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Termination or Withdrawal from a Tenancy Agreement for Business Premises under Slovenian Law

June 2011 - Real Estate & Property. Legal Developments by Wolf Theiss.

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According to the BBBP Act, (Official Gazzete of the socialistc RS Nr. 18/1974, 34/1988, 5/1990, Official Gazzete of the RS-old Nr. 10/1991, Official Gazzete of the RS/I 17/1991-ZUDE, Official Gazzete of the RS Nr. 13/1993, 66/1993, 32/2000, 102/2002)),  a tenancy agreement can be ceased with the common consent of the parties at any time.

(Art. 23 of BBBP Act).  However if there is no consent between the parties, such tenancy agreement can be ceased either (i) by termination of the tenancy agreement (odpoved najemne pogodbe) or (ii) by a withdrawal from the tenancy agreement (odstop od najemne pogodbe). The main difference between termination and withdrawal is that withdrawal is possible for cause, while termination comes into place when there is no cause on either of the contracting parties.

Termination (odpoved)

The BBBP Act distinguishes situations where a tenancy agreement is concluded for a definite or an indefinite period of time.

If the tenancy agreement is concluded for an indefinite period of time (parties did not agree on any time limit), either party may terminate the agreement upon the notice stipulated in the agreement. This notice period must, however, not be shorter than one year (Art. 24 of BBBP Act). In case the tenancy agreement contains a shorter notice period for a termination, such provision is null and void. Tenancy agreements must be judicially terminated (Art. 26 of BBBP Act), hence with fling a claim with the court. In such case (where the plaintiff is the landlord) it is recommended that the plaintiff also requests the vacation of the building or the business premises.

If the tenancy agreement is concluded for a definite period of time, a termination is generally not possible (since the agreement expires with the lapse of time - Art. 27 of BBBP Act). Termination is nevertheless possible if the parties agree upon termination. In such case, the provisions of the BBBP Act regarding the termination of the agreement for indefinite period of time are applicable.

Withdrawal (odstop)

In case of infringement of the contractual provisions, the other party can withdraw from the agreement.

The BBBP Act as lex specialis determines that the landlord can withdraw from the tenancy agreement and demand the vacation of the business premises, at any time, regardless of any contractual or legal provisions on the duration of the lease (Art 28 of BBBP Act): (i) if the tenant (even after the landlords’ warning) uses the business building/premises against the agreed use or uses it without care, so that considerable damage is being caused, (ii) if the tenant is in two months arrear with rent payments, (iii) if the landlord can not permanently use premises where he performed his activity (for reasons he is not responsible for) and therefore needs the business building/premises.

Tenants may also withdraw from tenancy agreements according to the general rules provided by the Code of Obligations (e.g. if the landlord does not maintain the business premises in appropriate condition for use). A withdrawal is effective from the day on, the party gives notice of the withdrawal (Art. 109 Code of Obligations).

Since the BBBP Act (1974) is in some parts rather obsolete, we recommend for contracting parties to determine as many provisions on termination and withdrawal as possible.

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