Renting a residential unit for business purposes

Entrepreneurs want the premises they rent to meet all the requirements, which are often demanding. When running their company, they frequently decide to rent a residential unit for business purposes. This is good for both the tenant and the owner of the property. However, it is worth remembering what obligations both parties to such a transaction have.

• The most important formalities connected with renting a residential unit for business purposes
• Renting a flat and tax
• Changes to the unit – formalities
• Important arrangements

The most important formalities connected with renting a residential unit for business purposes

If you decide to run a business in a rented flat, you need to take care of several formal matters. First of all, you should ask the property owner for a document confirming consent to use the unit. In addition, a lot depends on the type of business activity carried out by the person who wants to rent the premises. Renting a residential unit for business purposes is governed by somewhat different rules depending on whether it is rented by a sole trader or by an entity with a specific legal form (e.g. a general partnership or a limited liability company). In the first case, an occasional lease (najem okazjonalny) that requires no complicated bureaucracy is often sufficient. In the second, drawing up a specific agreement will be a necessity, although the issue under discussion has many aspects.

READ ALSO – HOW TO INVEST IN OFFICES FOR RENT?

Renting a flat and tax

The use of a flat for business purposes is regulated by Polish law. The Act on Local Taxes and Charges contains a provision under which a change in the use of a unit must be reported to the city (municipal) office. This must be done within 4 days of the start of renting for business purposes. The competent tax authority then issues a decision on the amount of tax due. The correspondingly increased tax is then charged from the beginning of the month following the month in which the rental began. For example, if you rent a flat in May, you must already pay higher charges to the tax authority from June. Let us also add who should pay property tax, because it is a complicated matter. In fact, if the property is owned by an individual or a company, the owner pays the tax. If the flat is municipal, the tenant pays the tax. The entrepreneur may pay charges at the residential rate, but on condition that, besides running a business, they live in the same place – in which case they are subject to tax at the residential rate and not the business rate.

Changes to the unit – formalities

A flat rented for business purposes often has to be modified so that it meets the entrepreneur's requirements. The latter must remember, however, that the owner of the flat must consent to any renovation or conversion. In addition, it is important that both parties to the transaction conclude a written agreement. Drawing up such a document is a necessity when the lease is to last longer than a year – if there is no written agreement, the lease is deemed to have been concluded for an indefinite period. The same applies to a lease for a period longer than 10 years.

SEE PROPERTY LISTINGS IN RUDA ŚLĄSKA

Important arrangements

During the rental period, it is worth following all the provisions of the signed agreement. It is good practice to pay amounts due on time – ideally by the 10th day of the month. For the relationship between the parties to run smoothly, the unit should also be used in accordance with the provisions of the agreement. It is also good to remember that the costs of any minor repairs resulting from use are borne by the tenant. As for repairs which, under the agreement, are the landlord's responsibility, the landlord must be notified.

In the case of the lease described here, there are many complexities that need explaining. Because of them, it is worth relying on the expert knowledge of property management specialists. The REMAX Gold experts will answer all questions in this area.