Leasing is considered a popular procedure, which involves the transfer of property to third parties for temporary use. To do this, a formal contract is compiled between the two parties. If its validity exceeds one year, then it is subject to state registration. Often, a completely free rental is offered at which the user does not pay any funds. The contract may be made in respect of various property represented by real estate, cars or equipment at all.
The concept of rent without payment
Gratuitous rental is considered a great way to legally work in any room or use a car without payment. Most often it is used between relatives or good friends, but often a contract is drawn up even between companies.
Directly in the Civil Code there is no information about what rent is without payment. Under the contract, certain property is transferred for use to other persons without receiving material benefits. The parties to the transaction are the owner of the object and the temporary user, represented by a private person or organization.
Agreement Objects
Gratuitous rent can be used when transferring different property for use. Most often, the process is performed on the following objects:
- Real estate objects. They can be residential or non-residential. For the use of the premises, the tenant does not transfer rent payments to the owner, but at the same time he is obliged to carry out repairs, pay utility bills, as well as maintain the rooms.
- Royalty-free rental equipment. It is used by large companies that need different units for work. Large companies can act as landlords, and often the tenant is obliged to buy equipment in the future.
- Royalty free car rental. Usually a contract is concluded between individuals who are relatives or close friends. Through the use of such a document, any citizen can use the machine of another person for different purposes. Although he does not have to pay rent, he still has certain obligations. He should be engaged in the repair, purchase of insurance and car maintenance.
An agreement may be drawn up between individuals and different companies.
Types of transactions
You can draw up such a contract in relation to different property. Participants may have different statuses, so the following types of transactions are distinguished:
- Between individuals. The subject of such an agreement is usually residential premises. On the basis of the contract, an apartment or a house is provided for free temporary use. An employment contract is drawn up between people, and due to the lack of income, the lessor can avoid the need to pay taxes. Often, according to the documents, the rent is absent, but in fact it is monthly transferred to the owner of the property.
- Between citizens and companies. Typically, such a contract is formed when renting non-residential premises intended for doing business, for which citizens open IP. A transaction is drawn up using official drafting of a contract.
- Between firms. This includes not only legal entities, but even individual entrepreneurs. Usually offered free rental of non-residential premises. Since there is no payment information in the text of the document, firms can avoid transferring significant taxes to the budget.
Under such contracts, the owner of the property does not receive material benefits. If a gratuitous contract is drawn up, but the text contains information about monthly payments, then after verification tax officials can hold the company or citizen liable.
Can a rental be free?
Based on Art. 606 CC lease agreement assumes that the owner of the property transfers it to another party to the transaction for temporary use. The owner of the premises is the landlord, and the tenant acts as the recipient of the property. The features of such a transaction include:
- no payments are allowed, therefore the landlord does not receive any profit from such cooperation;
- allowed to prescribe the possibility of redemption of property;
- parties to the agreement can independently decide what the amount of payment will be, as well as what will be the settlement procedure;
- if there is no payment, then such an agreement is classified as a contract for the gratuitous use of certain property;
- Based on the clauses of the agreement, it is required that the tenant return the property in the same condition, but taking into account normal depreciation.
If, in the absence of payments, a lease agreement is drawn up, and not a gratuitous use, this does not constitute any violation of the law. Although many lawyers claim that such a design relationship is illiterate.
Features of the agreement
Most often, such contracts are drawn up in relation to various real estate objects. Office rent can be offered at no cost between contractors.
The nuances of drafting such an agreement include:
- directly in the text indicates the gratuitous nature of cooperation;
- the rules must be entered on the basis of which various conflict situations will be resolved in the future when they arise for various reasons;
- especially much attention is paid to the description of the subject of the transaction, which can be represented by real estate, automobiles, equipment or other elements;
- the term of the contract is indicated, since if this information is not available, it is considered that the agreement is signed for a year;
- if the validity period exceeds 1 year, then the contract is registered in Rosreestr.
The parties should independently consider what other important information is entered into the contract. The grounds on which the lease will be terminated at no cost are invariably given.
What information is included?
