Overview of retail lease agreements in Albania

Leases are regulated by the Law n. 7850, dated 29.7.1994 “Albanian Civil Code” (K.C.).

According to the K.C., lease agreements shall not be executed for a period longer than thirty years, unless otherwise provided by the law.

The landlord has the right to terminate the lease agreement at any time if:

the tenant uses the premises in a manner contrary to what was set out in the lease agreement or causes considerable damage to the premises;

the tenant does not pay due rent within the period envisaged by the lease agreement as from the date of a written notice;

the landlord, due to reasons for which he cannot be held liable, cannot use the premises in which he used to perform his activities and, therefore, intends to use the premises occupied by the tenant.

Finally, the lease agreement may be terminated (i) for reasons which the parties have determined themselves in the lease agreement and (ii) by mutual agreement between the parties.

The tenant has the right to terminate the lease agreement at any time if the landlord, within a reasonable period determined by the agreement, does not bring the premises up to the condition in which they should be handed over or maintained.

The tenant, who has properly executed the obligations envisaged in the lease agreement, has the right to be preferred to other potential tenants at the same conditions.

The rent shall be renewed as long as, upon its expiry, the tenant is granted the use of the rented property in the absence of objection from the landlord. The new rent shall be regulated under the same conditions as the previous one, however, the duration shall be determined similarly to the rents limited to a time period.

There is no eviction indemnity in case of non-renewal by the landlord, unless otherwise agreed.

There is no rent revision procedure unless otherwise agreed in the lease agreement between the parties.

There are no mandatory provisions regarding fitting-out works. The matter is left to the parties’ discretion. If during the lease agreement, the rented property needs urgent fitting-out works, the tenant must allow the fitting-out works. If the rented property is not repaired within a reasonable time, the tenant is entitled to a reduction of the rent.

The tenant is obliged to maintain the premises in the condition they were in at the beginning of the lease. However, the tenant cannot be held liable for deterioration of the state of the retail premises, devices and the equipment resulting from their regular use.

Upon termination of the lease agreement, the tenant is obliged to reinstate the premises to the condition in which they were handed over by the landlord, meaning that the tenant must reinstate all the alterations, unless otherwise agreed by the parties.

The tenant is entitled to sublease, unless the lease agreement in question specifically prohibits subleasing. The lease agreement can be transferred to a new tenant only with the landlord’s prior consent.

The lease agreement is not binding on the new owner of the premises. The new owner may terminate even a fixed term lease in accordance with the statutory notice periods unless otherwise agreed.

The tenant has no pre-emption right in the case of the sale of the premises unless otherwise agreed in the lease agreement.

There are no mandatory rules regarding the form and / or duration of a rental guarantee.

The landlord is obliged to ensure that the premises are maintained in a condition suitable for the purpose for which they were leased. Also, the landlord would be responsible for all necessary maintenance and repairs to the premises (extraordinary expenses), whilst the tenant would be responsible for small, day-to-day repair and maintenance work (ordinary expenses).

There is no VAT applicable on rent.

The rent is subject to 20% withholding tax.

There are no other important legal provisions or practices.