Land Lease Agreement
A land lease is an arrangement under which one party (the lessor) agrees to transfer a specified land parcel to another party (the lessee) for a fee, for temporary possession and use, according to the purpose and terms set out in the lease agreement. The lessee agrees to pay the land lease fee specified in the contract.
The subject of a land lease agreement may be a parcel of public or private land (or part thereof), formed according to land planning documents and registered in the public register in accordance with the laws of the Republic of Lithuania.
Land Lease
The land lease agreement must be in writing. The agreement becomes effective against third parties only after it has been registered in the public register, following legal procedures (in Lithuania). A plan of the leased land parcel must be attached to the lease agreement, and in the case of a lease for up to three years, a schematic map suffices. These documents are an integral part of the lease.
Private Land Lessor
The lessor of private land is the landowner. In the Republic of Lithuania, state land lease agreements can be concluded by a county governor, municipal authority, or other institution fulfilling state land administration functions. Land co-owned by several people may be leased only with the written consent of all co-owners. The lessee may be a natural or legal person from Lithuania or from another country.
The lease fee for private land is determined by agreement between the lessor and the lessee. For state land leased without auction, the lease fee is set according to legal regulations in Lithuania.
The lessee of the land, with the written consent of the lessor
With the written consent of the lessor, the lessee may sublease the land under the conditions specified in the lease agreement. Agricultural land cannot be subleased for purposes different from those set out in the agreement.
Upon Lease Termination
At the end of the lease term or upon early termination, the owner compensates the lessee for buildings or structures, if their construction was foreseen in the lease. If the buildings remain the property of the lessee, the lessee may be granted a land servitude right if this was foreseen in the agreement or a separate written deal. If buildings were constructed without permission or not foreseen in the lease, the lessee must demolish them and restore the land parcel. If they fail to do so, the lessor may do this at the lessee’s expense or may acquire the structures as their own property, provided they meet spatial planning requirements and are legalized under Lithuanian law.
A land lease agreement ends when:
- The lease term expires;
- The lessee dies and no heirs assume rights and obligations, or there are no heirs;
- The lessee (a legal entity) is liquidated;
- The leased land is sold, gifted, or otherwise transferred to the lessee;
- The land is taken for public use (in Lithuania);
- When the land lease agreement is terminated before the term at the request of the lessor (the lessee uses the land not according to the contract or its main designated purpose; if the lessee fails to pay the rent for more than three months after the due date specified in the lease agreement);
- When the land lease agreement is terminated before the term at the request of the lessee (for agricultural land – by notifying the lessor at least three months in advance; for land of other purposes – at least two months in advance);
- By mutual agreement of the parties.
Summary
Where a land lease has expired and other persons apply to lease the land on the same terms as the former lessee, the former lessee of the land in question has the right of first refusal to conclude a new land lease, provided that it has fulfilled its obligations under the land lease in good order.