This time, we have prepared an overview of the differences between residential and commercial lease agreements. Under a lease agreement, the lessor temporarily transfers certain property to the lessee for possession and use, and the lessee is obligated to pay a fee for the use of the property.[1]
In the context of a real estate residential lease agreement, the leased property typically comprises real estate designated for residential purposes, such as apartments, residential buildings, camp houses, and homes. In such cases, the lessee utilizes the rented real estate exclusively for household purposes, including daily sustenance. Conversely, under a commercial lease agreement, the lessor transfers certain assets to the lessee for possession and use, primarily for conducting business activities or achieving purposes specified in the charter.[2] For instance, the lessee has the right to use the property and derive benefits from it under a commercial lease agreement. On the other hand, a residential lease agreement grants the lessee only the right to use the property. This distinction highlights the different primary purpose of residential lease agreements compared to commercial lease agreements. Additionally, in the case of a residential lease agreement, if the owner sells the property without notifying the tenant, all rights and obligations of the lessor transfer to the new owner, and the residential lease agreement remains valid.[3] In other words, a change in ownership of the leased apartment does not terminate the contractual relationship. Furthermore, if the tenant has continuously occupied the same apartment for at least three years and has fulfilled their obligations under the agreement, the law grants the tenant a preemptive right to purchase the apartment and to renew the residential lease agreement under conditions determined by the tenant.[4]
Although residential and commercial lease agreements are common in society, many individuals fail to recognize or remain unaware of critical legal regulations, often leading to disputes between the parties. One such issue arises from the legal consequences of registering real estate commercial lease agreements. Unlike movable property, real estate is subject to a state registration system that governs the transfer of rights and ownership, irrespective of the physical transfer of the property.[5]
Therefore, it is important to note that a residential lease agreement must be in writing and registered with the real estate registry office in the form prescribed by law for the agreement to be valid.[6]
References:
[1] Section 287.1, Article 287 of the Civil Code
[2] Section 318.1, Article 318 of the Civil Code
[3] Section 297.1, Article 297 of the Civil Code
[4] Section 303.1, Article 303 of the Civil Code
[5] Open Society Forum, 2021. “Court Decision Research,” Series 1
[6] Section 318.3, Article 318 of the Civil Code
Disclaimer: This legal information and article are intended for general informational purposes only and have been prepared in accordance with the laws in effect at the time of writing. For legal advice, please consult a professional attorney.