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• In practice, escrow account mechanism (with a bank or a
notary) is commonly used by the parties for payment of the
purchase price.
• Can be concluded with conditions precedent (odkladacími
podmienkami), whereas the transfer remain subject to
fulfilment of these conditions.
Contract for work (zmluva o dielo)
• Can be used for acquisition of buildings that have not yet
been constructed.
• It is a common practice that the purchaser pays the price step
by step along the construction steps until completion.
COMMERCIAL LEASES
• In Slovakia, a lease of a real estate property is governed by
several legal regulations depending on the subject of lease
(e.g. warehouse, flat, parking spaces, whole building).
• Leases of non residential premises (e.g. premises used for
commercial purposes) are regulated by the Act on Lease and
Sublease of the Non Residential Premises.
• The contract for lease of the non residential premises shall
include following essential terms, otherwise it could be
considered invalid:
–– clearly defined leased premises;
–– purpose of lease, which shall comply with the
construction documentation of the leased premises;
–– amount of the net rent (excluding the service charges);
–– due date for the rent and the method of its payment; and
–– the duration of lease.
• Generally, the parties are free to determine the conditions
of the lease (such as amount of rent, term of lease, notice
period, etc.)
Duration of the lease
• In general, the lease of non residential premises for business
purposes can be agreed for (i) a definite period of time; or
(ii) an indefinite period of time.
• The lease agreed for a definite period of time can be
terminated by landlord’s termination notice, unless otherwise
agreed by the parties, if:
–– the tenant uses the premises in breach of the lease
agreement;
–– the tenant is in delay with payment of rent or
accompanied services for more than a month; or
–– the tenant subleases premises without prior consent of
the landlord.
• The lease agreed for a definite period of time can be
terminated by tenant’s termination notice, unless otherwise
agreed by the parties, if:
–– the tenant ceases to hold the license for conducting
business, for purposes of which the premises were leased;
–– the leased premises become unfit for the agreed purpose
of use through no fault of the tenant; or
–– the landlord is in breach of its material contractual
obligations.
• The lease agreed for a definite period of time can be
prolonged by an agreement of the contractual parties,
automatic prolongation is generally possible.
• The lease agreed for an indefinite period of time can
terminated by landlord or tenant by a simple written
termination notice with three months notice period, unless
the parties have agreed otherwise.
Transfer of business
• Under Slovak law, it is not possible to transfer/assign all
rights and obligations under the lease (i.e. whole contractual
relationship) by a unilateral decision of one of the parties.
The validity of such an assignment on basis of an agreement
of the tenant, landlord and a third party is questionable, but
regardless seen quite often in practice.
• The creditor (e.g. landlord) can assign its claim against the
debtor (e.g. tenant) to a third party (e.g. bank) without prior
consent of the debtor unless otherwise agreed by the parties.
• The third party (e.g. mother company of the tenant) can
assume the obligations of the debtor (e.g. tenant) only with
the consent of the creditor (e.g. landlord).
• The lease of non residential premises can be transferred
by virtue of law, if it is a contractual relationship that is
considered to form a part of an enterprise, which is being
transferred under the agreement on transfer of an enterprise
or its part (zmluva o predaji podniku).
Rent and its evolution during the lease
• Amount of net rent is freely set by an agreement of the
contractual parties.
• Indexation of the rent is market standard and the contractual
parties are free to choose any index (which is sufficiently
determined in the agreement) – commonly used is the
Monetary Union Index of Consumer Prices published by
Eurostat.
• There is no statutory indexation of rent for standard leases.
Renewed lease
• Renewal of lease of the non residential premises is possible
upon an agreement of the contractual parties without any
limitations.
• Generally, the prolongation of the lease of non residential
premises is subject to the same conditions, unless the parties
agree otherwise.
TAX
Property tax
• The property tax related to owned real estate is determined
by the municipalities, so the tax varies depending on where
the real estate is located (even within the same city) and also
on the purpose it is used for (e.g. in Bratislava the property tax
on buildings for 2015 varies from EUR 0.30 per 1 m2 per year
to EUR 8.30 per 1 m2 per year).
Property transfer tax
• In Slovakia, the transfer tax for real estate was abolished on
January 1, 2005.
Direct acquisition of a property
• Income (gain) acquired from direct sale of a real estate
property is subject to income tax, while exemptions may
apply. Currently, the tax rates are 19 %/25% for natural
person and 22 % for legal entities.
• Direct sale of a building (or its part) including the land plot,
on which it is built, is exempt from the value added tax (VAT),
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