ALTERNA´s article about the opportunities for the lessor to protect him/herself against a tick-lessee

ALTERNA´s attorney-at-law and partner Siret Siilbek writes in the “Real Estate” extra of the March issue of the journal Director about the problems related to tick-lessees. Among other things, she says that although the problems related to tick-lessees caused a lot of debate some time ago, it did not lead to real changes at the legislative level.

Siret writes that the Estonian Obligations Act favors the interests of the lessee and therefore the lessors have relatively limited opportunities to protect their rights according to current law and case-law. The problem of tick-lessees is still actual, for example, the lease contracts often appear right before the acquisition of a property (at an auction for example) being extremely favoring to the lessee. In order to get rid of a tick-lessee an opportunity is to cancel the contract due to indebtedness when the lessee does not fulfill the obligation of payment. Here it is important to note that the right to cancel the contract occurs when the lessee does not pay the fee for three months in a row or if the lessee´s indebtedness is at least the amount of three months´ rental or side fees. Another opportunity for the lessor is stating that the contract is void due to it being inconsistent with good morals. There any several examples in the Estonian case-law where the court finds the fact that the lease contract is concluded maliciously in order to cause damage to the new owner, proved. It is also possible to cancel the contract after the acquisition of the property due to the lessor´s inevitable need to use it for his/her own good (to use this option immediate and actual proof of the need is necessary). If the contract is not valid (it is invalid or expired), it is possible to pursue the eviction of the lessee through court (already as a provisional legal protection during the trial). Siret notes that to protect the rights of the lessor, accurate and timely actions are necessary.

In summary, Siret thinks that the current regulation of lease contracts needs to be reviewed and updated in order to prevent abuses.

Read the full-length article at the “Real Estate” extra of the March issue of the magazine Director.

For further information please contact Siret by e-mail siret@alternalaw.ee or by calling +372 680 6850.

Law Firm ALTERNA