This article was written in collaboration with Valery Berziņš, a judge at the Riga Arbitration Court.
As is well known, on May 1, 2021, a new law regulating the rental of residential premises came into force - the Residential Premises Rental Law.
A residential premises is considered to be an apartment (which has at least one living room, as well as auxiliary premises - a kitchen or kitchenette and a bathroom), as well as a separate living space (in the absence of ancillary premises in an apartment) or living space in an apartment if it is non-through. If any of the listed properties is rented out, this special law must be applied. In all other cases (for example, if you have real estate in Jurmala with the status of "guest house" and apartments), the Civil Law of the Republic of Latvia applies, the section on rental and lease (Art. 2112-2177).
The question "How do I apply an existing rental agreement to the new law?" is quite common. This applies to cases, for example, if an apartment rental agreement was concluded in 2020 and is still in effect despite the new law coming into force on May 1, 2021.
From experience, we can say that most often tenants and landlords do not monitor changes in the law and conclude an agreement to extend the rental period instead of an agreement to amend the rental agreement (to adapt an already concluded agreement to the new law).
An agreement is a short and simple document, while a rental agreement is more extensive. Developing a new rental agreement requires resources (for example, you need to hire a competent lawyer to do this work), and both parties (tenant and landlord) need to spend time reading, reviewing and agreeing to the new agreement.
However, we suggest that you approach this matter responsibly and check whether your current rental agreement complies with the requirements of the "Residential Premises Rental Law".
In particular, Article 8 provides for five main provisions that must be in the agreement:
1. the address, area and characteristics of the residential premises being provided for use;
2. the term of the residential premises rental agreement;
3. the amount of rent for the residential premises, the procedure and conditions for its payment, the conditions and procedure for changing the rent;
4. services related to the use of the residential space received by the tenant, the amount of payment for these services, the procedure and timing of payment;
5. information about persons living together with the tenant in the residential premises.
Let us briefly consider the main nuances.
- As follows from the second point, there must be a specific rental period.
This can be a date (for example, until March 1, 2025) or a period (the agreement is concluded for 12 months). It should be noted that many lawyers in their practice still encounter open-ended rental agreements. In this case, the tenant and landlord must agree on the term (and other conditions) by December 31, 2026. If they cannot agree and a dispute arises, a lawsuit must be filed in court by December 31, 2026 to consider the disputed issue.
- As for the third point, there are two options here.
One is that the agreement is concluded for one year. After a year, a new agreement is signed with the same tenant. The landlord can offer to conclude a new agreement with higher rent. The second option is that the agreement is immediately concluded for a longer period (for example, three years) and provides for the landlord's right to increase the rent every twelve months.
The increase may be linked to the consumer price index, market conditions, etc. We draw your attention to the fact that if the agreement contains a clause about increasing the rent once a year, and you conclude the agreement, for example, in October, then already in December the landlord will have the right to increase the rent. Therefore, you need to clearly and unambiguously indicate - an increase once every twelve months.
- The fourth point mainly concerns utilities.
The tenant can pay them directly to service providers, or pay them to the landlord as compensation.
- Regarding the fifth point, it should be remembered that according to Article 14 of the Residential Premises Rental Law, a tenant has the right to settle his spouse and children of both spouses, or each of the spouses, in the rented residential space if the landlord was notified of this in writing in advance.
The landlord cannot refuse; only notification is required. Please note - if persons are not in official marriage, then formally, the consent of the landlord is required for a partner to reside there.
In summary - if you have a residential premises rental agreement concluded before May 1, 2021, then check whether it contains the above five provisions. If it does, then everything is in order and the agreement complies with the new law.
If one or more provisions are missing - then we recommend concluding a new rental agreement, replacing the "old" agreement with a "new" one that will include all material terms. Another solution is an amendment agreement to the "old" agreement, which will include the missing provisions.
In cases where the rental agreement is concluded after May 1, 2021, it must initially contain all the above-mentioned provisions.
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