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Czech Republic

Green lease law and regulation in the Czech Republic

Table of contents
  1. 1. Issues regarding the building itself
    1. a. Requirements under public building law regarding energy efficiency.
    2. b. Do the regulations applicable under a) only affect new buildings or have all the buildings be provided with energy efficiency facilities?
    3. c. Does the market pay any attention to energy certificates?
    4. d. How popular is certification of buildings (LEED, BREEAM, etc.)?
  2. 2. Issues regarding the use of the building
    1. a. Can the landlord push on the operating costs (mainly for electricity, water, heating) to the tenant following consumption or does that need to be established by the lease? Is there a distinction drawn between different types of buildings (e.g. residential, office, commercial, etc.)?
    2. b. Does a landlord have the right to perform construction measures to improve the energy efficiency of a building (also against the intention of the tenant). Is there a distinction drawn between different types of buildings (e.g. residential, office, commercial etc.)?
    3. c. Does a landlord have the right to receive a reimbursement of the costs for the measures under (b)? Is there a distinction drawn between different types of buildings (e.g. residential, office, commercial, etc.)?
    4. d. If the respective rights mentioned in (b) and (c) do not exist by statute, but need to be established by the lease contract: Does a standard for such regulations exist (and what is its content)? Please give examples of typical regulations.
    5. e. Which other obligations regarding sustainability (building materials, energy efficiency, waste management etc.) exist? If they need to be imposed by the lease contract: does a standard for such regulations exist (and what is its content)? Please give examples of typical regulations.
  3. 3. Allocation of costs; incentives to improve sustainability of buildings or its use.
Czech Republic

1. Issues regarding the building itself

a. Requirements under public building law regarding energy efficiency.

Current legislation:
The Czech Republic energy efficiency legal framework is spread across several legal Acts. These give general guidance on the implementing of legislation (Decrees – in Czech vyhlášky) and numerous detailed Czech technical norms (in Czech: normy ČSN). Certain technical norms are legally binding and are therefore mandatory others however are for guidance purposes only; nevertheless they tend to be respected by the industry.

Article 156 of the Construction Code states that the materials used in construction shall be only those which guarantee energy savings and heat insulation. The implementation of the Technical Requirements on Constructions Decree expands the direction given by the Construction Code and states that construction shall be designed and constructed in a way as to minimise energy consumption.

Article 6A of the Energy Management Act implements the Energy Performance of Buildings Directive 2002 (EPBD). This Act sets out the essential requirements of the Energy Performance Certificate. In principle, the owner of the property is obliged to ensure that the energy performance of the building is met. The details are described in several Decrees and Czech technical norms. Once the requirements are met an Energy Performance Certificate is issued. This certificate is mandatory for all new buildings.

Important prospective amendments:
In 2010 the EPBD was amended by the EPBD II, this established ambitious energy saving requirements including the requirement of constructing “almost zero-energy building” by 2020. Amendments to the Energy Management Act, Decrees and Czech technical norms are being prepared to transpose the requirements set out by the EPBD II by summer 2012.

b. Do the regulations applicable under a) only affect new buildings or have all the buildings be provided with energy efficiency facilities?

Regulations applicable under a) affects only new buildings, but only in cases of obtaining the Energy Performance certificate. As of 2009, the certification is obligatory for new and for existing renovated buildings having a total floor area exceeding 1,000m2.

c. Does the market pay any attention to energy certificates?

Energy awareness is increasingly growing, nevertheless it is still rather low. There remains a relatively low number of sustainable buildings being constructed, but the market is beginning to see “green” buildings as a possible competitive advantage for the future. Public discussions regarding energy efficiency are becoming more frequent and various industry associations including the Czech Green Building Council have been established, aiming to promote sustainable constructions.

The certification has become increasingly popular. Recently the first ever office development has achieved LEED Platinum – the highest possible pre-certification, which was also used as a strong marketing tool by the developer. According to the market news the majority of newly prepared projects will be aiming to achieve LEED or BREEAM certification.

As well as LEED and BREEAM the SB Tool CZ certification method has been recently introduced by the Czech experts, having standards adapted to the specific Czech environment and norms.

2. Issues regarding the use of the building

a. Can the landlord push on the operating costs (mainly for electricity, water, heating) to the tenant following consumption or does that need to be established by the lease? Is there a distinction drawn between different types of buildings (e.g. residential, office, commercial, etc.)?

A landlord does not have to charge operating costs, but it is usual that it does under the lease contract. Under Czech laws rent and service charges must be separated. In the vast majority of services, the method of charging operating costs (and defining of what is an operating cost) is agreed in the lease contract.

There are small legal differences between the types of buildings (i.e. apartments, commercial premises and other properties), however this does not have a substantial impact on the necessity to state the method of the operating costs charge. In practice, certain residential contracts include use of some services (typically use of water and waste disposal) in the rent, while it is market standard for the tenant in commercial premises to be charged separately for all operating and service costs.

b. Does a landlord have the right to perform construction measures to improve the energy efficiency of a building (also against the intention of the tenant). Is there a distinction drawn between different types of buildings (e.g. residential, office, commercial etc.)?

Generally no, unless an unlikely situation takes place where a building is genuinely endangering safety, health and/or the environment. In such a case the construction office may order the owner to carry-out specific construction measures, which have to observe current construction requirements. In this way the energy efficiency of a building might be improved. Commercial leases usually give a right to the landlord to make improvements, but the works should not hinder the lessees’ use of the property.

c. Does a landlord have the right to receive a reimbursement of the costs for the measures under (b)? Is there a distinction drawn between different types of buildings (e.g. residential, office, commercial, etc.)?

No, there is no such legal right for reimbursement. Reimbursement will depend upon the bargaining power of the landlord and tenant as to whether any energy efficiency improvements will be reflected in the increased rent.

d. If the respective rights mentioned in (b) and (c) do not exist by statute, but need to be established by the lease contract: Does a standard for such regulations exist (and what is its content)? Please give examples of typical regulations.

There are no such regulations. If the landlord carries out energy-saving alterations, we would recommend it to attempt to renegotiate the rent.

e. Which other obligations regarding sustainability (building materials, energy efficiency, waste management etc.) exist? If they need to be imposed by the lease contract: does a standard for such regulations exist (and what is its content)? Please give examples of typical regulations.

There are no other major obligations regarding sustainability other than those outlined above.

3. Allocation of costs; incentives to improve sustainability of buildings or its use.

If the landlord wishes to share its efficiency costs with the tenant we would certainly recommend negotiating the details in the lease contract. Unless it has been previously agreed the landlord will not be able to unilaterally share these costs with the tenant.

Property owners can apply for various discretionary subsidies aimed to promote and subsidise energy savings alteration e.g. the Green Savings programme. However, at the moment the eco-subsidies are usually not targeted at commercial (but residential) buildings.