Standard Form Contract For Lease ENG

Table of Contents
STANDARD FORM CONTRACT FOR COMMERCIAL LEASES ................................................................. - 2 (1) SCHEDULE ..................................................................................................................................... - 2 (2) GENERAL TERMS AND CONDITIONS ............................................................................................. - 7 1. Special Pre-Conditions ................................................................................................................... - 7 2. Premises ........................................................................................................................................ - 7 3. Term, Extensions and Early Termination ...................................................................................... - 7 4. Rent and Payment .......................................................................................................................... - 8 5. Landlords Warranties and Indemnities ......................................................................................... - 9 6. Landlords Duties.......................................................................................................................... - 11 7. Tenants Warranties, Rights and Responsibilities ........................................................................ - 12 8. Remedies ...................................................................................................................................... - 14 9. Disputes and Applicable Law ....................................................................................................... - 15 10. General ....................................................................................................................................... - 15 USERS GUIDE TO THE STANDARD FORM FOR COMMERCIAL LEASE CONTRACTS ........................... - 17 1. Special Pre-Conditions ................................................................................................................. - 17 2. Premises ....................................................................................................................................... - 18 3. Term, Extensions and Early Termination ..................................................................................... - 18 4. Rent and Payment ........................................................................................................................ - 19 5. Landlords Warranties and Indemnities ....................................................................................... - 20 6. Landlords Duties.......................................................................................................................... - 25 7. Tenants Warranties Rights and Responsibilities ......................................................................... - 27 8. Remedies ...................................................................................................................................... - 30 9. Disputes and Applicable Law ....................................................................................................... - 31 10. General ....................................................................................................................................... - 33 GENERAL GUIDELINES TO THE STANDARD FORM COMMERCIAL LEASE CONTRACT ....................... - 35 The Concept of a Lease .................................................................................................................... - 35 Formal Requirements for Lease Signature....................................................................................... - 35 Tracing Property Ownership ............................................................................................................ - 36 Lack of Permits ................................................................................................................................. - 36 Unpaid Utility Bills ............................................................................................................................ - 37 Checks on a Tenant .......................................................................................................................... - 37 Lease Duration and Early Termination............................................................................................. - 37 Rental Payments .............................................................................................................................. - 37 Late Payment ................................................................................................................................... - 38 Repairs.............................................................................................................................................. - 38 -
STANDARD FORM CONTRACT FOR COMMERCIAL LEASES

The Lease Agreement is two parts: (1) the Schedule, and (2) the General Terms and Conditions.
DATE:
PARTIES: 1. Landlord(s): 2. Tenant(s):
(1) SCHEDULE
This Schedule should be read in conjunction with the attached General Terms and Conditions, and then completed in detail. Guidance Notes are provided alongside the General Terms and Conditions.
Clause Number 10.2 Contact Details (including for notices): Insert details in this column, or select Yes/No, etc.
Landlord(s) Name(s):
Address:
ID number or business registration number:
Fiscal number:
Phone number:
Email:
Tenant(s)
Standard Form Contract for Commercial Leases with Legal Commentary and User`s Guide - 2 -
Name(s):
Address:
ID number or business registration number:
Fiscal number:
Phone number:
Email:
Cadastral Details 2.1 Cadastral zone/municipality:
2.1
Parcel number:
Premises 2.1 Address:
Describe area leased: 2.1 Number of floors:
2.1
Square meters:
Parking space(s)? 2.2 Describe space(s):
Yes / No
2.2
Outside walls included?
Yes / No
Is a plan attached?
Yes / No
Special Conditions 1.1 Describe any work to be carried out by the Landlord before the
Start Date of the Lease, or other agreed date:
1.2
Describe any documents to be provided before the Start Date, or other agreed date:
1.4
State any change from the daily penalty rate for failure to comply with Pre-Conditions:
Term of Lease
3.1
Start Date:
3.1
End Date:
3.2
Tenant has Right to Extend?
Yes / No
3.2
Length of Extension:
3.3
Is Tenant able to terminate the Lease early?
Yes / No
3.3
Length of notice for early termination
Days
Rent
4.1
Amount in Euros:
4.4
Frequency of Rent Payments Due:
Monthly / Quarterly / Yearly
4.5
Date Rent is Due: Landlords Bank Name:
4.3
4.3
Landlords Account Number:
Any disclosures by Landlord
about the property, such as problems with building permits, etc.? Describe in detail, including any proposed remedy: 1.3 and 7.5.3 1.3 and 7.5.3
Security Deposit?
Yes / No
Amount of Security Deposit, in Euros:
Repair obligations 6.2.1 State here any changes to the arrangements in the clauses:
6.2.1
State here whether Tenant or Landlord is responsible for repairing heating and radiators:
Landlord / Tenant
Utilities and Municipal Tax
6.4 and 7.2
Does the Rent include the cost of all utilities?
Yes / No
Changes to the standard provisions in the Lease on utilities (if changes are not clear, then general terms apply): Is the Tenant responsible for paying electricity? Yes / No Is Tenant responsible for water charges? Is Tenant responsible for rubbish collection payments? Is Tenant responsible for district heating charges? Is Tenant responsible for telecoms and internet? Is the Landlord is going to be responsible for paying municipal property tax? Yes / No
Yes / No
Yes / No
Yes / No
7.2.2
Yes / No
Purpose of Use by Tenant 7.3.1 Describe here the purpose for which the Tenant will use the Premises, for example, a warehouse, shop, or restaurant:
7.3.2
Does the Tenant have a right to put signage on the building?
Yes / No
7.3.2
Does the Tenant have the right to make alterations to the Premises? If yes, detail the changes permitted:
Yes / No
6.7
State any changes to the Clause that addresses leasing to competitors:
7.4
Subleasing permitted? List the Landlords property, e.g. furniture, which is included with the Lease, and state its condition:
Yes / No
7.5.1
Kosovo Chamber of Commerce

9.3
Mediation/Arbitration Institution that will be used in case of dispute:
or American Chamber of Commerce in Kosovo
Schedule notes:
(2) GENERAL TERMS AND CONDITIONS RECITALS

A. The Landlord owns certain land and building(s) with the Cadastral Details noted in the Schedule. B. The Tenant wishes to lease from the Landlord, and the Landlord wishes to lease to the Tenant, the Premises described in the Schedule pursuant to the terms and conditions in this Agreement or Lease.
1. Special Pre-Conditions
1.1 The Landlord agrees to carry out the works/renovations/adjustments described in the Schedule on or before the Start Date or the date specified in the Schedule. 1.2 The Party/Parties described in the Schedule agree to provide the document(s) described in the Schedule on or before the Start Date, or the date specified in the Schedule. 1.3 If indicated in the Schedule, the Tenant agrees to pay the Security Deposit on or before the Start Date. 1.4 If a Special Pre-Condition(s) is not met by the Landlord, the Tenant may either terminate this Lease immediately on written notice to the Landlord, without penalty or charge, or the Tenant may charge the Landlord a penalty as set out in the Schedule for each day that the Landlord is late in complying. 1.5 If a Special Pre-Condition is not met by the Tenant, then the Landlord may terminate this Lease on written notice to the Tenant before the Start Date, without penalty or charge.
2. Premises
2.1 The Landlord hereby leases to the Tenant, and the Tenant hereby leases from the Landlord, the Premises described in the Schedule, together with the right to use any of the Landlords items/furniture listed in the Schedule. 2.2 The Premises include the car parking space(s) and any yard or outside space described in the Schedule, and unless stated otherwise in the Schedule, any appurtenances and the outside walls and roof where relevant.
3. Term, Extensions and Early Termination

3.1 Term Subject to other terms in this Lease, the Term of the Lease shall be the period that commences on the Start Date in the Schedule, and expires on the End Date in the Schedule. 3.2 Extension
3.2.1 If the Schedule indicates that the Tenant has a Right to Extend, then the Tenant may extend the Term of the Lease once for the Extension Period set out in the Schedule, or if no period is so indicated, for the same period as the initial Lease. If the Tenant wishes to exercise its Right to Extend, it must give the Landlord at least sixty (60) days written notice prior to the initial End Date, stating the Tenants wish to extend. 3.2.2 If the Tenant exercises this Right to Extend the Term, all terms and conditions of the Lease shall remain as provided here. 3.3 Early Termination Unless the Schedule indicates otherwise, the Tenant may, in its sole and absolute discretion, during the Term terminate this Lease at any time before the End Date, or the end of any Extension period, without penalty by giving prior written notice to the Landlord of the Tenants intention to terminate. The Tenant must give the prior written notice to the Landlord at least sixty (60) days, or any other notice period indicated in the Schedule, before the intended termination date.
4. Rent and Payment

4.1 The Tenant shall pay the Landlord the Rent set out in the Schedule during the Term, and any extension. In addition to the Rent, the Landlord may charge VAT if required by law, provided that the Landlord provides a copy of his VAT certificate and a valid VAT invoice to the Tenant. 4.2 The Landlord shall, if requested by the Tenant, provide the Tenant with a valid tax invoice for the Rent and any VAT. The invoice shall include the Landlords full name, fiscal number, VAT number (if relevant), date and rent period, and shall itemize the VAT separately. 4.3 The Tenant shall pay the Rent to the Landlord by making payment into the Landlords bank account that is noted in the Schedule, or into any replacement bank account in the Landlords name that the Landlord notifies the Tenant of in writing at least seven (7) days prior to the due date for the Rent. 4.4 The Rent shall be paid as set out in the schedule, for example, monthly, quarterly or yearly. 4.5 The Rent shall be paid on the Payment Date for the Rent set out in the Schedule, except for the first payment, which must be made the day after the Leases signing. If the date this Leases signing is not the Payment Date for the Rent, then the amount of rent due after signature but before the next agreed-to Payment Date shall be pro-rated to the next Payment Date. All payments shall be made in Euros. 4.6 If this Lease is validly terminated before the End Date or the end of an Extension Period, then the Rent shall be paid on a pro-rated basis up to, and including, the date on which the Lease terminates. All advance payments of Rent shall be refunded by the Landlord in the amount that corresponds to the period of time after the termination date that the Tenant has given valid written notice of. 4.7 If the Tenant is late paying the Rent by more than three (3) days, then the Landlord may by invoice charge the Tenant interest on the late payment from the date of late payment until actual payment at the average Kosovo bank overdraft rate set out in the most recent Central Bank of Kosovo publication prior to the date the Rent was due. 4.8 The Rent indicated in the Schedule is the gross Rent, unless otherwise stated. The Tenant shall deduct any tax withholding required by law from the Rent on behalf of the Landlord, and the Tenant
shall provide an annual tax withholding certificate to the Landlord, as required by law. Tax withholdings are not deducted from the VAT element.
5. Landlords Warranties and Indemnities

