Lease relationships are widespread among entrepreneurs. The landlord (having "free" property, for example, land or real estate) for a fee provides the property for use by the other party - the lessee and has income from this. The tenant (the one who takes the property for rent) gets the opportunity to use other people's property for profit.
The rent for the property being leased may be set in various forms.
- Payments in a certain fixed amount, made one-time or periodically.
- In kind (in the form of a share of the products, fruits or income from their sale).
- In the form of a tenant providing pre-agreed services.
- By improving the tenant's rented property (repair, arrangement).
- The transfer by the lessee as a payment of a certain property to the property or for rent.
These methods may be combined or otherwise. In the Civil Code of the Russian Federation (Article 614), lease relations are regulated and it is indicated that the rent must be paid on time and in the form and amount that are taken into account by the lease agreement. The most common way is to make regular payments in cash.
In case of leasing of several objects, the rent can be set separately for each object or for all property as a whole. The first method is preferable if the court resolves differences arising between the parties.
Sometimes the fee may, by agreement, be set to a variable depending on monthly utility bills. But this method does not completely comply with the legislation, which states (Art. 614, clause 3) that the clause of the contract establishing a fixed fee or the mechanism for its calculation cannot be changed during the year. Thus, in order to legally introduce a variable rent, it is necessary to clearly define the mechanism for calculating it (for example, attach it to the exchange rate).
The tenant may demand a reduction in the amount of the payment, in cases of significant deterioration in the conditions of use or the condition of the leased property due to circumstances beyond its control. And also, if the lessor violates the agreed conditions for the implementation of major repairs or when concluding the contract did not warn about the rights of third parties.
If the tenant violates the terms of payment, the other party may demand an early payment, but no more than two consecutive terms.
Agricultural enterprises very often rent land plots, as well as property (buildings, equipment) from individuals who became owners of shares (property and land) during the reorganization of agriculture. Land lease, according to the presidential decree, cannot be lower than the established minimum. When renting land shares, this amount is 1.5% of the value of the plot. Payment for leased property shares must be at least 1% of the value of the property. The latter may also consist of two parts - a premium to the owner of the property and depreciation.
Calculation of the rent paid in kind is made at prices that must be agreed upon by the parties in the process of concluding the contract. In case of land lease , its size should be indexed, adjusted for inflation coefficient (unless otherwise specified in the contract). In the case of rental property, such indexation is not mandatory.
Rent is tax deductible. The costs of its payment are part of the gross and taxed on income. If the payment is made in kind, VAT is charged on it. In the case of the lease of property of an individual, the rental income is included in the taxable structure, personal income tax is withheld from it. The tax agent in this case is the lessee, and it is incumbent upon it to withhold and transfer to the budget personal income tax from rent as one of the types of income.