Lending residential units for use

The agreement may be concluded in any form for a definite and an indefinite period of time.
For a conclusion of the agreement to be effective the borrowing party must be provided with the subject matter of the lending for use, e.g. the keys to the flat.

Prior to the provision of the item the lending for use relationship is not established even if the parties concluded a written agreement.

This obligation does not exist in the case of tenancy agreements.

The distinctive feature of lending for use is its gratuitous nature. Under this type of agreement the lending party undertakes to allow the borrowing party to use the property lent to it free of charge.

This type of agreement must not impose on the borrowing party any obligations to provide the lending party or third parties with any benefits whatsoever. However, the borrowing party is obligated to bear the usual costs of maintaining the property.

These include the expenses and works associated with the ongoing use of the flat, required to keep it in a non-deteriorated condition, and without which the continued use of the flat would be impossible, e.g. service charges, maintenance costs, costs of small repairs. The costs independent of the existence of the agreement on the lending for use, i.e. the charges that the lender must pay by being the owner (e.g. taxes) cannot encumber the borrower. Otherwise it would not be an agreement on the lending for use. In the case of the costs associated with, for example, maintaining cable TV or Internet connection in the flat, the obligation to bear such costs rests on the borrower if they result from his decisions. 

The lender need not be the owner of the flat. Contrary to the lessor, the lender is under no obligation to maintain the flat in a condition required for the agreed use.

Without the lender’s consent the borrower must not provide the flat to a third party for paid or gratuitous use.

The agreement may indicate events that result in terminating the lending for use, e.g. the lending will cease each time the lender demands it. However, if the agreement does not regulate this issue, the general provisions of the civil code will apply, which state that the lending for use will cease:

• when the period for which the agreement was concluded elapses;
• In the case of an agreement concluded for an indefinite period of time:
  • If the agreement stipulates the purpose for which the borrower received the property for use, the lending ceases when the borrower uses the property for the purpose defined in the agreement or when the time during which he could have made such use of the property elapses;
  • If the agreement does not define the purpose, the lending ceases as a result of a notice of termination that may be given by either party. Since the civil code does not regulate the statutory notice periods, the date of termination should allow for the interests of both parties.