Termination of the lease of the business premises and notice of the right to object
Author of the article: Mgr. Martin Faktor, Mgr. Pavel Čech, ARROWS (office@arws.cz, +420 245 007 740)
The judgment of the Supreme Court of 10 December 2024, Case No. 26 Cdo 106/2024, brought a fundamental opinion on the question of the formalities of a notice of termination of a lease of business premises. The key point of the dispute was the question whether the absence of an instruction on the tenant's right to object to the notice and on the right to bring an action to review the validity of the notice renders such notice invalid.
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Background to the dispute
The applicant (the tenant) sought a declaration that the termination of the lease agreement for business premises, which she had already concluded with the defendant (the landlord) in 2019, was invalid. The tenant argued that the termination notice was invalid, inter alia, because of the absence of a notice of her right to object and to bring an action for review of the validity of the termination notice, which was intended to disadvantage her.
The Court of Appeal ruled against the tenant, upholding the validity and legitimacy of the notice, holding that in a lease relationship subject to a business purpose, the tenant cannot enjoy the enhanced protection typical of, for example, tenants of flats. The tenant therefore brought an appeal to the Supreme Court.
Opinion of the Supreme Court
The Supreme Court upheld the decision of the Court of Appeal and emphasised the following principles:
1. The absence of a notice does not invalidate the notice
Under section 2314 of the Civil Code, the tenant of business premises has the right to object to the notice and the right to bring an action to review the validity of the notice. However, the law does not expressly require the landlord to inform the tenant of these rights in the notice. The Supreme Court has held that in the case of a lease of premises used for business purposes, both parties to the contract are considered to be equivalent entities which are not subject to any special protection and are not subject to a special information obligation.
The opposite is true in the case of leases of flats, where the tenant is usually the weaker party and is afforded increased protection by law.
Landlords of business premises are therefore not obliged to include in the text of the notice of termination a statement of the right to object to the termination and the right to bring an action for review of the validity of the termination.
The absence of such a notice does not render the notice absolutely or relatively invalid.
2. Interpretation of contracts
In assessing the validity and validity of the notice, the Supreme Court also examined the content of the lease agreement. It emphasised that the interpretation of contracts is based not only on their language but also on the actual intention of the parties. In this case, it was important to establish whether the landlord had agreed that termination would be possible only on the narrower terms alleged by the tenant.
However, the tenant did not show that the landlord was aware of or agreed to her subjective and narrower interpretation of the contractual provisions. The termination was therefore found to be justified.
3. Obligation to take evidence and procedural objections
The Supreme Court also addressed procedural objections, such as the omission of evidence proposed by the tenant. It emphasised that the lower courts had a duty to give reasons for not taking the evidence. In the present case, the courts' reasons were not lacking and the courts' procedure was found to be in accordance with the law.
Correction of earlier decisions
It cannot be overlooked that the Supreme Court has previously, for example, in its decision of 11 May 2021 in Case No 26 Cdo 188/2021, admitted that the absence of a notice of objections to the termination of a lease of business premises may render the termination relatively invalid. However, the Supreme Court does not deal with this in the judgment under reference. It must therefore be inferred, in the spirit of fundamental legal principles, that the rubricated more recent decision prevails over the earlier decision.
Effects of the decision
This decision of the Supreme Court is of key importance for the practice in the field of lease relations for business premises. It confirms that the obligation to provide the tenant with notice of his rights is typical in situations where the other party is the weaker party (typically a lease of an apartment), not in commercial relationships between equals.
Nevertheless, landlords should be aware that a clearly worded and reasoned notice is the key to avoiding disputes. Tenants, on the other hand, need to actively protect their rights, know the time limits for objections and legal actions and thoroughly study the terms of the lease when concluding the lease.
Are you renting premises for business? The Supreme Court's ruling gives you greater legal certainty - the absence of a notice to the tenant of his rights when giving notice no longer renders the notice invalid.