If the Landlord is in breach of or wishes to make a disclosure under any of these warranties at or prior to the Leases execution and the Tenant agrees to accept that breach or disclosed breach and not claim for the breach, this will be stated in the Schedule. 5.1 Ownership The Landlord warrants that: 5.1.1 It is the sole and lawful owner (or, in the case of formerly socially-owned property, owner of a 99-year lease) of the Premises, and that the Landlord is duly authorized and able to enter into this Lease and perform the obligations set out in this Lease; 5.1.2 It owns and has all rights to use and enjoy the Premises (including any land underneath the Premises), and is the valid registered owner (either of full title or a 99-year lease) in the relevant Kosovo cadastre; 5.1.3 It will provide the Tenant with an up-to-date, stamped possession list/certificate of ownership from the cadastre for the Premises on the Tenants request, and on the condition that the Tenant pays the cadastral fees for obtaining this document. This document may be requested by the Tenant not more often than once every six months. 5.2 Vacant Possession and Undisturbed Use The Landlord warrants that: 5.2.1 The Tenant may peaceably enjoy vacant possession of the Premises throughout the Term, and will be able to use the Premises for the Purpose of Use described in the Schedule for the Term (and any extensions thereof) without any interruption or disturbance from Landlord, or any other person claiming by, from, through, or under the Landlord, or acting as agent of the Landlord, and without the Landlord occupying the Premises, whether via its or others belongings, rubbish or waste; 5.2.2 It knows of no likely disturbance from neighbors, and that none of the activity of the neighbors is likely to disturb the intended Purpose of Use described in the Schedule by the Tenant. 5.3 Authority to Enter into Lease The Landlord warrants that: 5.3.1 It has full right, power, and authority, under applicable laws, rules, and regulations in effect in Kosovo and the municipality where the Premises are situated, to execute and deliver this Lease, and perform all of the Landlords obligations in the Agreement during the Term of the Lease, including any extensions to the Term; and 5.3.2 Its execution of this Lease and the exercise of the rights and obligations by the Landlord under this Agreement do not constitute, and will not result in, any breach of any other agreement that the Landlord has entered into. 5.4 Compliance with the Law, Regulations and Lender Requirements
The Landlord warrants that: 5.4.1 The Premises comply with all applicable laws, rules and regulations of all public authorities in relation to the Purpose of Use set out in the Schedule, including that the Premises meet all building regulations relating to standards and quality of build, including seismic regulations, and the Premises are safe, secure and fit for the Purpose of Use set out in the Schedule; 5.4.2 The Premises have a building permit that covers the full extent of the build of the Premises, and the Premises have received the technical acceptance certificate and permit for use, and any other necessary certificates for the intended Purpose of Use, from the municipality. Further, the Premises fully comply with these and the building permit, and other certificate fees have been fully paid. Upon request, the Landlord will provide the Tenant on with a copy of the building permit, technical acceptance, and any other relevant permits, and evidence of payment of the related fees; 5.4.3 There is no reason related to the Premises as to why the Tenant will not be able to obtain a business or municipal permit for the Premises that is required for the intended Purpose of Use described by the Tenant in the Schedule; 5.4.4 All consents, approvals, licenses, and authorizations required of any governmental authority necessary for the Landlords execution, delivery, and performance of this Lease have been obtained, and are in full force and effect; 5.4.5 There is no reason why a municipal permit for a generator to be installed in or near the Premises, or permits for the Tenants usual signage on the Premises consistent with the Purpose of Use by the Tenant, will not be obtained from the municipality; 5.4.6 There is no mortgage, tax lien or other lien on the Premises, other than that disclosed in writing to the Tenant, and that any mortgage holder has consented to the Lease. 5.5 Utilities and Municipality Property Tax The Landlord warrants: 5.5.1 There are no unpaid bills or debts relating to electricity, water, rubbish, district heating, telecom, internet (utilities) for the Premises, and no disputes with the utilities companies relating to the Premises; 5.5.2 The Premises has its own separate utilities connections, or there is no reason why such connections will not be obtained, and why internet or telecom or other connections will not be possible; 5.5.3 There are no unpaid municipality property tax bills, and the Landlord itself or the Landlords business has no tax or other debts that could affect the Premises. 5.6 Disputes Regarding Use, Ownership and Re-development The Landlord warrants: 5.6.1 It has not received (itself or via anyone else) notice of any formal or informal claims or disputes relating to the Premises, including claims of ownership or access rights by a third party; 5.6.2 It has not received any notice of expropriation or intention to redevelop from the municipality or any other public body in Kosovo, and is not aware of any intention to re-develop the Premises or locations near the Premises;
5.6.3 It has not received any notice of non-compliance with construction permits, use permits, municipality, laws or building regulations, and no environmental notice, and is not aware of any pending proceedings or of any infringement due to any such non-compliance.
6. Landlords Duties
6.1 Delivery of the Premises The Landlord shall cause the Premises to be vacated and deliver the Premises to Tenant in a proper state and condition for the Purpose of Use, so that the Tenant can move in by the Start Date. 6.2 Repairing and Maintaining the Premises 6.2.1 Unless other repair and maintenance arrangements are set out in detail in the Schedule, the Landlord shall be responsible at its own cost for undertaking prompt remedial repairs and preventative maintenance of the structure, so that the Premises remain fit for the Purpose of Use. The structure shall include the roof, outside walls, plumbing, and guttering, and unless the Schedule states otherwise, electrical wiring, heating and radiators, but shall exclude any interior parts of the Business Premises that are not structural, such as interior floors, interior walls, and sanitary facilities. The Landlord will to the extent possible arrange repair and maintenance in a way that causes the minimum disruption to the Tenants business. For example, repairs and maintenance should be conducted outside of business/office hours, and the Landlord will give the Tenant at least fourteen (14) days advance written notice of such, except in an emergency. 6.2.2 If any plumbing or electrical repairs arise from the misuse or use of the Tenant, such as blockages caused by or via the Tenant, or if the need for repairs arises from the Tenants installations, the Landlord may charge the Tenant a reasonable amount for the costs of such repairs. The Landlord must present evidence to the Tenant of the costs, including valid tax invoices for its purchases; the Landlord may not charge any mark-up or make any profit on this activity. 6.3 Recording the Long-term Lease in Cadastre, Notification of Mortgage Holders The Landlord shall: 6.3.1 If the Tenant requests, record or register the existence of this Lease as an encumbrance against the relevant parcel number in the cadastre. The Tenant will pay the cadastral fees for such registration; 6.3.2 Notify any lender or holder of any mortgage over the property of the existence of this Agreement and any extension of the Term and shall obtain consent from the lender or mortgage holder where appropriate to the Lease. 6.4 Utilities Unless the Schedule indicates that the Landlord is responsible for any relevant utilities and they are included in the Rent, the Landlord will: 6.4.1 Ensure the relevant utilities bills for utilities required by the Tenant are transferred to the Tenants business name without delay and with zero debts, or the Landlord shall take all measures to facilitate a separate utility connection for the Tenant in the Landlords name if the Premises are part of a larger building with a single utility connection;
6.4.2 Provide the Tenant with good access to all relevant utility meters, forward to the Tenant any copies of bills or of any correspondence received from the utilities immediately and without delay, and permit the Tenant to make any necessary connections and installations, including for telephone, internet, cable TV, satellite or otherwise. 6.5 Notifications of Disputes or Claims or Formal Legal Notices The Landlord shall: 6.5.1 Immediately forward to, or notify the Tenant in writing of, any notices, post, claims or other issues that the Landlord receives (including notices or claims under clause 5), or of which the Landlord becomes aware that may affect the Tenants full use of the Premises for the Purpose of Use, or the Tenants rights under this Agreement; such notices include those from public authorities or neighbors regarding developments; 6.5.2 Promptly file notices of objection to, or enforce the rights related to, the Premises with third parties or public authorities when requested by and appropriate for the Tenant; examples include rights to access the property, or the right to object to development in the vicinity of the Premises, and the right to object to development in the vicinity of the Premises. 6.6 Evidence of Compliance The Tenant may at any time, and on request, immediately require the Landlord to provide evidence of compliance with any of the warranties in Clause 5, or any of the obligations in this Clause 6. 6.7 Leasing to Competitors of the Tenant Unless the Schedule states otherwise, if the Premises form part of a larger building or group of buildings in the vicinity of the Premises, to the extent that the Landlord now or in the future owns any such buildings or part thereof in the vicinity, including next to or above or below the Premises, the Landlord agrees not to lease or sub-lease any such neighboring buildings or part to any other Tenant that competes in terms of business with the Tenant.
7. Tenants Warranties, Rights and Responsibilities

