Real estate prices in Serbia continue to rise, with the cost of square meters increasing year by year. According to the Republic Geodetic Institute, apartment prices in the third quarter of 2024 saw an increase of 4.69 percent compared to the same period in 2023. This surge in property prices is also reflected in rising rental costs across Belgrade and other cities in Serbia. Industry experts attribute this increase not only to higher property prices but also to factors such as strong demand, the influx of foreign residents, limited rental supply and inflation.
With rental prices soaring, there have been reports of landlords raising rents dramatically, even overnight. This situation has highlighted the importance of having a formal lease agreement to protect tenants from sudden price hikes. But how much protection does a lease agreement actually provide and what should it include?
The need for a formal lease agreement
While many rental agreements in Serbia are still done verbally, experts recommend always having a written contract. Without a formal agreement, tenants face significant challenges in enforcing their rights. A written lease ensures that both the landlord and tenant clearly understand their rights and obligations, making disputes less likely and easier to resolve.
Current rental prices in Serbia
Rental prices across Serbia vary significantly, with Belgrade seeing the highest rates. According to the 4zida portal, the average rent for a studio apartment in Belgrade is around 300 euros, while one-bedroom apartments can go for an average of 390 euros. Rent for two-bedroom apartments in the capital averages 680 euros.
In Novi Sad, rental prices are more affordable, with studio apartments advertised for around 277 euros, one-bedroom apartments at approximately 312 euros, and two-bedroom apartments at 460 euros. Meanwhile, in Niš, you can rent a two-bedroom apartment for around 320 euros, with smaller apartments typically going for between 220 and 250 euros.
How much protection does the lease agreement provide?
A lease agreement, whether oral or written, is a consensual contract under Serbia’s Law on Obligations. In the agreement, the landlord commits to renting out the property to the tenant, who in return agrees to pay rent. While oral agreements are still common, experts, such as attorney Tatjana Simović, advise always opting for a written lease agreement. A written contract—whether notarized or not—clearly outlines the rights and obligations of both parties, offering greater protection in case of disputes.
Simović notes that a notarized lease, although not required for validity, has the added benefit of being an enforceable document. This means the landlord can more easily take legal action to evict a tenant who fails to pay rent. In the absence of a written agreement, the Law on Obligations applies, but it can be more challenging for either party to assert their rights without clear terms.
What happens if rent increases?
Simović explains that rent increases are permissible only if the lease agreement explicitly allows for them. Without such a clause, rent cannot be raised unless both the landlord and tenant mutually agree. If a tenant is bound by a written contract specifying a fixed rent, the landlord cannot increase the rent without the tenant’s consent.
In the absence of a written contract, tenants have the option to agree to a rent increase or terminate the lease unilaterally. In cases where the lease agreement is for a fixed term, it ends once that period expires. If the tenant continues occupying the property after the lease has expired and the landlord does not object, it is assumed that a new lease agreement has been formed, now on an indefinite basis, under the same conditions as the previous one.
Both landlords and tenants should be aware of the provisions within their lease agreements and the process of terminating or renewing them. A lease agreement can be terminated with notice, respecting the agreed-upon notice period.
In conclusion, as rental prices continue to rise across Serbia, having a formal lease agreement remains crucial for both landlords and tenants. It provides a clear framework for rental terms and ensures protection for both parties in case of disputes or unexpected price increases.
