· Written by the AxiRent team
What the law allows
A lease may provide that the rent is recalculated, but no more than once a year (art. 6.583(6)). The clause has to be agreed in advance: if the lease says nothing about recalculation, the rent can change only if both sides agree.
Clauses that let the landlord recalculate the rent unilaterally, or demand a recalculation, before 12 months have passed since signing or more than once a year, are void (art. 6.583(6)).
What to put in an index clause
The clearest link is to a public figure neither side can move: the annual change in the consumer price index (CPI). The clause should state five things.
- The figure: the latest annual CPI change published by the State Data Agency of Lithuania.
- When: once a year, for example on the day the lease was signed, and the first time no earlier than after 12 months.
- How: the new rent equals the current rent multiplied by (1 + the change).
- Notice: in writing and in advance, for example 30 days before, with the figure and where it comes from.
- Whether the rent goes down if the index falls.
How to work out the new rent
New rent = current rent × (1 + annual CPI change / 100). For example, with rent of €600 and an annual change of 4.0%, the new rent would be 600 × 1.04 = €624.
The latest annual CPI change is published by the State Data Agency on its official statistics portal, and the price change can also be checked in the Bank of Lithuania's calculator. In the notice, say which month's figure you used.
How to tell the tenant
Write to the tenant by email, or through a system that shows the message arrived: the old rent, the figure and its source, the new rent and the month it starts. The clearer the calculation, the fewer the disputes.
What if the tenant does not agree?
In a dispute, the tenant may pay the rent into a deposit account (art. 6.583(7)). A fixed-term lease runs until its term ends, and then the tenant must move out at the landlord's demand (art. 6.613).
An open-ended lease on commercial terms can be ended by the landlord with six months' written notice (art. 6.614(1)), so the two sides can agree a new lease at a new rent instead.
How AxiRent does this
AxiRent reviews the rent once a year, by a fixed percentage or by the consumer price index. Thirty days before the lease's anniversary the new rent waits for your approval, and the tenant gets a letter with the amount and the date. More on long-term rentals.
Sources
- Civil Code of the Republic of Lithuania: articles 6.583, 6.613 and 6.614 (e-tar.lt, current version, in Lithuanian)
- State Data Agency of Lithuania, official statistics portal
- Bank of Lithuania, price change calculator
This is general information, not legal advice. For a specific dispute, talk to a lawyer. The official text of the Civil Code is in Lithuanian.