7.1 Authority to Enter into Lease The Tenant warrants that: 7.1.1 It has full right, power, and authority under applicable laws, rules, and regulations in effect in Kosovo and the municipality in which the Premises are situated to execute and deliver this Lease, and to perform its obligations during the Term of the Lease or any extensions of the Term; and 7.1.2 Its execution of this Lease and the exercise of the rights and obligations by the Landlord under this Agreement do not constitute, and will not result in, any breach of any other agreement that the Tenant has entered into. 7.2 Utilities, Municipality Property Tax and Insurance 7.2.1 The Tenant shall be solely responsible for and agrees to undertake the prompt payment of all charges for utilities used by the Tenant during the Term in the Premises, including telephone calls, internet, heating, lighting, fuel, electricity, rubbish collection, water and sewerage, provided such charges are separately metered or separately accounted for.
7.2.2 Unless the Schedule states that the Landlord is responsible, the Tenant shall promptly pay the municipal property tax, either by bills from the Landlord, or if the Tenant so requires, by direct bills in the Tenants own name. 7.2.3 The Tenant may (but shall have no obligation to) take out any insurance in relation to its own property, the Landlords property, or the Premises. 7.3 Use of the Premises, Alterations 7.3.1 The Tenant may use the Premises only for the Purpose of Use described in the Schedule. If the Tenant wishes to change the Purpose of Use, it must obtain written consent from the Landlord, and such consent must not be unreasonably withheld or delayed. 7.3.2 Unless the Schedule or the Plan indicates otherwise, the Tenant may use the outside of the Premises, including but not limited to attaching signs on the outside of the Premises, or parking cars, generators, furniture or other items, and provided that the Tenant obtains the relevant permissions required by law. The Tenant may also apply for permits for use of the municipality or other land in the vicinity without notifying the Landlord. 7.3.3 The Tenant may make internal and limited external alterations to the Premises, unless otherwise stated in the Schedule. Internal alterations may include destroying non-load-bearing walls, or putting in flooring or a kitchen and sanitary facilities, provided that any demolition or alteration does not affect the stability of or value of the Premises, and provided that all alterations comply with building regulations and applicable law. The Tenant shall provide the Landlord with evidence of compliance when appropriate. Further, unless otherwise stated in the Schedule, the Tenant mayprovided it complies with the law and regulationsattach or install signs and air conditioning units, cables and pipes, security alarms, fire prevention equipment, heating and cooling systems, and if necessary, satellite or radio receiver equipment onto or within the Premises. The Tenant shall, however, ensure that at the end of the Term or any extension, the Premises are returned to a similar condition (although subject to wear and tear) as existed on the Start Date of the Lease. 7.4 Sub-Leasing Unless the Schedule states otherwise, the Tenant may sub-lease all or part of the Premises by giving written notice to the Landlord with the sub-lessees details, and the details of any sub-lease arrangement. If sub-leasing is permitted and occurs, the Tenant will still be responsible for compliance with this Lease, including both with regard to Rent payment and liability for the actions or inactions of the sub-lessee. 7.5 Maintenance and Security, Including Security Deposit 7.5.1 Unless per Clause 7.3.3 above, the Tenant may not destroy or damage the Premises, or any items of the Landlord that are listed in the Schedule. If the Tenant does accidentally destroy or damage the same, then it must reimburse the Landlord for the market value of such items. The Landlord must notify the Tenant with evidence of the market value of such items, and any repair costs, by providing quotes or invoices as appropriate without any mark up. The Landlord must give the Tenant reasonable time to object or find a reasonably cheaper quote. 7.5.2 Unless the Schedule states otherwise, the Tenant is responsible for maintaining the interior of the Premises, including any walls, sanitary facilities, kitchen facilities, and air conditioning units, and unless the Schedule states otherwise, radiators and heating facilities. The Landlord acknowledges that throughout the Term and any extension thereof, the Premises may become damaged through ordinary wear and tear and will not claim against the Tenant for this.
7.5.3 If the Schedule so clearly indicates, Tenant shall pay the Landlord a Security Deposit prior to the Start Date in the amount set out in the Schedule, or if no amount is stated, then the equivalent of one months Rent. This Security Deposit shall remain the property of the Tenant, and shall be held in an interest-bearing account of the Landlord and may not be used for his own purposes or be pledged to or held by any lender or creditor, and shall be used only to compensate the Landlord for breaches of clause 7.3.3, or this clause 7.5, or for the Tenants failure to pay Rent or utilities. After any permitted deductions, the Security Deposit shall be returned to the Tenant together with any interest accrued on the day after the End Date, or the date of a valid earlier termination of this Lease 7.5.4 The Tenant is solely responsible for security of its property and the Premises from break-ins, and may engage its own security guards. The details of any security operation and of any codes for any alarms or equivalent that it installs are confidential, and are not required to be provided to the Landlord. 7.5.5 The Tenant agrees to permit the Landlord to inspect the Premises, but no more often than once a every 2 months and with good cause, and the Tenant agrees to grant the Landlord or his contractors access to the Premises for the purpose of maintenance on at least 14 days notice, except that the notice period may be shorter in the case of an emergency.
8. Remedies
8.1 Step-in Right If the Landlord fails to undertake any task required by this Agreement within a reasonable time or within a set period of which the Tenant notifies the Landlord (whichever is the shorter), then the Tenant may carry out the task and charge the costs back to the Landlord by way of deduction from the Rent due, or by exercising any other right of set-off against the Landlord. The Landlord may not object to the costs incurred by the Tenant in doing so, provided that they are not excessive, and that the Tenant produces tax receipts or invoices for any purchases. The Tenant may not mark up or make any profit on such costs. The step-in right extends to, but is not limited to, obtaining relevant municipality permits, paying utilities, or carrying out any repairs. 8.2 Termination 8.2.1 Either Party may terminate the Agreement on written notice to the other in the event of: a. The insolvency of the other Party, or the filing and granting by the court of any bankruptcy petition against the Party, or if the other Party is unable to pay its debts or a creditor seeks enforcement acts against the other Party; b. Material breach of this Agreement by the other Party, or a series of cumulative smaller breaches that, taken together, are material. In the case of a remediable breach, the Party not in default shall give the defaulting Party written notice of the breach and it shall have seven (7) days (or such longer period stated in the notice) to remedy the breach, failing which this Agreement can be terminated. A Party may terminate immediately for an irremediable material breach. Breach of Clauses 5 (regarding warranties) or 6 (regarding duties) by the Landlord shall be considered material breaches, which entitle the Tenant to terminate this Agreement immediately, except where the Landlords maintenance failure is a minor one.
If a Tenant has not paid rent that is due under this Agreement for more than two rent periods, then the Landlord may terminate on at least 7 days written notice. Issues that are fully, specifically and properly disclosed against the warranties in the Lease are not breaches. 8.2.2 The Tenant may also terminate this Agreement without penalty on at least seven (7) days written notice for lack of access or usability of the Premises, in whole or in part, for their intended purpose set out in the Schedule during the lease term, including as a result of a force majeure such as a flood, fire, earthquake or wind (save where any of the foregoing were the result of the Tenants own breaches). 8.3 Damages Either Party may, in addition to or in the alternative, seek damages from the other for any breaches by the other of whatever nature under this Agreement. Each Party shall also indemnify the other for any costs, claims or expenses that the Party must pay third parties as a result of the breach of this Lease by the indemnifying Party. Parties under this Agreement shall be liable for direct losses, which include those described in the previous paragraph and the cost of the Tenant finding alternative accommodation or undertaking repairs. Neither Party shall, however, be liable for consequential or economic loss suffered by the other Party, such as lost trading profits or losses of third-party contracts.
9. Disputes and Applicable Law

9.1 This Agreement shall be subject to Kosovo law. 9.2 In the event of a dispute under this Agreement, either Party may serve a written notice on the other Party, referring the dispute to mediation under the auspices of the Alternative Dispute Resolution Centre at the American Chamber of Commerce in Kosovo or the Permanent Arbitration Tribunal at the Kosovo Chamber of Commerce in Kosovo (as indicated in the Schedule). The dispute is referred in accordance with the then-applicable Kosovo Mediation Rules used by such Chamber. 9.3 If the dispute is not resolved within thirty (30) days of such notice of referral to mediation being served, then the parties shall resolve any dispute or claim relating to the Contract, including as to its termination or validity, by arbitration under the auspices of the Alternative Disputes Resolution Centre at the American Chamber of Commerce in Kosovo or the Permanent Arbitration Tribunal at the Kosovo Chamber of Commerce in Kosovo (as indicated in the Schedule) in accordance with the then applicable Kosovo Arbitration Rules used by such Chamber. Unless otherwise stated in the Schedule, the arbitration shall be in Prishtina in the language of this contract, and there shall be a sole arbitrator.
10. General
10.1 This Lease is executed in the following language [ ]. The version in this language only shall be definitive for the purposes of interpretation. Any translations into another language are for informational purposes only. 10.2 Notices under this Lease must be in writing, and sent to a Party using the details in the Schedule or any replacement details notified in writing. Notices may be sent by email to the other Party if an email address is given in the Schedule, provided that a read receipt is given or some other evidence of receipt is givenfor example, if the recipient replies. If an email address is not given, then the notice must be sent by other means, such as post or by hand. Notices of breach or termination or
exercise of the Right of Extension or referral of a dispute to mediation or arbitration must be given by hand or by registered post, and may not be given solely by email. 10.3 In the event of a conflict between the language or meaning of any part of the body of this Agreement and any document attached and made part of it, the language or meaning of the main body of this Agreement shall prevail. The Headings of this Agreement are for ease of reference only, and shall not have any significance in interpreting this Agreement. 10.4 The Agreement contains the full understanding of the Parties, sets out a full allocation of risk between them, and constitutes a complete and exclusive statement of the terms and conditions of their agreement concerning matters referred to in the Agreement. All prior negotiations, dealings, understandings, and oral or written agreements regarding the Lease of the Premises are now superseded by this Agreement. 10.5 Where there is more than one Landlord, e.g. co-ownership, the Landlords shall be jointly and severally liable for compliance with or breaches of this Agreement. 10.6 Neither party may assign this Agreement without the others consent, such consent not to be unreasonably withheld or delayed. This clause shall not, however, prevent a Landlord from pledging the receivables of the Rent to a creditor. 10.7 No agreement purporting to amend, modify, vary, explain or supplement the terms or conditions of the Agreement shall be binding on the Parties, unless and until it is made in writing and signed by both Parties. 10.8 The waiver by either Party of a breach or default of the Agreement, the waiver of a right or remedy under the Agreement, and any usage of trade or course of dealing or performance, shall not constitute a continuing waiver of any other breach or default, or a waiver of other rights or remedies or other terms of the Agreement, unless and until the waiver is expressed in writing and signed by both Parties. 10.9 No third parties shall have any or enforce any rights under this Agreement without the consent of the Parties. 10.10 If any provision of the Agreement is held by the arbitrator to be illegal, invalid or unenforceable, the remaining provisions shall remain in full force and effect. 10.11 If the law in the future requires that this Agreement is verified in a court or otherwise notarized or translated into a specific language, including to perfect any registration, then the Parties agree to take all such steps to ensure this occurs, bearing the costs equally unless the registration is clearly to the benefit of one party, such as for a loan by that party. This shall also be done on request of one of the Parties. Landlord Signature Tenant Signature: .
Name: _________________________ (Printed) Date: _________________________
Name:_________________________ (Printed) Date: _________________________
USERS GUIDE TO THE STANDARD FORM FOR COMMERCIAL LEASE CONTRACTS

The users guide to the Standard Form Contract for Commercial Leaes provides explanations to each clause and sub-section of each clause included in this forms General Terms and Conditions section. The users guide also includes references to Kosovos Property and Tax laws, when applicable. Explanations and references are intended to provide users with guidance to interpreting clauses in the General Terms and Conditions section. Because contractual relationships differ, General Terms and Conditions attached to the Standard Form Contract should be tailored to specific Landlord/Tenant requirements. Neither the Standard Form nor the users guide or legal commentary replace advice and counsel of a qualified attorney specializing in drafting commercial leases. Recitals A. The Landlord owns certain land and building(s) with the Cadastral Details noted in the Schedule. B. The Tenant wishes to lease from the Landlord, and the Landlord wishes to lease to the Tenant, the Premises described in the Schedule pursuant to the terms and conditions in this Agreement or Lease. The Recitals set out the background to the Contract. They cross-reference details in the Schedule, most importantly the description of the Premises within the Schedule. Ideally, a Plan should be attached that delineates and explains the exact physical scope of the Premises.
1. Special Pre-Conditions
1.1 The Landlord agrees to carry out the works/renovations/adjustments described in the Schedule on or before the Start Date or the date specified in the Schedule. 1.2 The Party/Parties described in the Schedule agree to provide the document(s) described in the Schedule on or before the Start Date, or the date specified in the Schedule. 1.3 If indicated in the Schedule, the Tenant agrees to pay the Security Deposit on or before the Start Date. 1.4 If a Special Pre-Condition(s) is not met by the Landlord, the Tenant may either terminate this Lease immediately on written notice to the Landlord, without penalty or charge, or the Tenant may charge the Landlord a penalty as set out in the Schedule for each day that the Landlord is late in complying. 1.5 If a Special Pre-Condition is not met by the Tenant, then the Landlord may terminate this Lease on written notice to the Tenant before the Start Date, without penalty or charge. Pre-Conditions are items that need to be met or completed before the Lease begins and/or occupation starts. Pre-Conditions give the Parties certainty about applicable terms, and simultaneously the Parties have various things which they need to do before the Agreement moves to the next stage, which is the actual beginning of the Lease. The kind of things that might need to be done are: - Further work or repairs to the Premises by the Landlord, including separate utility meters - Furnishing by the Landlord - Provision of a deposit or documents, such as references by the Tenant - Additional municipal consents
- Documents from the Landlord, such as evidence of paid utility bills If these Pre-Conditions are not met by the deadline set in the Schedule, the relevant Party can terminate the Agreement. On the other hand, the Party may proceed by deciding that it does not need the pre-condition met, or that it can be met after the Lease begins. For example, refurbishment might occur after the Tenant has moved in. Clause 1.4 recognizes that the Tenant is in a difficult position, and might prefer to move in, but ensure that the Landlord does what he has promised by allowing the Tenant to charge a penalty for the un-renovated property. The amount of this penalty should be set out in the Schedule.
2. Premises
2.1 The Landlord hereby leases to the Tenant, and the Tenant hereby leases from the Landlord, the Premises described in the Schedule, together with the right to use any of the Landlords items/furniture listed in the Schedule. 2.2 The Premises include the car parking space(s) and any yard or outside space described in the Schedule, and unless stated otherwise in the Schedule, any appurtenances and the outside walls and roof where relevant. Here, the Premises are described in detail to avoid later disputes over its boundaries. As previously noted, a Plan should ideally be attached to the Lease that clearly delineates which physical areas are part of the Lease, and which are not. The extent of the Premises is critical to issues such as repair liabilities, the ability to use outside walls for advertising, outside space for parking, and the installation of generators.
3. Term, Extensions and Early Termination