If the two parties use free rent of property, it is important to correctly draw up a direct contract. Numerous essential conditions are necessarily included in it. These include:
- general information about the parties presented by their name, passport data, registration addresses and contact information;
- if the participants are companies, then their details, PSRN, legal addresses and other data are given;
- the subject of the contract is certainly described in detail, therefore, if the premises are transferred for gratuitous use, its address, area and purpose are indicated, as well as details of the title documents that the lessor must have;
- rights and obligations arising from each party to the agreement, and if they are violated, this will lead to early termination of the contract;
- the main responsibilities of the tenant include maintenance of the premises, payment of utilities, as well as other activities;
- responsibility of the participants, since if any unforeseen situations arise that lead to damage or destruction of property, the tenant will be forced to cover losses incurred by the owner of the property;
- reasons for early termination of the contract;
- force majeure circumstances in which both parties are released from obligations by agreement;
- methods for resolving conflict situations, for example, pre-trial order can be used, or participants can immediately go to court.
Additional conditions are negotiated by both participants. A sample rental agreement can be studied below.
What are the special conditions?
Since it is planned to rent for free, the following data is additionally included in the agreement:
- the lack of payment for the use of the premises is an important condition of the contract, therefore, it is directly indicated in the text that the agreement is gratuitous;
- a validity period is prescribed, which can vary from a few days to 49 years, but only on condition that the period does not exceed 12 months, it is allowed not to register the document with Rosreestr;
- the purpose of using the property received, and if the office is leased, it is indicated that the premises can be used only for organizing the work of office employees, and not for the production or opening of a store;
- the rules for repair and payment of utilities are taken into account, since all these costs must be borne by the direct user of the premises.
If major repairs are required, then the owner’s funds are used for this.
What documents are required?
Even if the premises are transferred for free rent, it is necessary to correctly execute the transaction. For this, the following documentation is prepared:
- title documents, on the basis of which the right of ownership passed to the lessor, and they can be presented by a contract of sale, gift certificate or inheritance certificate;
- passports of both parties to the transaction;
- if one of the parties is represented by the company, then constituent documentation, a certificate of registration and registration, as well as other documents of the company are prepared;
- if the procedure is performed by proxies, then they must have valid power of attorney, notarized.
If the term of the agreement exceeds 12 months, then it is subject to registration. To do this, both participants must come to the department of Rosreestr or MFC with a well-written document. An application is filled in and the state duty is paid, after which the necessary changes are made to the USRN.
Cancellation Policy
Directly in the text of the agreement, the main conditions are listed under which an early termination of the agreement occurs. The process is most often performed under the following conditions:
- the main clauses of the contract are violated by one participant;
- the tenant commits illegal actions leading to deterioration of the condition of real estate;
- the lessor needs property for other purposes, so he notifies the other party to the transaction about the termination of the contractual relationship;
- the term for which the contract was drawn up expires;
- a mutual decision is made by both participants;
- the tenant ceases to need a room.
If the reason is a violation of the clauses of the agreement, then the violator may be held liable. For example, if the tenant, by improper actions, caused substantial damage to the property, the owner of the property may demand compensation from him. If a citizen peacefully refuses to comply with the owner’s requirements, the dispute is resolved in court.
Tax rules
If such an agreement is drawn up between individuals, then they are not required to pay taxes, since they do not receive material profit from cooperation.
If the participants are companies, then the tenant makes a profit from the use of premises or equipment at no cost. He has unrealizable income, therefore, on the basis of Art. 250 Tax Code include such income to non-operating income. The calculation is based on the market prices of real estate in a particular region.
Who pays the tax?
In addition, property tax is required to be paid annually, moreover, under a contract this process is usually carried out by the tenant.
The receipts come in the name of the owner, after which he transfers the document for payment to the tenant. If there is no tax clause in the contract, the owner continues to pay this fee on his own.
Conclusion
The contract, on the basis of which certain property is transferred for free use to the lessee, may be drawn up between citizens or enterprises. It is important to correctly draw up this document so that it includes all the essential conditions for cooperation. Under such an agreement, real estate, cars or other equipment may be transferred for use.
If its validity exceeds one year, then such a document is subject to state registration. With the cooperation of the companies, the lessee has non-operating income from the use of property without payment.