lease contracts of business premises

(1) The lessor and the lessee may cancel a residential lease contract or a lease contract of business premises with a declaration of cancellation which is submitted in a format which can be reproduced in writing.

(2) A declaration of cancellation submitted by a lessor shall contain at least the following information:

1) the leased thing;

2) the date of termination of the contract;

3) the bases for cancellation;

4) in case of cancellation of a residential lease contract, the procedure and limitation period for contestation of the cancellation.

(3) In order to cancel a residential lease contract, the lessee requires the consent of his or her spouse who is living together with him or her in the leased dwelling and the consent shall be in a format which can be reproduced in writing.

(4) If the consent of the spouse specified in subsection (3) of this section cannot be obtained or if the spouse refuses to grant consent without good reason, the lessee may demand the consent of the spouse in court. In such case, a court judgment which satisfies the action shall replace consent.

(5) Cancellation which does not comply with the requirements provided for in subsections (1) to (4) of this section is void.

[RT I 2003, 78, 523 – entry into force 27.12.2003]

  • 326. Contestation of cancellation of residential lease contracts and extension of lease contracts

(1) A lessee of a dwelling may contest the cancellation of the lease contract by the lessor in a lease committee or court if the cancellation is contrary to the principle of good faith.

(2) Upon cancellation of a lease contract by the lessor or expiry of the term of a lease contract entered into for a specified term, the lessee of the dwelling may demand that the lessor extend the lease contract for up to three years if termination of the contract would result in serious consequences for the lessee or his or her family. If the lessor does not consent to the extension of the contract, the lessee may demand extension of the lease contract in a lease committee or court.

  • 327. Cancellation of residential lease contract contrary to principle of good faith

(1) The cancellation of a residential lease contract by the lessor is contrary to the principle of good faith if, above all, the lessor cancels the contract for one of the following reasons:

1) the lessee files a claim arising from the lease contract in good faith;

2) the lessor wishes to amend the lease contract to the detriment of the lessee and the lessee does not consent thereto;

3) the lessor wishes to induce the lessee to acquire the leased dwelling;

4) the marital status of the lessee changes, although this does not result in any significantly harmful consequences for the lessor.

(2) The cancellation of a residential lease contract by the lessor is contrary to the principle of good faith if the lessor cancels the contract during a period when proceedings are being conducted concerning the lease contract in a lease committee or court, or before three years have passed from the termination of proceedings concerning the lease contract in a lease committee or court if the decision or judgment was made to the detriment of the lessor.

(3) In the cases specified in subsection (2) of this section, the cancellation of a lease contract by the lessor is not contrary to the principle of good faith if the lessor cancels the contract with good reason, above all for one of the following reasons:

1) the lessee initiated the current proceedings in bad faith;

2) the lessor urgently needs the dwelling;

3) the lessee has arrears;

4) the lessee materially violates the obligations regarding prudence and the taking into account of the interests of others (subsections 276 (2) and (3) of this Act);

5) the lessee is declared bankrupt.

  • 328. Restrictions on extension of residential lease contract

(1) An application from the lessee of a dwelling for extension of the lease contract specified in subsection 326 (2) of this Act shall not be satisfied if extension of the lease contract is contrary to the legitimate interests of the lessor, above all for the following reasons:

1) the lessee owes rent or accessory expenses;

2) the lessee has materially violated an obligation specified in subsections 276 (2) or (3) of this Act;

3) the lessor cancels the lease contract on the basis specified in subsection 319 (2) of this Act;

4) taking into account future reconstruction work, the lease contract is entered into for a specified term until the commencement of the work or receipt of a building permit;

5) the lessor offers another equivalent dwelling to the lessee;

6) the lease contract may be cancelled without advance notice for any other reason.

(2) Upon deciding on the extension of a lease contract and considering the interests of the parties, the court and lease committee shall take, inter alia, the following into account:

1) the circumstances relating to entry into the lease contract and the content of the contract;

2) the duration of the lease contract;

3) the personal, family and economic relations of the parties;

4) the need of the lessor to use the dwelling;

5) the situation on the local residential market.

(3) If the lessee repeatedly demands extension of the lease contract, the fact of whether the lessee has done all that is reasonable in order to find new housing shall also be taken into account.

  • 329. Procedure for contestation of cancellation and for extension of contract

(1) In order to contest cancellation of a residential lease contract pursuant § 326 of this Act, the lessee shall submit an application to a lease committee or court within 30 days as of the receipt of the declaration of cancellation.

(2) In order to extend a residential lease contract entered into for an unspecified term which is cancelled by the lessor, the lessee shall submit an application to a lease committee or court within 30 days as of the receipt of the notice of cancellation.

(3) In order to extend a residential lease contract entered into for a specified term or a contract which has already been extended by a lease committee or court, the lessee shall submit an application not later than 60 days before expiry of the term of the contract.

(4) During proceedings in a lease committee or court, the lease contract is valid under the conditions applicable up to that time unless otherwise agreed by the parties.

(5) If a lease committee or court has declared the cancellation of a lease contract to be contrary to the principle of good faith, the lease contract is deemed not to have been cancelled.

[RT I 2003, 78, 523 – entry into force 27.12.2003]

  • 330. Amendment of terms and conditions of contract upon extension of residential lease contract

(1) Either party to a residential lease contract may, in a lease committee or court, request that the terms and conditions of the contract be amended together with the extension of the contract in accordance with the changed circumstances.

(2) If the terms and conditions of the contract are not amended, the contract is valid throughout the extended term under the former terms and conditions. This does not preclude any other possibilities arising from law to amend the contract.

  • 331. Cancellation upon extension of residential lease contract

If a lease committee or court extends a residential lease contract, the lessee may exercise the right of extraordinary cancellation by giving at least two months’ notice, unless the decision of the lease committee or the court judgment prescribes a different term for cancellation.

  • 332. Contestation of cancellation of sublease contract and extension of contract

(1) The provisions of §§ 326 to 331 of this Act also apply to sublease contracts unless the lease contract is terminated.

(2) A sublease contract shall not be extended for a period of time exceeding the duration of the lease contract.

  • 333. Application of provisions to residential lease contract of employer’s dwelling

The provisions of §§ 326 to 332 of this Act do not apply to a residential lease contract which is entered into between an employer or mandator as a lessor and an employee, mandatary or public servant as a lessee if:

1) the lessee has terminated the employment contract, authorisation agreement or service relationship without the employer or mandator having provided the lessee with a basis therefor arising from law;

2) the lessee has, by his or her behaviour, provided the employer or mandator with a basis arising from law for the termination of the employment contract, authorisation agreement or service relationship;

3) the lessor urgently needs the dwelling for another employee, mandatary or public servant.

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