3.1 Term Subject to other terms in this Lease, the Term of the Lease shall be the period that commences on the Start Date in the Schedule, and expires on the End Date in the Schedule. 3.2 Extension 3.2.1 If the Schedule indicates that the Tenant has a Right to Extend, then the Tenant may extend the Term of the Lease once for the Extension Period set out in the Schedule, or if no period is so indicated, for the same period as the initial Lease. If the Tenant wishes to exercise its Right to Extend, it must give the Landlord at least sixty (60) days written notice prior to the initial End Date, stating the Tenants wish to extend. 3.2.2 If the Tenant exercises this Right to Extend the Term, all terms and conditions of the Lease shall remain as provided herein. This Clause almost entirely benefits the Tenant. Landlords may choose to delete this Clause, or the Parties might also agree to modify it. For example, they might decide that if the lease is extended, then the rent shall increase in line with inflation rates as published by the Central Bank. 3.3 Early Termination Unless the Schedule indicates otherwise, the Tenant may, in its sole and absolute discretion, during the Term terminate this Lease at any time before the End Date, or the end of any Extension period, without penalty by giving prior written notice to the Landlord of the Tenants intention to
terminate. The Tenant must give the prior written notice to the Landlord at least sixty (60) days, or any other notice period indicated in the Schedule, before the intended termination date. This Clause gives the Tenant a right to terminate during the term on at least sixty (60) days notice. The Landlord might want to change this Clause by deleting the right to early termination, or increasing the sixty (60) day requirement to, for example, ninety (90) or one hundred eighty (180) days. The Clause could also be amended to give the Landlord the right to terminate the Lease during the term, but this would be quite harsh on the Tenant, who would face uncertainty. To minimize this uncertainty, the Landlord might maintain a right to early termination, but on ninety (90) days or one hundred eighty (180) days notice.
4. Rent and Payment

4.1 The Tenant shall pay the Landlord the Rent set out in the Schedule during the Term, and any extension. In addition to the Rent, the Landlord may charge VAT if required by law, provided that the Landlord provides a copy of his VAT certificate and a valid VAT invoice to the Tenant. Under Article 28.2.2.5 of the VAT Law L-146 -3, the letting of immoveable property for commercial purposes with the exclusion of land is something for which VAT must be charged if the Landlords business turnover (which might include other activities) exceeds the VAT threshold within a 12 month period. However, some subjects, such as embassies, are exempted from this requirement. The VAT threshold is currently Euro 50,000. 4.2 The Landlord will, if requested by the Tenant, provide the Tenant with a valid tax invoice for the Rent and any VAT. The invoice shall include the Landlords full name, fiscal number, VAT number (if relevant), date and rent period, and shall itemize the VAT separately. Although there is no common practice of issuing invoices for rent payments in Kosovo, and the Tax Authority does not currently routinely require such invoices, there is also no apparent exemption for rent in the VAT Law; therefore to be cautious, the Tenant should reserve the right to require such invoices. 4.3 The Tenant shall pay the Rent to the Landlord by making payment into the Landlords bank account that is noted in the Schedule, or into any replacement bank account in the Landlords name that the Landlord notifies the Tenant of in writing at least seven (7) days prior to the due date for the Rent. Payment into a bank account is good practice, and in the case of payments over Euro 500, these payments are only deductible as tax expenses under the Law on Tax Administration if paid via a bank account. 4.4 The Rent shall be paid as set out in the Schedule, for example, monthly, quarterly or yearly. For example, if a Tenant agrees to pay six (6) months rent in advance, then this advance payment can be explained by a note in the Schedule. 4.5 The Rent shall be paid on the Payment Date for the Rent set out in the Schedule, except for the first payment, which must be made the day after the Leases signing. If the date this Leases signing is not the Payment Date for the Rent, then the amount of rent due after signature but before the next agreed-to Payment Date shall be pro-rated to the next Payment Date. All payments shall be made in Euros.
The Parties can agree on a regular rent payment date that suits them both, and insert this date into the Schedule. There is no reason why rent payments cannot be made weekly if the Parties agree. The Schedule would need to be changed to reflect weekly payments, though. 4.6 If this Lease is validly terminated before the End Date or the end of an Extension Period, then the Rent shall be paid on a pro-rated basis up to, and including, the date on which the Lease terminates. All advance payments of Rent shall be refunded by the Landlord in the amount that corresponds to the period of time after the termination date that the Tenant has given valid written notice. 4.7 If the Tenant is late paying the Rent by more than three (3) days, then the Landlord may by invoice charge the Tenant interest on the late payment from the date of late payment until actual payment at the average Kosovo bank overdraft rate set out in the most recent Central Bank of Kosovo publication prior to the date the Rent was due. As of 1 September 2011, this rate was about 12% per annum. The rate can be found at www.bqkkos.org/. For example, if a Tenant failed to pay his quarterly rent of 1,000 Euro on 1 September 2011, then the interest due on 31 December 2011 would be 12% of the late payment. Applying the applicable rate, determined by dividing by 365 (days) x 1000 Euro = 0.3287 per day * (30+31+30+31), i.e. 1212days = Euro 40.1 total interest due. 4.8 The Rent indicated in the Schedule is the gross Rent, unless otherwise stated. The Tenant shall deduct any tax withholding required by law from the Rent on behalf of the Landlord, and the Tenant shall provide an annual tax withholding certificate to the Landlord, as required by law. Tax withholdings are not deducted from the VAT element. Section 27 of Corporation Tax Law L03/113 requires business Tenants that are legal persons, e.g LLCs, JSCs, or partnerships, to withhold 10% of the Rent payable to the Landlord, and pay this as tax on behalf of the Landlord to the Kosovo Tax Authority. If the income or corporation tax rates change, this amount may change.
5. Landlords Warranties and Indemnities

