TALLINN - Estonian Minister of Justice Raivo Aeg has sent to the government a bill seeking to amend the Law of Obligations Act and to provide more efficient ways for handling problematic tenants.
The main purpose of the bill is to foster the development of the rental market by giving parties to the lease more flexibility in shaping their relationship and by providing effective means of protecting the landlord's rights in the event of any infringement.
"In order for there to be more high-quality rental housing stock in our market, which people could weigh as an alternative to home ownership, we need to offer landlords more assurance and legal protection," Aeg said in a press release.
Fraudulent tenants and ill-intentioned debtors have been a concern, however. In order for landlords to be able to terminate a rental agreement with a problematic tenant early, regulation of cancellation due to delay in rent payment has been amended in the bill and adding a a penalty for delayed return of the rented premises will also become an option.
The bill also aims to grant landlords the right to cancel rental agreements over a payment delay of two months instead of the previous three.
Extraordinary cancellation of the contract will also become an option in the event of late payment of the deposit and of the maintenance and repair costs of the building.
One of the key amendments is allowing penalties for violation of non-monetary obligations, which must be determined in detail in the rental agreement.
It will also be stipulated that the parties may agree to a higher interest rate for late payment than the one established by law. However, a maximum interest rate will be set to protect the tenant.
The bill also aims to provide greater protection of tenants' deposit, which will be protected in the event of the landlord's enforcement or bankruptcy procedure.