Preferential rent for non-residential properties

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The Józsefváros Municipality believes that it is important to provide a home to many organizations in our district to enrich the community's cultural life. To make this happen, the district's municipal council has amended the rules of preferential rent for non-residential properties.

How can you lease a property for preferential rent from the Józsefváros Municipality?

Preferential rent is only available for the premises designated for that purpose. The Committee of Property Ownership, Property Management, and Public Land Use (from here on Committee of Property Ownership). The right to lease a property for preferential rent can only be obtained through a public application procedure.

Is it possible to receive preferential rent outside of the application procedure?

No.

Who can apply for preferential rent?

We have found it necessary to expand the range of applicants. Application for preferential rent is open to

  1. a) every natural person, private entrepreneur or transparent organization as described in Point 1 of Paragraph 1 of Section 3 of Act CXCVI of 2011 on National Assets that has been registered and operating for at least 1 year.
  2. b) anyone who, in their own field of expertise, engages in activities related to municipal tasks and objectives that benefit the district, enhancing the cultural life and community and contributing to the development of Józsefváros.

What are activities related to municipal tasks and objectives?

The scope of beneficial activities is diverse, which includes:

- preventive health care, promotion of healthy lifestyles

- social work activities, charitable activities (helping disadvantaged people)

- child welfare services and benefits

- education and public upbringing,

- training and skills development,

- cultural activities, community cultural activities,

- artistic activities

- sport, youth affairs,

- nationality/ethnic minority matters,

- activities to promote equal opportunities,

- activities related to the elderly

How much is the preferential rent?

The rate of the preferential rent equals the amount of common expenses paid for the premises. In the case of a building owned exclusively by the municipality, the rate equals the operating cost, based proportionally on  the square meter of the premises. In practice, the tenant pays the amount of the common expenses twice, once as common expenses and second as rent.

What other costs does an organization or person have to pay in addition to preferential rent?

- In addition to the rent, the organization must pay utility charges and special service fees, including common expenses. In the case of municipally owned buildings, there is an operating cost.

– Before signing the contract, the tenant has to pay a security deposit equal to the gross rent, which will be refunded in case of the termination of the contract – if no amount has been deducted.

- The tenant must make a unilateral declaration of commitment before a notary, which is also charged to the tenant. The notarial deed is enforceable, therefore, if the tenant does not pay the rent, the Józsefváros Management Company Ltd. (JGK Zrt.) can terminate the contract before a notary and initiate enforcement (payment of money and evacuation) directly on the basis of this termination.

- The organization has to pay value added tax (27%) after rent and common expenses, regardless of whether or not the organization is obligated to pay VAT.

Who decides about preferential rent?

After the application process is closed, the  Committee of Property Ownership decides on the outcome of the tender and property rental, based on the proposal of the  Committee of Culture, Citizenship, Education, Nationalities, Sport and Equal Opportunities. A cooperation agreement with the municipality will also be concluded.

What are the contents of the cooperation agreement?

The cooperation agreement stipulates that the winning applicant has to feature the municipality as a sponsor on their website and in their press appearances. They also have to send notifications or invites electronically to the municipality about their public events. They are to continue carrying out their activities at the premises as indicated in the plan of activities, to submit an annual report for the preceding year as well as an annual plan of activities for the current year until March 31 of each year.

What happens if the municipality does not accept the report or the plan of activities?

If the Committee of Culture, Citizenship, Education, Nationalities, Sport and Equal Opportunities does not accept the organization's report, the Committee of Property Ownership can make either of two decisions:

  • withdraw preferential rent and set a rate without discount,
  • terminate the lease.

Can an organization or person get preferential rent in exchange for renovating the premises?

No.

Is the lease agreement fixed or indefinite?

The lease agreement is fixed for 5 years, which can be extended.

Which properties can be leased with preferential rent?

Every month, the municipality announces the premises available for preferential rent on its website under “Pályázatok”: https://jozsefvaros.hu/otthon/hirdetotabla/palyazatok/helyisegek/

Where can you get more help and information?

If you would like to lease a municipal non-residential property for an organization carrying out activities in line with the above municipal tasks and objectives, please, get in touch with the Premises Management Office of Józsefváros Management Company Ltd. (JGK Zrt.). You can find their contact details here: http://jgk.hu/193-helyiseggazdalkodasi-iroda

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