If the Landlord is in breach of or wishes to make a disclosure under any of these warranties at or prior to the Leases execution, and the Tenant agrees to accept that breach or disclosed breach and not claim for the breach, this will be stated in the Schedule. The section below contains various warranties from the Landlord. It is possible that the Landlord will not be able to fulfill all noted requirements, and may instead note any issues relating to the warranties (as opposed to amending the warranties wording). The effect of the Landlords noting or disclosing an issue is to prevent the Tenant from suing and claiming damages under the warranty, because the Tenant has become aware of, and decided to accept, the disclosure. 5.1 Ownership The Landlord warrants that: 5.1.1 It is the sole and lawful owner (or, in the case of formerly socially-owned property, owner of a 99-year lease) of the Premises, and that the Landlord is duly authorized and able to enter into this Lease and perform the obligations set out in this Lease;
5.1.2 It owns and has all rights to use and enjoy the Premises (including any land underneath the Premises), and is the valid registered owner (either of full title or a 99-year lease) in the relevant Kosovo cadastre; These warranties are typical of commercial leases in most countries, but are more important in formerly-socialist or post-conflict countries in which property disputes are common. Tenants who do not verify the correct owner may have to leave the Premises. While these Clauses would allow the Tenant to leave the Premises if the Landlord is later determined to not be the owner, the Tenant may have invested substantial sums in the Property, with moving being entirely disruptive to the Tenants business. Obviously, avoiding this situation is ideal. Therefore, potential Tenants should check the Landlords ownership position prior to signing the Lease by researching recent official cadastral ownership documents. If a Landlord is unable to present these, then the Tenant should rightly be cautious about signing the Lease. Its important to remember that, in Kosovo, land can be owned separately from a building, so cadastral documents need to be checked for both land and building ownership. If doubts exist as to ownership, an experienced property lawyer should be contacted. Properties acquired through privatization will usually be owned by a 99-year lease, which aside from the 99-year length, conveys the same rights and responsibilities that accompany land-ownership (i.e. the property can be mortgaged, sold, etc). In such a case, there is no head-lessor from whom to request permission to lease the property. 5.1.3 It will provide the Tenant with an up-to-date, stamped possession list/certificate of ownership from the cadastre for the Premises on the Tenants request, and on the condition that the Tenant pays the cadastral fees for obtaining this document. This document may be requested by the Tenant not more often than once every six (6) months. The Tenants businesses may need this document to apply to the business registry, or for other municipal or business permits, and therefore need to ensure within the Lease that they can obtain this document. 5.2 Vacant Possession and Undisturbed Use The Landlord warrants that: 5.2.1 The Tenant may peaceably enjoy vacant possession of the Premises throughout the Term, and will be able to use the Premises for the Purpose of Use described in the Schedule for the Term (and any extensions thereof) without any interruption or disturbance from Landlord, or any other person claiming by, from, through, or under the Landlord, or acting as agent of the Landlord, and without the Landlord occupying the Premises, whether via its or others belongings, rubbish or waste; It is general practice in commercial leases for the Landlord to give the Tenant full rights to occupy the Premises, without interruption. The Landlord should not enter the Premises, or store his belongings there. As commercial leasing is a more recent practice in Kosovo, we have made this obligation express. Again, most laws give the Tenant an implied right of quiet enjoyment, which means that the Tenant should not be interrupted in any way. This Clause makes this right an express right. 5.2.2 It knows of no likely disturbance from neighbors, and that none of the activity of the neighbors is likely to disturb the intended Purpose of Use described in the Schedule by the Tenant.
If the Landlord is aware that his neighbors are noisy or likely to disturb the Tenant with works, etc., the Landlord should make a disclosure, in writing. 5.3 Authority to Enter into Lease The Landlord warrants that: 5.3.1 It has full right, power, and authority, under applicable laws, rules, and regulations in effect in Kosovo and the municipality where the Premises are situated, to execute and deliver this Lease, and perform all of the Landlords obligations in the Agreement during the Term of the Lease, including any extensions to the Term; and 5.3.2 Its execution of this Lease and the exercise of the rights and obligations by the Landlord under this Agreement do not constitute, and will not result in, any breach of any other agreement that the Landlord has entered into. If the Landlord is not actually the owner of the property (or the owner of the 99-year social property lease), he would need to disclose that fact and amend Clause 5.1 to explain that the Lease is a sublease. However, the Landlord may need to obtain permission to sub-lease the Premises from the headlessor, as most head-lessors do not permit sub-leasing. This Clause seeks to protect the Tenant who needs to be sure that it will not be removed because the Landlord was not truly in a position to lease the Premises. Similarly, if the mortgage holder prohibits leasing or requires the mortgagors consent to the Lease, then this Clause puts the obligation on the Landlord to make sure that consent is obtained. Again, potential Tenants should check the mortgages terms, as the bank can potentially later remove the Tenant if it decides to sell the property to enforce the mortgage. Except where enforcement is underway, or unless the rent is significantly less than the mortgage rate, most banks will not refuse a good Tenant, as they are happy for their bank client (i.e. the Landlord) to be receiving an income. 5.4 Compliance with the Law, Regulations and Lender Requirements The Landlord warrants that: 5.4.1 The Premises comply with all applicable laws, rules and regulations of all public authorities in relation to the Purpose of Use set out in the Schedule, including that the Premises meet all building regulations relating to standards and quality of build, including seismic regulations, and the Premises are safe, secure and fit for the Purpose of Use set out in the Schedule; Many Premises in Kosovo are non-compliant with building laws or regulations. The consequences of this non-compliance vary, and according to the severity of the non-compliance. The absence of a building permit puts the Premises at risk of demolition, and the Tenant at risk of eviction and ultimately business disruption (see Clause 5.4.2). Non-compliance with standard building codes, which have safety implications, may lead to an order to cease public use until the problem or safety risk is cured; this cease order could also stop the Tenant from carrying out its business. This warranty is therefore important, as it gives the Tenant power to terminate the Lease and move elsewhere if the Landlord misleads the Tenant regarding permit statues, or to require the Landlord to fix the problem. If the Premises do not comply with building regulations, the Parties need to agree to a solution, and record what should be done, in writing, within the Lease. Will the Landlord or Tenant make sure that the building is compliant, and within a set period of time, and at whose cost? Or will both Parties accept the risk, with the Tenant later deciding what to do if a problem arises? This Clause refers to the Purpose of Use, which should be described in the Schedule and reflects the Tenants intended business. For example, a Tenant may be using the Premises for retail,
restaurant, offices or industrial use. Each of these intended uses will have different requirements, and commercial use of a building requires higher permit payments and more permits than, for example, residential use. 5.4.2 The Premises have a building permit that covers the full extent of the build of the Premises, and the Premises have received the technical acceptance certificate and permit for use, and any other necessary certificates for the intended Purpose of Use, from the municipality. Further, the Premises fully comply with these and the building permit, and other certificate fees have been fully paid. Upon request, the Landlord will provide the Tenant on with a copy of the building permit, technical acceptance, and any other relevant permits, and evidence of payment of the related fees; If the Premises do not have a building permit, this Clause should be changed to oblige the Landlord to apply for and pay for the requisite permits within a specified period of time. If not, the Tenant risks disruption of the Premises use, including through demolition, by the municipality. The Tenant may also have problems with utilities being connected; and even if such utilities are connected, they might later be disconnected. Various building permits are required throughout construction efforts in Kosovo, from initial building permits to technical acceptance permits that must be obtained before the building can be added to the property register. And even if a permit exists, permit fees that remain outstanding can cause problems. A cautious Tenant should check up on the status of necessary permits and fee payments, and a conscientious Landlord will not refuse to divulge such important information. 5.4.3 There is no reason related to the Premises as to why the Tenant will not be able to obtain a business or municipal permit for the Premises that is required for the intended Purpose of Use described by the Tenant in the Schedule; The nature of the construction or the building permit obtained, such as residential as opposed to commercial, may prevent the Tenant from later applying for necessary permits to operate a building as a restaurant, education venue, for retail, or as a hotel, etc. This Clause ensures that the Landlord advises a Tenant of any reasons that would prevent it from obtaining the permits required for its operations. 5.4.4 All consents, approvals, licenses, and authorizations required of any governmental authority necessary for the Landlords execution, delivery, and performance of this Lease have been obtained, and are in full force and effect; This Clause reflects, again, the construction and permitting requirements. 5.4.5 There is no reason why a municipal permit for a generator to be installed in or near the Premises, or permits for the Tenants usual signage on the Premises consistent with the Purpose of Use by the Tenant, will not be obtained from the municipality; 5.4.6 There is no mortgage, tax lien or other lien on the Premises, other than that disclosed in writing to the Tenant, and that any mortgage holder has consented to the Lease. As described under Clause 5.3.2 above, most banks and mortgage companies may require the Landlord to obtain consent for or disclose the details of any tenancy, but will not usually refuse consent. Still, it is important for the Tenant to be aware of any mortgage, because the bank might repossess the property if the Landlord fails to keep up payments. Particularly, a Tenant would not want to enter into a Lease if possession/enforcement proceedings are current and ongoing. 5.5 Utilities and Municipality Property Tax The Landlord warrants:
5.5.1 There are no unpaid bills or debts relating to electricity, water, rubbish, district heating, telecom, internet (utilities) for the Premises, and no disputes with the utilities companies relating to the Premises; It is important to research whether there are unpaid utility bills or disputes related to the Premises, as this might make it difficult for the Tenant to obtain utilities for its business, even if the bills or debts are in the Landlords name. A conscientious Landlord should produce evidence that bills are paid. Payment should not be proven by just the last bill, but by a payment history statement, which KEK, water and district heating companies will produce. 5.5.2 The Premises has its own separate utilities connections, or there is no reason why such connections will not be obtained, and why internet or telecom or other connections will not be possible; Very often, buildings in Kosovo will have been divided. A Tenant will not usually want to share utility connections, as this will lead to disputes with other occupants over who has usage. To address this issue, this Clause ensures that there is a separate utility arrangement, or that one can be created. If utilities connections must be independent, this independence could be made a Pre-Condition of the Lease. 5.5.3 There are no unpaid municipality property tax bills, and the Landlord itself or the Landlords business has no tax or other debts that could affect the Premises. If the Landlord has unpaid municipal property tax bills, the municipality may impose a charge or lien on the Premises, and may later sell the Premises at auction to recover its debt. This would prejudice the Tenant, as its occupation would be affected (particularly if the Lease is not registered in the cadastre against the Landlords title). 5.6 Disputes Regarding Use, Ownership and Re-development The Landlord warrants: 5.6.1 It has not received (itself or via anyone else) notice of any formal or informal claims or disputes relating to the Premises, including claims of ownership or access rights by a third party; If the Landlord has received such notices, they should be described here and attached to the Lease, so that the Tenant can make a sound decision as to whether to proceed with the Lease. Because of this Clause, a Landlord should declare whether there is, for example, a claim filed at the Housing Property Commission, even if the Landlord thinks the claim is not valid or important; the Tenant can then form its own opinion. Anything disclosed by the Landlord in this way, and approved in the Lease by the Tenant, will not create a breach by the Landlord. Through this clause, the Parties can also decide who will pay any compensation in the case of a breach of this warranty, or whether the Tenant may be compensated up to a specified sum if the breach occurs. 5.6.2 It has not received any notice of expropriation or intention to redevelop from the municipality or any other public body in Kosovo, and is not aware of any intention to re-develop the Premises or locations near the Premises; This Clause addresses any notices to expropriate land to build or extend roads or other properties on or near the Premises, and ensures the Tenant that no such notices or plans are known to the Landlord.
5.6.3 It has not received any notice of non-compliance with construction permits, use permits, municipality, laws or building regulations, and no environmental notice, and is not aware of any pending proceedings or of any infringement due to any such non-compliance. This Clause partially relates to Clauses 5.4.1 and 5.4.2, but goes further in requiring that the Landlord not only confirm that he is compliant with Regulations and declare any non-compliance, but also state if he has received any notices that would reveal whether circumstances are more urgent, and therefore more risky for the Tenant.
6. Landlords Duties
6.1 Delivery of the Premises The Landlord shall cause the Premises to be vacated and deliver the Premises to Tenant in a proper state and condition for the Purpose of Use, so that the Tenant can move in by the Start Date. 6.2 Repairing and Maintaining the Premises 6.2.1 Unless other repair and maintenance arrangements are set out in detail in the Schedule, the Landlord shall be responsible at its own cost for undertaking prompt remedial repairs and preventative maintenance of the structure, so that the Premises remain fit for the Purpose of Use. The structure shall include the roof, outside walls, plumbing, and guttering, and unless the Schedule states otherwise, electrics, heating and radiators, but shall exclude any interior parts of the Business Premises that are not structural, such as interior floors, interior walls, and sanitary facilities. The Landlord shall so far as possible arrange repair and maintenance in a way that causes the minimum disruption to the Tenants business; for example, repairs and maintenance should be conducted outside of business/office hours, and the Landlord shall give the Tenant at least 14 days advance written notice of such, except in an emergency. The Parties may change this Templates maintenance arrangements on the Schedule, and place the obligation of, for example, heating or radiator maintenance on the Tenant. In some leases, particularly short-term leases, the Landlord might be willing to take on more maintenance obligations, in which case this Clause would also need to be changed via the Schedule. 6.2.2 If any plumbing or electrical repairs arise from the misuse or use of the Tenant, such as blockages caused by or via the Tenant, or if the need for repairs arises from the Tenants installations, the Landlord may charge the Tenant a reasonable amount for the costs of such repairs. The Landlord must present evidence to the Tenant of the costs, including valid tax invoices for its purchases; the Landlord may not charge any mark-up or make any profit on this activity. 6.3 Recording of Long-term Lease in Cadastre, Notification of Mortgage Holders The Landlord shall: 6.3.1 If the Tenant requests, record or register the existence of this Lease as an encumbrance against the relevant parcel number in the cadastre. The Tenant shall pay the cadastral fees for such registration; Registration of the Lease in the cadastre against the parcel number of the Property is permitted under the Law on Property. However, registration is typically only worthwhile for a long-term lease, for example, a lease for more than five (5) years, or for a very valuable lease for which rent and Tenant investment is high. The aim of the registration is to make sure that any mortgage companies, lenders or persons seizing the property are on notice of the Lease and cannot evict the Tenant.
6.3.2 Notify any lender or holder of any mortgage over the property of the existence of this Agreement and any extension of the Term and shall obtain consent from the lender or mortgage holder where appropriate to the Lease. Many modern loan agreements that have a mortgage security will require the borrower to notify the bank of the existence of a Lease, and sometimes to require the Landlord to obtain consent to lease the Premises. If the Tenant is a good Tenant and the rent is reasonable and reflects market rates (with a right to increase after a reasonable period), the bank will likely not object to the Lease. Banks may object, on the other hand, if they feel that the Premises are being rented out too cheaply or on a long, cheap lease that may make it difficult for the bank to realize its collateral in the event of a default, or which may make it difficult for a Landlord to repay the loan. 6.4 Utilities Unless the Schedule indicates that the Landlord is responsible for any relevant utilities and they are included in the Rent, the Landlord shall: 6.4.1 Ensure the relevant utilities bills for utilities required by the Tenant are transferred to the Tenants business name without delay and with zero debts, or the Landlord shall take all measures to facilitate a separate utility connection for the Tenant in the Landlords name if the Premises are part of a larger building with a single utility connection; 6.4.2 Provide the Tenant with good access to all relevant utility meters, forward to the Tenant any copies of bills or of any correspondence received from the utilities immediately and without delay, and permit the Tenant to make any necessary connections and installations, including for telephone, internet, cable TV, satellite or otherwise. This Lease assumes that the Tenant pays all utility costs based on the actual recorded usage. If the Rent is to be an inclusive price, this Clause would need to be changed. This change can be achieved, for example, by a clear note in the schedule that states the arrangement and mentions that this Clause has been changed. 6.5 Notifications of Disputes or Claims or Formal Legal Notices The Landlord shall: 6.5.1 Immediately forward to, or notify the Tenant in writing of any notices, post, claims or other issues that the Landlord receives (including notices or claims under Clause 5), or of which the Landlord becomes aware that may affect the Tenants full use of the Premises for the Purpose of Use, or the Tenants rights under this Agreement; such notices include those from public authorities or neighbors regarding developments; This Clause is designed to give the Tenant advance warning of events that might affect the Tenant financially, such as expropriation, demolition, utility disconnection, or a property ownership dispute. If the Tenant learns of these events quickly enough, it can make a decision on whether to invest in or renew the lease. 6.5.2 Promptly file notices of objection to, or enforce the rights related to, the Premises with third parties or public authorities when requested by and appropriate for the Tenant; examples include rights to access the property, or the right to object to development in the vicinity of the Premises, and the right to object to development in the vicinity of the Premises.
This Clause places an important obligation on the Landlord to minimize damage to the Tenant. It also makes clear where the obligation to respond lies, so that there is no confusion about what the Landlord should do and what the Tenant should do. 6.6 Evidence of Compliance The Tenant may at any time, and on request, immediately require the Landlord to provide evidence of compliance with any of the warranties in Clause 5, or any of the obligations in this Clause 6. As discussed, the Tenant should conduct compliance verification before the Lease is entered into. Still, this Clause gives the Tenant the right to compliance checks during the Lease, and this particularly applies to ongoing obligations, such as those in Clause 6.6. 6.7 Leasing to Competitors of the Tenant Unless the Schedule states otherwise, if the Premises form part of a larger building or group of buildings in the vicinity of the Premises, to the extent that the Landlord now or in the future owns any such buildings or part thereof in the vicinity, including next to or above or below the Premises, the Landlord agrees not to let or sub-lease any such adjacent buildings or part thereof to any other Tenant that competes in terms of business with the Tenant. This Clause is Tenant-friendly. This restrictive Clause maintains the value of the real estate lease to the Tenant, which is often dependent upon location and the resulting ability to exclusively attract customers. However, this type of clause is only generally appropriate if the Tenant is a major client of the Landlord, such as a bank or insurance company. Otherwise, a Landlord might want to delete it, as it creates quite an onerous obligation. A Tenant in a strong negotiating position might, in certain circumstances, want to expand such an anti-competition Clause to prohibit Tenants in next door blocks from advertising for competitors. For example, an insurance company might want to ensure that there is no competing sign right next to its business.
7. Tenants Warranties Rights and Responsibilities

