SLOVENIA Law and Practice Contributed by: Blaž Ogorevc, Miha Štravs and Blaž Murko, Odvetniki Šelih & partnerji, o.p., d.o.o.
6. Commercial Leases 6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time The most common type of agreement that allows a person, company or other organisation to occupy real estate for a limited period of time without buying it outright is a lease agreement. A similar effect may be achieved by personal easements (ie, usufruct, use and apartment easement), as well as the building right, which is a right to own a built structure above or beneath the real estate of another person, and in effect comes close to ownership. 6.2 Types of Commercial Leases Slovenian law differentiates between different types of leases depending on the subject of the lease. The Obligations Code prescribes gen - eral rules applicable to all lease agreements. In addition to and/or instead of the general rules, mandatory provisions are prescribed by the Housing Act for leases of residential buildings and the Agricultural Land Act for leases of state- or municipality-owned agricultural land. In the past, leases of business buildings and business premises were also regulated by the Business Buildings and Business Premises Act; however, this Act was repealed and continues to apply to only lease agreements concluded before 19 June 2021. 6.3 Regulation of Rents or Lease Terms In principle, rents and lease terms are freely negotiable. However, the Housing Act applica - ble to leases of residential buildings designates rent as usurious if it exceeds the average market rent in the municipality for the same or a similar category of housing by more than 50%. Further - more, in accordance with the Agricultural Land Act, lease terms of state- or municipality-owned
agricultural land cannot be less than ten years (or 15 or 25 years for specific types of agricul - tural land). Regulation of rents and lease terms was enacted as a result of the coronavirus pan - demic; however, its validity has since expired. 6.4 Typical Terms of a Lease Length The length of lease term for business premises is typically agreed as a fixed period of between one and ten years (for offices) or between five and 20 (for facility, warehouses and retail). Extension options are also often agreed. In the past, fixed-term leases were far more common in comparison to indefinite lease terms, because the latter had to be terminated through court proceedings in accordance with the Business Buildings and Business Premises Act. Although this Act was repealed and (new) indefinite period lease agreements for business premises are no longer required to be terminated through court proceedings, fixed-term lease agreements are still more common. Maintenance and Repair of Real Estate In accordance with the Obligations Code, the landlord must maintain the condition of the sub - ject of the lease during the entire lease term and, if necessary, repair it. The landlord is obliged to reimburse the tenant for maintenance costs incurred by the tenant. However, the costs of minor repairs caused by the normal use of the subject of the lease and the costs of its use are borne by the tenant. Although the parties are free to set different terms of lease on maintenance and repair, in most cases the parties follow the statutory regulation. Nevertheless, in triple net leases, which are common in commercial (spe - cifically sale and leaseback) transactions, the burden of maintenance and repair is shifted to the tenant.
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