SLOVENIA Law and Practice Contributed by: Blaž Ogorevc, Miha Štravs and Blaž Murko, Odvetniki Šelih & partnerji, o.p., d.o.o.
parties to the lease agreement may under certain terms opt into the VAT system, thereby enabling the deduction of input VAT. 6.8 Costs Payable by a Tenant at the Start of a Lease Although not mandatory under the law, the par - ties to the lease agreement commonly agree that the tenant will pay a security deposit to the land - lord, which is usually determined in the amount of a few monthly rents. For commercial leases, security deposits are sometimes replaced with the procurement of a bank guarantee by the ten - ant to the landlord as security for fulfilment of the tenant’s obligations under the lease agreement. In certain cases, the landlord and the tenant will agree to split the fit-out costs (sometimes against a rent-free period, and sometimes not). 6.9 Payment of Maintenance and Repair In accordance with the Obligations Code, the costs of maintenance and repair (also) of com - mon areas are the burden of the landlord. How - ever, commercial lease agreements commonly shift the costs of maintenance of common areas used by several tenants, such as parking lots and gardens, to the tenants, and divide the costs proportionally between them. 6.10 Payment of Utilities and Telecommunications The utilities and telecommunications costs aris - ing solely from the business operations of the tenant are typically borne by the tenant, even if invoiced to the landlord. The utilities and tel - ecommunications costs related to the common services and infrastructure are typically allocated proportionally to each tenant. 6.11 Payment of Property Taxes Currently, there is no direct property tax payable in Slovenia, but there is a communal levy called
building land use fee, payable by the direct user of the constructed land or premises (a tenant in case of leased property). For office buildings or retail assets where there are several tenants using their own space or premises but co-using the common areas, the fee is paid by the land - lord for the common areas but is most often then charged proportionally to the tenants. The lease agreement typically also provides that where any new taxes are introduced or the use fee is replaced by another tax, the tenant will bear the costs. 6.12 Insurance Issues The person responsible for paying the costs of insuring real estate that is the subject of a lease can differ depending on the subject of the lease. For instance, for leases of residential buildings, it is most common that insurance is procured and paid for by the landlord. Similarly, for leases of commercial buildings, the landlord usually procures insurance for the subject of the lease, covering fire, storm, hail, water damage, etc. However, the costs are commonly shifted to the tenants as part of the operating costs. Also, the landlord’s insurance policies do not usually cover all risks, eg, tenant’s property or interrup - tion of business, which are in turn insured by the tenants themselves. Nevertheless, in triple net leases, which are common in commercial sale and leaseback transactions, all costs of insur - ing the real estate that is the subject of a lease are borne by the tenant. Since most business insurance policies did not expressly cover the coronavirus pandemic, which resulted in the interruption of business, it has proven to be dif - ficult for tenants to recover rent payments and other costs.
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