A lease agreement is an important legal document concluded between two parties that regulates the use of property for a specified period of time. Pursuant to Article 743 of the Civil Code of the Republic of Azerbaijan, a lease agreement is an arrangement under which property owned or used by the lessor is transferred to the lessee for use for a certain period.
Proper drafting of a lease agreement is essential to ensure legal security for both the lessor and the lessee.
Legal Nature and Key Features of a Lease Agreement
A lease agreement is characterized by the following legal features:
- It is concluded between two parties: the lessor and the lessee.
- The property is provided for temporary use; ownership rights are not transferred.
- It may relate to movable or immovable property.
- It has a fixed-term nature.
- It is provided in exchange for payment.
These features make the lease agreement legally significant in both everyday life and business activities.
Types of Lease Agreements
Lease agreements differ based on various criteria:
- Lease of immovable property – apartments, land, offices, shops.
- Lease of movable property – vehicles, equipment, machinery.
- Short-term and long-term leases – depending on the duration of the agreement.
- Commercial and non-commercial leases – depending on the purpose of use.
- Residential leases – rental of rooms and apartments.
Each type has its own specific legal procedures and conditions.
Conclusion of a Lease Agreement and Main Rules
A lease agreement is concluded by mutual consent of the parties and must be in written form. The main rules include:
- Indication of the essential terms of the agreement (description of the property, duration, payment terms).
- The effective date of the agreement.
- Submission of additional documents (registration, legal status) in cases of leasing immovable property.
- Notarization and state registration of the agreement where required by law.
Rights and Obligations of the Lessor and the Lessee
Obligations of the Lessor:
- To provide the property in a condition suitable for use.
- To ensure safety and legal transparency.
Obligations of the Lessee:
- To use and maintain the property properly.
- To pay the rent on time.
- To return the property upon expiration of the agreement.
- In case of breach of the agreement, the parties bear legal liability, and disputes are resolved through court proceedings.
Rent and Payment Mechanism
The amount of rent and payment terms must be clearly specified in the agreement. Common practices include:
- Monthly or annual payments.
- Cash, bank transfer, or electronic payments.
- Penalties and conditions for late payment.
- Rent increase mechanisms.
Termination of the Agreement and Legal Liability
Violation of the terms of the agreement may lead to the following consequences:
- Delay in payment by the lessee or damage to the property.
- Failure of the lessor to provide the property on time.
- Unilateral termination of the agreement and court claims.
Registration and Electronic Format of Lease Agreements
In cases of long-term lease of immovable property, the agreement must be registered with the state authorities. This serves to protect the rights of the parties.
In modern practice, digital lease agreements concluded using electronic signatures have become widespread. This method is considered more efficient and secure.