7.1 Authority to Enter into Lease The Tenant warrants that: 7.1.1 It has full right, power, and authority under applicable laws, rules, and regulations in effect in Kosovo and the municipality in which the Premises are situated to execute and deliver this Lease, and to perform its obligations during the Term of the Lease or any extensions of the Term; and 7.1.2 Its execution of this Lease and the exercise of the rights and obligations by the Landlord under this Agreement do not constitute, and will not result in, any breach of any other agreement that the Tenant has entered into. This Clause is the corollary of the Landlords warranties, which are expressed in Clauses 5 and 6. The Landlord should not let a Tenant operate an illegal business, or without relevant consent, as it may affect the stability of the Tenants revenue stream, or result in municipality action that devalues the property.
Similarly, the Landlord should make sure that the Tenants Lease will not be struck down because the Tenant has exceeded its powers under the Lease.
7.2 Utilities, Municipality Property Tax and Insurance 7.2.1 The Tenant shall be solely responsible for and agrees to undertake the prompt payment of all charges for utilities used by the Tenant during the Term in the Premises, including telephone calls, internet, heating, lighting, fuel, electricity, rubbish collection, water and sewerage, provided such charges are separately metered or separately accounted for. This Lease assumes that the Tenant pays utilities. If an inclusive lease, in which the Landlord pays these costs, is desired, this and Clauses 6.2.1, 6.4 and 7.2.1 would need to be changed by an indication in the Schedule. 7.2.2 Unless the Schedule states that the Landlord is responsible, the Tenant shall promptly pay the municipal property tax, either by bills from the Landlord, or if the Tenant so requires, by direct bills in the Tenants own name. Under the Law on Municipality Property Tax, the owner of the Premises is liable to pay the tax, but if the owner is not easily identified, the Tenant pays. The Parties are able to change the default situation, so that the Tenant pays (or reimburses the Landlord, in addition to paying rent) by a provision within the Lease. 7.2.3 The Tenant may (but shall have no obligation to) take out any insurance in relation to its own property, the Landlords property, or the Premises. As a general rule, a person can only insure his own property. Otherwise, when an insurance claim is made, the insurer will not pay, as the claimant has not technically suffered a loss because the property belongs to another who ultimately suffers the loss. This Clause clarifies that the Tenant has no obligation to take out insurance against problems such as theft or flood damage to the property, which might damage the Tenants stock or contents. 7.3 Use of the Premises, Alterations 7.3.1 The Tenant may use the Premises only for the Purpose of Use described in the Schedule. If the Tenant wishes to change the Purpose of Use, it must obtain written consent from the Landlord, and such consent must not be unreasonably withheld or delayed. 7.3.2 Unless the Schedule or the Plan indicates otherwise, the Tenant may use the outside of the Premises, including but not limited to attaching signs on the outside of the Premises, or parking cars, generators, furniture or other items, and provided that the Tenant obtains the relevant permissions required by law. The Tenant may also apply for permits for use of the municipality or other land in the vicinity without notifying the Landlord. 7.3.3 The Tenant may make internal and limited external alterations to the Premises, unless otherwise stated in the Schedule. Internal alterations may include destroying non-load-bearing walls, or putting in flooring or a kitchen and sanitary facilities, provided that any demolition or alteration does not affect the stability of or value of the Premises, and provided that all alterations comply with building regulations and applicable law. The Tenant shall provide the Landlord with evidence of compliance when appropriate. Further, unless otherwise stated in the Schedule, the Tenant mayprovided it complies with the law and regulationsattach or install signs and air conditioning units, cables and pipes, security alarms, fire prevention equipment, heating and cooling systems, and if necessary, satellite or radio receiver equipment onto or within the Premises.
The Tenant shall, however, ensure that at the end of the Term or any extension, the Premises are returned to a similar condition (although subject to wear and tear) as existed on the Start Date of the Lease. This Clause assumes that the Tenant is in a long-term Lease. In the case of a long-term Lease, it is normal to permit a commercial Tenant to make the alterations described in the clause. However, to avoid disputes over the condition of the Premises, the Parties should jointly document a description of and photograph the state of the Premises before signing the Lease, and at the end of the Lease. The Tenant must reinstate the building to the same condition, or pay for any damages. 7.4 Sub-Leasing Unless the Schedule states otherwise, the Tenant may sub-lease all or part of the Premises by giving written notice to the Landlord with the sub-lessees details, and the details of any sub-lease arrangement. If sub-leasing is permitted and occurs, the Tenant shall still be responsible for compliance with this Lease, including both with regard to Rent payment and liability for the actions or inactions of the sub-lessee. Sub-leasing gives the Tenant more flexibility and comfort if it enters into a long-term lease, because if its circumstances change during the Lease term, it can find someone else to take on the Lease. While a Landlord may wish to prohibit sub-leasing, doing so may make the Tenant more likely to sign a shorter-term lease, leaving the Landlord at risk of periods without income between leases. 7.5 Maintenance and Security, Including Security Deposit 7.5.1 Save as foreseen in Clause 7.3.3 above, the Tenant may not destroy or damage the Premises, or any items of the Landlord that are listed in the Schedule. If the Tenant does accidentally destroy or damage the same, then it must reimburse the Landlord for the market value of such items. The Landlord must notify the Tenant with evidence of the market value of such items, and any repair costs, by providing quotes or invoices as appropriate without any mark up. The Landlord must give the Tenant reasonable time to object or find a reasonably cheaper quote. 7.5.2 Unless the Schedule states otherwise, the Tenant is responsible for maintaining the interior of the Premises, including any walls, sanitary facilities, kitchen facilities, and air conditioning units, and unless the Schedule states otherwise, radiators and heating facilities. The Landlord acknowledges that throughout the Term and any extension thereof, the Premises may become damaged through ordinary wear and tear and will not claim against the Tenant for this. 7.5.3 If the Schedule so clearly indicates, Tenant shall pay the Landlord a Security Deposit prior to the Start Date in the amount set out in the Schedule, or if no amount is stated, then the equivalent of one months Rent. This Security Deposit shall remain the property of the Tenant, and shall be held in an interest-bearing account of the Landlord and may not be used for his own purposes or be pledged to or held by any lender or creditor, and shall be used only to compensate the Landlord for breaches of clause 7.3.3, or this clause 7.5, or for the Tenants failure to pay Rent or utilities. After any permitted deductions, the Security Deposit shall be returned to the Tenant together with any interest accrued on the day after the End Date, or the date of a valid earlier termination of this Lease. Security deposits are uncommon in Kosovo. In other countries, they are more frequent, as Landlords wish to protect their property from damage. However, there is a risk that a Landlord will not return the deposit, or will spend it during the Term. This risk could be reduced by the Tenant off-setting the last months rent against the deposit. Obviously, it is in the Landlords, and not the Tenants, i nterest to have such a deposit. Another option would be to have a bank guarantee, which could be cashed in by the Landlord, but bank charges for maintaining the guarantee would accrue.
7.5.4 The Tenant is solely responsible for security of its property and the Premises from break-ins, and may engage its own security guards. The details of any security operation and of any codes for any alarms or equivalent that it installs are confidential, and are not required to be provided to the Landlord. 7.5.5 The Tenant agrees to permit the Landlord to inspect the Premises, but no more often than once a every 2 months and with good cause, and the Tenant agrees to grant the Landlord or his contractors access to the Premises for the purpose of maintenance on at least 14 days notice, except that the notice period may be shorter in the case of an emergency.
8. Remedies
8.1 Step-in Right If the Landlord fails to undertake any task required by this Agreement within a reasonable time or within a set period of which the Tenant notifies the Landlord (whichever is the shorter), then the Tenant may carry out the task and charge the costs back to the Landlord by way of deduction from the Rent due, or by exercising any other right of set-off against the Landlord. The Landlord may not object to the costs incurred by the Tenant in doing so, provided that they are not excessive, and that the Tenant produces tax receipts or invoices for any purchases. The Tenant may not mark up or make any profit on such costs. This step-in right extends to, but is not limited to, obtaining relevant municipality permits, paying utilities, or carrying out any repairs. This powerful but practical Clause ensures that a Tenant does not suffer irrecoverable loss from the Landlords delay in making repairs. 8.2 Termination 8.2.1 Either Party may terminate the Agreement on written notice to the other in the event of: a. The insolvency of the other Party, or the filing and granting by the court of any bankruptcy petition against the Party, or if the other Party is unable to pay its debts or a creditor seeks enforcement acts against the other Party; Termination for insolvency is only fair; no Landlord wants to be stuck in a Lease with a Tenant that cannot pay, and no Tenant wants a Landlord that cannot make repairs, and whose bank may repossess the property. b. Material breach of this Agreement by the other Party, or a series of cumulative smaller breaches that, taken together, are material. In the case of a remediable breach, the Party not in default shall give the defaulting Party written notice of the breach and it shall have 7 days (or such longer period stated in the notice) to remedy the breach, failing which this Agreement can be terminated. A Party may terminate immediately for an irremediable material breach. Breach of Clauses 5 (regarding warranties) or 6 (regarding duties) by the Landlord shall be considered material breaches, which entitle the Tenant to terminate this Agreement immediately, except where the Landlords maintenance failure is a minor one.
If a Tenant has not paid rent that is due under this Agreement for more than two rent periods, then the Landlord may terminate on at least 7 days written notice. Issues that are fully, specifically and properly disclosed against the warranties in the Lease are not breaches. This Clause distinguishes between specified material breaches for which the Tenant can terminate the Lease immediately (Clauses 5 and 6 regarding ownership rights, for example), irremediable material breaches that also justify immediate termination, and other less-material breaches that only entitle termination if they are both material and not remedied. Although a Tenant has the right to terminate the Lease for the Landlords breach, a Landlord particularly needs to be able to terminate the Lease for non-payment of rent. This need exists because even if late-payment interest accrues, there is a risk that the Tenant will become insolvent, and that the Landlord will not be able to enforce the rent claim. This clause provides for two (2) rental periods, but the length of the rental periods can be altered by the Parties by drafting a specified Euro amount, or a longer or shorter period. 8.2.2 The Tenant may also terminate this Agreement without penalty on at least seven (7) days written notice for lack of access or usability of the Premises, in whole or in part, for their intended purpose set out in the Schedule during the lease term, including as a result of a force majeure such as a flood, fire, earthquake or wind (save where any of the foregoing were the result of the Tenants own breaches). The Landlord should be aware of this Clause, and may wish to verify that any insurance it has for such events covers the resulting loss of rent. 8.3 Damages Either Party may, in addition to or in the alternative, seek damages from the other for any breaches by the other of whatever nature under this Agreement. Each Party shall also indemnify the other for any costs, claims or expenses that the Party must pay third parties as a result of the breach of this Lease by the indemnifying Party. Parties under this Agreement shall be liable for direct losses, which include those described in the previous paragraph and the cost of the Tenant finding alternative accommodation or undertaking repairs. Neither Party shall, however, be liable for consequential or economic loss suffered by the other Party, such as lost trading profits or losses of third-party contracts. The exclusion of liability for consequential or economic loss means that if, for example, the Tenant cannot use the Premises for his shop because of faulty electrical wiring installed by the Landlord, then the Tenant cannot claim the loss of his trading profits from the Landlord. It is typical to exclude this kind of loss to keep liability manageable.
9. Disputes and Applicable Law

