LAW OF OBLIGATION ACT, PART 3, CHAPTER 16, DIVISION 3

Division 3

Duration and Expiry of Commercial Lease Contract

  • 352. Extension of agricultural lease contract

If, in the case of an agricultural lease contract entered into for at least three years, neither party gives notification at least two months before the expiry of the contract that the party does not wish to extend the contract, the contract is presumed to have become an agricultural lease contract entered into for an unspecified term after expiry of the term. Agreements which derogate from this to the detriment of the commercial lessee are void.

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

(1) The parties may cancel a commercial lease contract entered into for an unspecified term by giving at least six months’ notice.

(2) The parties may cancel an agricultural lease contract entered into for an unspecified term by giving at least one year’s notice. The contract may be cancelled only such that it expires on 1 April or 1 October.

(3) Either party may at any time cancel an animal lease contract entered into for an unspecified term and not linked to an agricultural lease contract. Cancellation shall take place in good faith and not at a time unsuitable for the other party.

  • 354. Form of cancellation

The cancellation of an agricultural lease contract or a commercial lease contract of premises is valid only if it is prepared in a format which can be reproduced in writing.

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

  • 355. Cancellation in event of incapacity for work of commercial lessee of agricultural immovable

If, in the case of an agricultural lease contract, the commercial lessee becomes permanently incapacitated for work, the commercial lessee may cancel the commercial lease contract by giving at least one month’s notice.

  • 356. Death of commercial lessee in agricultural lease contract

(1) If, in the case of an agricultural lease contract, the commercial lessee dies, the spouse who lived together with the commercial lessee may take the place of the commercial lessee in the agricultural lease contract. If the commercial lessee did not have a spouse who lived together with him or her or the spouse does not wish to take the place of the commercial lessee in the agricultural lease contract, other successors have the right to take the place of the commercial lessee in the agricultural lease contract pursuant to an agreement between them.

(2) The spouse or other successors of a commercial lessee may take the place of the commercial lessee in an agricultural lease contract within one month as of the death of the commercial lessee by submitting a corresponding notice to the commercial lessor.

(3) If the person who takes the place of a party to an agricultural lease contract is evidently unable to manage the object of the commercial lease contract in a regular manner or if the commercial lessor cannot be expected to continue the commercial lease contract for other reasons, the commercial lessor may cancel the contract within 30 days as of receipt of a notice concerning the fact that the person will take the place of the party to the contract.

(4) If the spouse of the commercial lessee or any other entitled person does not take the place of the commercial lessee in the contract, the successors of the commercial lessee or the commercial lessor may cancel the commercial lease contract and shall give at least six months’ notice thereof in a format which can be reproduced in writing.

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

  • 357. Extension of agricultural lease contract at request of commercial lessee

(1) Upon the cancellation of an agricultural lease contract by the commercial lessor, the commercial lessee may demand the extension of the contract by a court proceeding within three months as of the receipt of the notice concerning cancellation, if extension could have been expected on the part of the commercial lessor. A commercial lessee shall submit an application to a court for extension of a commercial lease contract entered into for a specified term nine months before the expiry of the contract

(2) The commercial lessor shall prove that the commercial lessor cannot be expected to extend the contract. Extension of the commercial lease contract cannot be expected from the commercial lessor particularly:

1) if the commercial lessee has materially violated the obligations thereof arising from law or the contract;

2) upon insolvency of the commercial lessee;

3) if the commercial lessor, his or her spouse, close relative or close relative by marriage wishes to manage the object of the commercial lease contract himself or herself;

4) if the agricultural enterprise is not worth maintaining;

5) if the planning prescribes that the immovable will be used in a different manner.

(3) A court shall decide on the extension of a commercial lease contract for not longer than six years. Upon determination of the term for extension, the personal situation of the parties, the type of object of the commercial lease and other relevant circumstances shall be taken into account.

(4) Upon deciding on the extension of a commercial lease contract, the court may, at the request of either party, amend the commercial lease contract in order to bring the contract into conformity with the changed circumstances.

  • 358. Return of object of commercial lease contract

(1) After expiry of a commercial lease contract, the commercial lessee shall return the object of the commercial lease contract together with the accessories. The object of the commercial lease contract and the accessories shall be returned in a condition corresponding to regular management having been continued until the return of the object of the commercial lease contract.

(2) The commercial lessee shall pay reasonable compensation to the commercial lessor for any deterioration of the object of the commercial lease contract which could have been avoided by the commercial lessee by regular management.

  • 359. Reimbursement of expenses to commercial lessee

(1) If, upon expiry of a commercial lease contract, it becomes evident that the value of the object of the commercial lease contract has permanently and considerably increased due to improvements or alterations made with the consent of the commercial lessor, the commercial lessee may demand reasonable compensation therefor.

(2) The commercial lessee may demand compensation for any increase in the value of the accessories if the increase occurs due to work performed or expenses incurred by the commercial lessee. The commercial lessor may refuse to accept accessories created by the commercial lessee which, under the rules of regular management, are useless or too valuable for the immovable.

(3) Expenses other than those specified in subsections (1) and (2) of this section shall be reimbursed by the commercial lessor only if the commercial lessor is required to do so pursuant to the provisions regarding negotiorum gestio.

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

  • 360. Fruits of agricultural immovable

(1) The commercial lessee of an agricultural immovable does not have the right to fruits unsevered as of the expiry of the commercial lease contract, although the commercial lessee may demand reimbursement of any expenses incurred to obtain the fruits.

(2) The provisions of subsection (1) of this section also apply to trees not yet cut but subject to cutting. If the commercial lessee has cut more trees than necessary for regular management, the commercial lessee shall reimburse the cost of the timber to the commercial lessor to the extent which exceeds regular management.

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