Can a tenant withdraw from our lease agreement?
Please note that there is a legal difference between withdrawing from a contract and terminating a contract. (You can read more about termination here.)
A tenant can withdraw from your lease agreement contract 1) if the property when they move in doesn’t match what was shown in your property listing or 2) in the Czech Republic only, for any reason in the first 14 days, due to consumer protection legislation and depending on if leasing properties is your livelihood.
The property does not match what was shown online
The tenant may withdraw from the lease if your property does not match the information that was on the Flatio portal when the reservation request was made - the moment a request is made, the current status of your listing is stored in our system database. If such a mismatch occurs, the tenant may withdraw from the contract by 20:00 on the day following the property handover. Therefore, if the lease starts on Tuesday, the tenant is entitled to withdraw from the contract by 20:00 on Wednesday if the reality of the property doesn’t correspond with what was advertised.
In this case, the tenant is entitled to a refund of both the first lease and the service fee. And since the landlord must present his property to tenants honestly, you will be fined up to one month's rent, depending on Flatio’s assessment of the situation.
The tenant’s right to withdraw from the contract, for this reason, expires when they agree to a smooth handover of the flat or at 20:00 the day following handover.
Withdrawal due to consumer protection law
The tenant may also withdraw from the lease contract within 14 days of signing the lease. This option is based on consumer protection law, which is an integral part of civil law and which takes into account the relationships between traders and consumers (customers).
In the Czech Republic, this issue is regulated by NOZ (Act No. 89/2012 Coll., New Civil Code, as amended). As the lease agreement between you and the tenant is concluded remotely online ("distance"), the same terms and conditions apply as for the purchase agreement when shopping at e-shops.
When does this type of withdrawal affect me?
If leasing this property is a source of your livelihood and if you hold a trade or business license (and are listed here) then in the eyes of the law, you are probably acting as an entrepreneur when you sign a lease. You probably rent for shorter terms and your tenants are staying at the property for recreational purposes.
But if you are renting as a private person and not as an entrepreneur (you probably only rent from time to time and you prefer longer rentals) then this will not affect you and your tenants will not be able to withdraw from the lease within 14 days for the reasons outlined above.
Therefore, if you meet the relationship between the entrepreneur and the consumer, the tenant is entitled to withdraw within 14 days from the date of signing the lease agreement without giving any reason. Note that the date of signing is the day that the tenant signs the lease agreement, not the day that he or she moves in or accepts the property handover. (For more information, see this.)
- Withdrawal BEFORE STARTING Lease Agreement
Should the tenant withdraw from the contract within 14 days of signing the contract before moving in, the landlord will return the entire first rent and service fee.
This does not affect you at this time, as the first rental would be sent to you only after confirming the smooth handover of the housing to the tenant.
- Withdrawal AFTER STARTING Lease Agreement
However, if this withdrawal occurs after the tenant has moved in, the rent is returned to him in proportion to the number of days spent at the property, and you will send the remaining rent compensation back to the tenant.
How do we start the process?
If the tenant wants to use the option to withdraw from the contract within 14 days and is legally defined as a consumer (i.e., you are renting to the tenant as an entrepreneur), contact our customer support at [email protected].