9.1 This Agreement shall be subject to Kosovo law. 9.2 In the event of a dispute under this Agreement, either Party may serve a written notice on the other Party referring the dispute to mediation under the auspices of the Alternative Dispute Resolution Centre at the American Chamber of Commerce in Kosovo or the Permanent Arbitration Tribunal at the Kosovo Chamber of Commerce (as indicated in the Schedule), in accordance with the then-applicable Kosovo Mediation Rules used by such Chamber or another recognized mediation body in Kosovo that is registered with the Kosovo Mediation Commission, and licensed by the Ministry of Justice in Kosovo.
Mediation is a non-binding procedure for resolving disputes in a structured setting with an intermediary, and without the formality and procedure of a court. Mediation is recognised in Kosovo via the Kosovo Mediation Law (No.03/L-057). Mediation is private, as members of the public have no right to attend. It is common to use an independent mediation organization to facilitate the mediation. Currently in Kosovo, there are two Associations that provide commercial mediationKosovo Chamber of Commerce and the American Chamber of Commerce Alternative Dispute Resolution Association (http://kosovo-arbitration.com / http://adr-ks.org ). Additional Mediation Centers are located in several cities in Kosovo. Ideally, one of the mediation providers should be chosen and documented within the Schedule, so that there is no confusion as to which body will supervise the mediation. If the choice is not documented, there is a risk that the mediation will not be administered by an institution. This may increase delays and create confusion. It is a matter of the parties personal preference which of the mediation providers they wish to choose. Regardless of whether the mediation is administered by an institution or ad hoc, which means that it will have no governing structure, the mediator must be registered with the Kosovo Mediation Commission and licensed by the Ministry of Justice in Kosovo. Normally, the procedure would be conducted by one mediator. Although there is a short period for mediation specified (thirty (30) days, see the Clause below), in practice this mediation period can be extended by mutual agreement of the parties (up to a maximum of ninety (90) days from the date the mediation commences, as set forth in the Kosovo Mediation Law) if the mediation is going well. Therefore, it is advisable to have a shorter period to avoid delays in commencing arbitration where it is clear, for example, that the issue is the inability or refusal to pay rent without cause.
9.3 If the dispute is not resolved within thirty (30) days of such notice of referral to mediation being served, then the parties shall resolve any dispute or claim relating to the Contract, including as to its termination or validity, by arbitration under the auspices of the Alternative Disputes Resolution Centre at the American Chamber of Commerce in Kosovo or the Permanent Arbitration Tribunal at the Kosovo Chamber of Commerce in Kosovo (as indicated in the Schedule) in accordance with the then applicable Kosovo Arbitration Rules used by such Chamber.
Arbitration is an alternative to court. It is recognized as a dispute settlement option in Kosovo under the 2007 Arbitration Law No. 02/L-75. Due to delays in Kosovos courts and the availability of multiple appeal mechanisms, arbitration is currently faster, more flexible, and better-suited for resolving commercial disputes. Arbitration is private, as members of the public have no right to attend. Currently, there are two bodies in Kosovo that provide arbitration servicesKosovo Chamber of Commerce and American Chamber of Commerce Alternative Dispute Resolution Centre (http://kosovo-arbitration.com / http://adr-ks.org ). Ideally, one of the arbitration bodies should be chosen and named within in the Schedule, so that there is no confusion as to which body will supervise the arbitration. It is a matter of the Parties personal preference which of the two Chambers they wish to choose. If the choice is not documented within the Schedule, there is a risk that the arbitration will be an ad hoc arbitration, which means that it will have no governing structure. A lack of structure may increase delays and create confusion leading up to and during the arbitration. Unless otherwise stated in the Schedule, the arbitration shall be in Prishtina in the language of this contract, and there shall be a sole arbitrator. While it is possible to have three arbitrators, three arbitrators would be very expensive and not appropriate for a relatively simple lease agreement. Three arbitrators would be more appropriate for large, very complex agreements or transactions.
10. General
10.1 This Lease is executed in the following language [ ]. The version in this language only shall be definitive for the purposes of interpretation. Any translations into another language are for informational purposes only. 10.2 Notices under this Lease must be in writing, and sent to a Party using the details in the Schedule or any replacement details notified in writing. Notices may be sent by email to the other Party if an email address is given in the Schedule, provided that a read receipt is given or some other evidence of receipt is givenfor example, if the recipient replies. If an email address is not given, then the notice must be sent by other means, such as post or by hand. Notices of breach or termination or exercise of the Right of Extension or referral of a dispute to mediation or arbitration must be given by hand or by registered post, and may not be given solely by email. 10.3 In the event of a conflict between the language or meaning of any part of the body of this Agreement and any document attached and made part of it, the language or meaning of the main body of this Agreement shall prevail. The Headings of this Agreement are for ease of reference only, and shall not have any significance in interpreting this Agreement. 10.4 The Agreement contains the full understanding of the Parties, sets out a full allocation of risk between them, and constitutes a complete and exclusive statement of the terms and conditions of their agreement concerning matters referred to in the Agreement. All prior negotiations, dealings, understandings, and oral or written agreements regarding the Lease of the Premises are now superseded by this Agreement. 10.5 Where there is more than one Landlord, e.g. co-ownership, the Landlords shall be jointly and severally liable for compliance with or breaches of this Agreement. This may be the case where two siblings in a family own the land, for example. 10.6 Neither party may assign this Agreement without the others consent, such consent not to be unreasonably withheld or delayed. This Clause shall not, however, prevent a Landlord from pledging the receivables of the Rent to a creditor. A prohibition on assignment, such as that mentioned in the above Clause, usually relates to creditworthiness and reliability. Sometimes the prohibition is modified to allow for assignment to a company that is connected to the Tenant, although assignments can be designated as to be decided on a case-by-case basis (because Landlords are usually tolerant, as they wish to facilitate lease renewal). The final sentence of this Clause clarifies that a Landlord can make an arrangement with its lender, such as a bank, that the proceeds of the rent are used as collateral for a loan. 10.7 No agreement purporting to amend, modify, vary, explain or supplement the terms or conditions of the Agreement shall be binding on the Parties, unless and until it is made in writing and signed by both Parties. 10.8 The waiver by either Party of a breach or default of the Agreement, the waiver of a right or remedy under the Agreement, and any usage of trade or course of dealing or performance, shall not constitute a continuing waiver of any other breach or default, or a waiver of other rights or remedies or other terms of the Agreement, unless and until the waiver is expressed in writing and signed by both Parties.
10.9 No third parties shall have any or enforce any rights under this Agreement without the consent of the Parties. This Clause prevents, for example, a neighbor or a lender from benefitting from and enforcing this agreement against one of the Parties. 10.10 If any provision of the Agreement is held by the arbitrator to be illegal, invalid or unenforceable, the remaining provisions shall remain in full force and effect. 10.11 If the law in the future requires that this Agreement is verified in a court or otherwise notarized or translated into a specific language, including to perfect any registration, then the Parties agree to take all such steps to ensure this occurs, bearing the costs equally unless the registration is clearly to the benefit of one party, such as for a loan by that party. This shall also be done on request of one of the Parties. This Clause links in part with Clause 6.3.1, which refers to the ability to register a lease in the property register as an encumbrance. It is possible that the property register authorities (the cadastre) might require the lease to be in a specific language, or to be court-verified or notarized, before registration. These translation/verification costs would normally be shared by both Parties, unless a Party is specifically registering in order to gain the benefit of a loan, or if there is no clear mutual benefit in the registration.
GENERAL GUIDELINES TO THE STANDARD FORM COMMERCIAL LEASE CONTRACT

