MONTENEGRO Law and Practice Contributed by: Milan Keker, Aleksandra Bujkovic, Ivan Pejovic and Iva Rolovic, Keker, Bujkovic & Pejovic
6.13 Restrictions on the Use of Real Estate Lease agreements generally allow the parties to define how the property may be used, with any restrictions typically specified in the contract. While there are no specific statutory limits, the principle of “ordinary use” under the Law on Obligations may apply by default. 6.14 Tenant’s Ability to Alter and Improve Real Estate The tenant is generally expected to return the property in the condition in which it was received. However, the parties may agree that the tenant can improve or adapt the property to suit its needs, as regulated by their agreement. 6.15 Specific Regulations Lease arrangements are governed by the Law on Obli - gations, which sets out general provisions applica - ble to all leases, while providing more detailed rules for the lease of residential apartments and business premises. Furthermore, the Law on Tourism and Hos - pitality may apply where the leased property is used for hospitality-related activities, and the Law on State Property may be relevant in cases where the leased property is publicly owned. 6.16 Effect of the Tenant’s Insolvency Opening insolvency proceedings does not automati - cally end a real estate lease. However, once insol - vency begins, the other party to the lease can only claim unpaid amounts or enforce rights from before the proceedings as an insolvency creditor. The insolvency administrator has the right to terminate the lease with 30 days’ notice, even if the contract says otherwise. In that case, the landlord can claim compensation, but it is limited to six months’ rent. If the lease continues, the tenant must keep paying rent as agreed, and those payments are treated as priority claims against the insolvency estate. If insolvency is opened before the tenant takes pos - session of the leased property, either the administrator or the landlord may cancel the lease entirely.
6.17 Right to Occupy After Termination or Expiry of a Lease A tenant does not have the right to remain in the prop - erty after the expiry or termination of a commercial lease unless the parties agree otherwise. If a tenant remains in possession of the leased prem - ises after the expiration of the agreed lease term and the landlord does not raise an objection, it is deemed that a new lease has been formed for an indefinite period, under the same terms and conditions as the original agreement. Any third-party security provided in connection with the original lease – such as guarantees or sureties – automatically lapses at the end of the initially agreed term, unless its continuation has been expressly stipu - lated. Tenants are legally obliged to vacate the premises at lease end, and while landlords cannot pre-arrange eviction, they may claim damages for any delay. 6.18 Right to Assign a Leasehold Interest In residential leases, tenants generally may sublease unless the lease explicitly prohibits it. In commercial leases, subleasing or assigning is not allowed unless the lease permits it. In both cases, landlords often require prior written consent and may impose condi - tions. 6.19 Right to Terminate a Lease In addition to the lease naturally ending upon expiry of its agreed term, both the landlord and the tenant may usually terminate a commercial lease early under certain conditions. The landlord may terminate if: • the tenant continues to misuse or damage the premises despite a written warning; • rent remains unpaid 15 days after a written demand; and • the landlord is unable to use their own business premises due to reasons beyond their control and needs to use the leased premises.
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