Renting out a flat without a contract – what are the consequences?

Renting out a residential unit to another person and collecting payments for it constitutes income that should be reported to the tax office. In light of this, making a flat available for payment without a contract is contrary to the regulations in force. This means that in this situation both parties to such a transaction should expect consequences.

Renting out a flat without a contract and the owner's obligations

The owner of a flat who has decided to rent it out to third parties must report this fact to the tax office. In doing so, they can choose the method of taxation. They may opt for the registered flat-rate tax (ryczałt ewidencjonowany) of 8.5%, PIT, or the general rules (18 and 32%). Once they have made a decision, they must submit the relevant document by the appropriate deadline. For example, if the lease began by 20 April, the visit to the tax office must take place by 20 May at the latest. An application for taxation of the income must also be submitted then. Otherwise, sanctions must be expected. It is worth remembering that renting out a flat without a contract and without paying tax on the income obtained this way has certain consequences.

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Sanctions for renting without a contract

When considering the problem of renting out a flat, we must remember that it does not matter what kind of contract we conclude. It may be oral or written – both are binding and have the same legal force. It is worth noting that a written contract is mandatory when the parties to the transaction want to work together for longer than a year. First of all, a document signed by both parties is confirmation that they agree to the terms described in it. In addition, without a binding document neither party will be able to assert their interests in court, should that become necessary.

READ ALSO – RENTING A FLAT AND THE REGISTRATION OBLIGATION

A flat rented out without a contract – a multifaceted problem

Renting out a house or flat without a proper contract (oral or written) has – as we have shown – legal and tax consequences. In addition, the lack of a contract between the parties may result in other unpleasant situations. There have already been incidents where the owner had trouble getting rid of a tenant. It has also happened that the owner did not receive the monthly payment due. These situations have occurred many times in various places and certainly still do. There have also been cases where the rented unit was completely destroyed. If a contract had been drawn up, such extreme situations might not have arisen.

READ ALSO – THE MOST IMPORTANT ELEMENTS OF A TENANCY AGREEMENT

Renting out a flat is a rather problematic matter. When it comes to managing a rented property, it is therefore worth turning to specialists for help. The experts at REMAX Gold know the answers to all questions on this subject. With their help, serious legal and financial sanctions can be avoided.