Below are some general guidelines on the using the commercial lease form. They are not intended to be a fully comprehensive explanation of Kosovos property laws, or other law or issues related to the contract, but rather a summary of key and common legal issues affecting the agreement. Circumstances may vary, the law may change, and legal advice should be obtained legal in a specific cases. Also, there are specific provisions or issues that are not mentioned below. In particular, if a lease will be entered for five (5) years or more, the user might find it appropriate to make quite a few changes to this formfor example, by adding a rental escalation clause, and changing the repair obligations. For this, the user should engage a lawyer and property specialist.
The Concept of a Lease

The concept of a lease existed in the former Yugoslavia and continues today. The most recent property law that recognizes the concept of a lease is the Law on Property and Other Real Rights (2009/03-L-154). Articles 10.2.4 and 109 of that Law recognize the concept of a leasehold, but there are no detailed rules on how a lease is created, or on what it must include. A lease agreement is therefore purely a matter of contract, i.e. a matter what the Landlord and Tenant agree to, and where no agreement has been expressly made, custom and practice guide, but only to an extent. Because a lease agreement is almost purely a contractual matter under Kosovo law, when deciding a dispute, a court or arbitrator will therefore first look to what the parties have agreed to in writing. This makes it important to have a clear, explicit lease agreement, as there is no clear standard law on property leases law to guide a court or arbitrator if the parties do not specify something. However, there are a few exceptions to this lack of guidance, such as the Law on Municipal Property Tax 03-L204. This law makes the Landlord liable for property tax payments, and specifies that the Tenant will be liable only if the Landlord cannot be found. For more details on the Tax, see http://tatimineprone-rks.org/. In any case, a detailed written lease agreement is critical, and can protect both the Landlord and the Tenant.
Formal Requirements for Lease Signature

Current Kosovo law does not require a lease agreement to be signed in front of a court or notary. For their own protection, the parties might choose to do so for a long-term or expensive lease. Due Diligence Before Tenants Sign a Long-term Lease For a business, the cost of renting a property may be one of the biggest long-term investments that the business makes. Finding, moving into, and renovating property is expensive. If customers rely on where the property is, and if a Tenant must move because of a dispute or problems with the property, business losses can be suffered, which will not be recoverable under the law. Therefore, businesses should spend quality time verifying that any Landlord really is the legitimate owner or lessor of the property, and that other problems that would cause a Tenants business to suffer do not exist. The Tenant must ask questions for example, can utilities be legitimately connected? Is the property legal, so that additional permits needed for business operation are available? Is the property about to be expropriated or demolished for public projects?
It is not enough to rely on a lease agreement alone. Proper advance due diligence and verification is critical. Below are key issues that should be ensured before entering into a commercial lease agreement, but the safest route is to contact a lawyer to check the propertys registration documents, and to check with utility companies.
Tracing Property Ownership

Kosovo has a long history of changing property laws from the 1980s onwards. Kosovo recognizes the right to own private property. From the 1990s, laws have provided for the privatization of real property that was formerly the property of social enterprises or the State. The history of the changing rules on privatization is highly complex and beyond the scope of this document. Regardless, due to the complexity of privatization, as well as the complexity of property ownership laws, an informal property regime that operated in the 1990s means that property ownership many times is disputed in Kosovo. Property ownership rights are recorded in the national register or cadastre. The national register or cadastre is theoretically public, but in practice, it is not possible for any member of the public to obtain details on property in Kosovo. The owner of any property sought, usually the Landlord, should be able to obtain these records and provide a potential Tenant with an up-to-date property document, stamped and signed by the Kosovo Cadastre Authority. Checks should be conducted to determine if the property is the subject of a dispute at the Kosovo Property Agency. Claims are listed online at http://www.kpaonline.org. Unfortunately, there is no easy way to check for disputes in the courts, so there is always the risk that a Tenant must move out if a court rules against the Landlord. The standard form commercial lease does include some warranties on the Landlord, but the warranties are not a replacement for conducting as many preventative checks regarding the status of a premises as possible.
Lack of Permits
The relevant construction laws in Kosovo, both newer laws and those inherited from Yugoslav times, require that an initial permit be obtained from a municipality before any building or construction is built in it, and that the building or construction be built in accordance with construction standards and subject to a technical permit. Obtaining a permit is a slow and time-consuming process, and fees must be paid at various stages on both flat fee and square meter bases. Many buildings have been constructed in Kosovo without the requisite initial permit, or without a technical permit. Fees might not have been paid in full. The consequences of these circumstances vary. In worst cases, the building might be demolished, or the municipality or utilities may refuse connections or levy additional charges on the occupant. The municipality can also put a pledge on the property and sell it to recover its costs. The exact situation varies from one building and municipality to the other, and depends upon the severity of the breach. It is therefore essential that permit statuses be verified before a Tenant moves in, and that the verification of any breaches should be pre-determined between the parties. This standard form commercial lease seeks to give the Tenant some financial rights against the Landlord for breaches if these breaches are not disclosed before the agreement is made. Still, there is always the risk that the Landlord will not reimburse the Tenant, and that the practical consequences suffered by the Tenants business are not compensated for. Checks and verifications by the Tenant before moving in are preferable to avoid detrimental surprises.
Unpaid Utility Bills

Historically, many individuals and businesses in Kosovo have debts with utility companies. Although these debts legally belong to a particular individual or business, the utility companies may enforce the debt by refusing to re-connect or by disconnect power to a building, and this may cause the innocent Tenant unnecessary losses of time and blackouts. For this reason, a cautious Tenant would check that there are no unpaid utility bills related to the premises before signing the lease, or ensure that they are paid before moving in. If for some reason the bills are still not paid by the time the Tenant moves in, and if this causes practical problems for the Tenant, this standard form lease ultimately permits the Tenant to pay the bills on the Landlords behalf and deduct the amounts from rent due (however, this will be of insufficient comfort if the debts are greater than the amount owed for rent, so prior checks are preferable).
Checks on a Tenant
A Landlord should undertake checks on his Tenant. The most important check is a financial one. What is the financial status of the Tenant? Unfortunately, Kosovos credit registry only records loan defaults, and not other defaults.
Lease Duration and Early Termination

There is no standard rule on how long a lease may be it can be as short as a few weeks, or for 10 years or more. The duration of the lease is usually reflected in repair obligations, and the right of the Tenant to alter the premises. The longer the lease, the more usual it is that the Tenant is allowed to make alterations to the premises, and might be responsible for internal repairs. The extent of such obligations is ultimately dependant upon negotiation and pricing. With a long-term lease, or a lease during which the Tenant makes substantial investments in the premises, the Tenant may want to register the lease in the cadastre as an encumbrance, so that the Tenant cannot be evicted by a new purchaser or lending bank. Although such registration is unusual in Kosovo, it is permitted by the law. This form provides for the right to register, and the parties must decide who will pay the costs of registration, or whether it will be shared (as this form provides). It is important to carefully study and agree when each party can terminate a lease. A Tenant may want some security of tenure so as to know it can make investments and recover the loss. In return for this it may also agree on its side not to terminate early (except in the case of Landlord breach) so very often the termination rights are limited equally on both sides. Ultimately it is a question of negotiation and bargaining power. If a lease is for a longer period, the Landlord may want to include a rent escalation clause a provision that provides for rent increases in line with market rates (which would require a valuer to be appointed), or inflation. Such clauses are quite complex and beyond the scope of this lease template, which is designed to accommodate a short-term lease of six (6) months to one (1) or two (2) years.
Rental Payments
The Tenants primary obligation is to pay the rent on time. It is up to the parties to determine when the rental payments must be madewhether on a monthly, weekly or yearly basis, and on which dates. According to the Law on Income Tax, a legal entity (a company or NGO) that pays rent must withhold the Landlords tax, and pay it over to the tax authority by the end of the following month.
The legal entity must also provide an annual certificate to the Landlord confirming that it has done this. As is explained in the footnotes, rent is best paid via the bank for tax deduction purposes, and to avoid disputes as to whether it has actually been paid or not.
Late Payment
A Landlord should be compensated for late payment. The template provides that the rate for late payment compensation is the cost of capital to the Landlord, which the template provides as the standard overdraft lending rate in Kosovo. This is in accordance with the proposed late payment rates of the new Law on Obligations in Kosovo.
Repairs
Obligations to repair are also something the parties need to come to precise agreement on to avoid disputes. Standard practice varies depending upon the duration of the lease, and it is typical to distinguish between internal decorative repairs (usually an obligation of the Tenant on a long-term lease) and external or structural repairs, which are usually the Landlords obligation. It is necessary to precisely define which repairs are internal and external/structural; the parties should check their draft clause and also their plan. For a long-term lease, the Landlord may want to include clauses requiring more stringent decoration obligations, such as a duty to paint the outside every four (4) years, and the inside every three (3) years.

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Table of Contents

STANDARD FORM CONTRACT FOR COMMERCIAL LEASES

PARTIES: 1. Landlord(s): 2. Tenant(s):

ID number or business registration number:

ID number or business registration number:

Cadastral Details 2.1 Cadastral zone/municipality:

Premises 2.1 Address:

Describe area leased: 2.1 Number of floors:

Parking space(s)? 2.2 Describe space(s):

Outside walls included?

Start Date of the Lease, or other agreed date:

Tenant has Right to Extend?

Is Tenant able to terminate the Lease early?

Length of notice for early termination

Frequency of Rent Payments Due:

Monthly / Quarterly / Yearly

Date Rent is Due: Landlords Bank Name:

Landlords Account Number:

Any disclosures by Landlord

Amount of Security Deposit, in Euros:

Utilities and Municipal Tax

6.4 and 7.2

Does the Rent include the cost of all utilities?

Does the Tenant have a right to put signage on the building?

State any changes to the Clause that addresses leasing to competitors:

Kosovo Chamber of Commerce

Mediation/Arbitration Institution that will be used in case of dispute:

or American Chamber of Commerce in Kosovo

(2) GENERAL TERMS AND CONDITIONS RECITALS

3. Term, Extensions and Early Termination

4. Rent and Payment

5. Landlords Warranties and Indemnities

7. Tenants Warranties, Rights and Responsibilities

9. Disputes and Applicable Law

Name: _________________________ (Printed) Date: _________________________

Name:_________________________ (Printed) Date: _________________________

USERS GUIDE TO THE STANDARD FORM FOR COMMERCIAL LEASE CONTRACTS

3. Term, Extensions and Early Termination

4. Rent and Payment

5. Landlords Warranties and Indemnities

7. Tenants Warranties Rights and Responsibilities

9. Disputes and Applicable Law

GENERAL GUIDELINES TO THE STANDARD FORM COMMERCIAL LEASE CONTRACT

The Concept of a Lease

Formal Requirements for Lease Signature

Tracing Property Ownership

Unpaid Utility Bills

Lease Duration and Early Termination

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