Facts and misbeliefs concerning the sublease market

1. The landlord’s permission is required for the tenant to be able to register the apartment as place of residence

Registering the address with a valid lease contract is not an extra option but an obligation that requires no special permission from the landlord and the landlord cannot, therefore, prohibit the tenants from doing it. With a contract signed by two witnesses, anyone can register their sublease as their place of residence, without the need of the landlord’s signature on the registration form. This can be done easily in any Registration Office, where you need to fill in a form and you receive your residence card immediately. However, it is also important to know that the following statement is also a misconception:

1./a Registering the address gives the tenant a right of residence or additional rights

Registering the address does not come with any additional rights, apart from allowing the tenant to check in with the district doctor or temporarily receive their official letters at the address. Registering the apartment as place of residence does not authorize anyone to use the apartment, only the written lease contract guarantees this right. At the termination of a valid lease contract, the law does not differentiate between tenants who have or do not have a temporary residence address at the leased address.

2. As a tenant, I have to pay for parking

If you rent an apartment in a place where you have to pay for parking on the street, the problem may be that parking your car in front of the apartment is expensive. In such case, different regulations apply in each district (for example there is a discounted parking card specifically for tenants), but the first point, namely, registering your residency, is usually the solution, as this allows you to park free of charge in pay zones of a given district with a municipal license.

3. The total cost of the common charges, including any renovation fund, is paid by the tenant

When renting a flat, the overhead costs are borne by the tenant, because its the tenant who uses the electricity or water. This also involves the common charges as often the common charge includes some overheads (water, garbage disposal fees, general maintenance, etc.) and since the tenant is the user of the apartment it is in his/her interest to have the elevator operating or the stairway clean. However, it is important to note that the common charge often includes a renovation fund, which in turn should be borne by the landlord, as the property is owned by them and the renovation of the stairway will increase the value of their apartment. The case may be different if, following the German model, someone would rent a property for the long term, for example for 10–20 years. However, this is almost unprecedented in Hungary. In each case, it is important to include in the contract how much the tenant pays for the common charges, and in general, in the case of 1–2 year contracts, the remaining renovation fund is to be borne by the landlord.

4. Tenants with pets should be avoided

Many landlords refrain from choosing a tenant who would like to move in with a pet, fearing that the pet will cause significant damage to the property. According to BES, with many years of experience in the housing market, there are several very simple solutions to this situation. One of these is that when signing the contract, you agree to a quite expensive and extensive cleaning, which is paid by the tenant before moving out of the apartment. Cleaning adjusted to market prices is a one-off payment, it costs typically up to some ten thousand forints, which can be a perfect middle ground solution for both parties. Besides, if the owner feels it is not enough due to the type of the animal, the landlord may ask the tenant for an additional half month deposit, as this will provide relief in the event of damage, but if the property is not damaged, this extra deposit will be returned to the tenant. It is important, however, that if the landlord thinks the additional deposit is necessary, this should also be indicated in the contract and handled in accordance with the security deposit law as well as the rest of the deposit.

5. The sublease market has been a demand market for years

Most landlords think that demand in the sublease market is almost always significantly higher than supply, so properties in any condition can be let out at any price and within a short period of time. But the situation is more complicated than that. Properties that have a good value for money are indeed easy to let out most of the time. However, what we see — almost everywhere in the world — that the market in recent years has been operating more quickly than average, is largely due to the fact that sublease market prices have risen significantly above the level of solvent demand, meaning that a substantial part of the market is overpriced. Regarding their value (when the property was refurbished, what transportation possibilities it has, etc.), homes that are expensive, that are not in a good location or not in a good condition often stay empty for months which results in a significant loss of income for the owner. We have written about this and about how you can prevent these idlings here.

If there is a topic you would like to read about, write us and we will write about it on the BES blog!