The rental price indexation cap should be sought in the contract
The high inflation rates in Latvia and across Europe have increased costs of all kinds, also affecting indexation on rent in lease contracts.
Kristine Gaigule-Saveja, WALLESS Managing Partner in Latvia, explains what a reasonable and fair application of indexation would be and how tenants can protect themselves in the event of a significant rise in inflation.
· Latvian law does not provide a protection mechanism for tenants in situations where rent indexation is applied and there is no “ceiling” on the increase. This year, rents could increase by as much as 20% if indexation is applied.
· The tenant is protected by the terms of the lease, so indexation issues and the application of mechanisms to balance them should be carefully considered during contract negotiations, for example by setting a maximum annual rent increase. The amount of the increase is also influenced by the applied indexation coefficient – the difference between the Latvian and the European one can be significant.
Full article: https://lnkd.in/eyxfeDwj
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