On rent (427-XII-son)

19.11.1991

Law of the Republic of Uzbekistan

SECTION I. GENERAL PROVISIONS

Article 1. Rent

Rent is contractual possession and use of land, other natural resources, as well as for the property which is necessary for the tenant to carry out economic activity and other activities independently.

Rent can be applied in all areas of activity in relation to property of all forms and types of property that are not prohibited by legislative acts of the Republic of Uzbekistan.

Article 2. Legislation on rent

The rental relations are regulated by this Law and other legislative acts of the Republic of Uzbekistan.

Article 3. Object of the rental relations

The objects of rental relations may be:

enterprises, individual industries, workshops, farms, other units, organizations;

individual buildings, structures, equipment, vehicles, inventory, tools, other material values;

land (agricultural land is rented only for agricultural production) and other natural resources.

Legislative acts of the Republic of Uzbekistan establish types (groups) of enterprises, organizations, types of property and natural resources, the rental of which is not allowed.

Article 4. Subjects of rental relationship

The subjects of the rent are the lessor and the lessee.

The lessor who owns the right to lease is the owner of the property or an institution authorized by him, including foreign legal entities and individuals.

Tenants can be legal entities and individuals, including joint ventures, international associations and organizations, with the participation of Soviet and foreign legal entities, as well as foreign states, international organizations.

The participation of foreign legal entities and individuals in the lease of state property is regulated by the legislation of the Republic of Uzbekistan.

Article 5. Rent agreement

The basis for the emergence of rent relations is a rent agreement, which is concluded on the basis of voluntariness and full equality of parties for a certain period. The rent of land for agricultural use, other natural resources should be long-term in nature - at least 5 years.

The rent agreement can be concluded on a competitive basis.

The rent agreement provides for:

the composition and value of property being leased, the procedure for its transfer;

rental terms;

conditions and amount of rent, terms of its payment;

the condition of the property in which the lessor must provide it to the lessee;

terms of use of the property by the tenant;

the condition and procedure for the lessee to return the property to the lessor after the termination of the agreement;

obligations of the parties to restore and repair the leased property;

conditions for further ownership of the property after its full depreciation;

conditions, procedure and terms for the redemption of leased property, if it is transferred with a subsequent redemption;

conditions, procedure and possibility of subletting leased property;

the amount of information and the timing of its presentation by the lessee to the lessor;

responsibility of the parties.

The lease of land and other natural resources also includes provisions stipulating the tenant's responsibilities for the rational use of the natural object in accordance with its intended purpose.

In the lease, the lessorʼs property objects related to the non-production sphere and their value are separately allocated, the obligations of the parties in relation to these objects (their preservation and maintenance) are indicated.

Other conditions may be included in the lease.

Article 6. Cost of leased property

The cost of state property leased is determined in accordance with the legislation of the Republic of Uzbekistan.

The cost of non-state property transferred for rent is determined by the owner.

Article 7. Transfer of property to the lessee

The lessor must lease the property to the lessee in a condition consistent with the purpose of the property or provided for by the contract.

The landlord is liable for deficiencies, including those not identified, at the conclusion of the contract of the leased property, which impede the use of it.

If the lessor has not timely transferred the leased property for use to the lessee, the lessee has the right to claim this property from him and demand compensation for the loss caused by the delay in execution, or to refuse the contract and recover losses caused to him by the non-performance of the contract.

Article 8. Subleasing of leased property

Unless otherwise stipulated by the legislation of the Republic of Uzbekistan and the lease agreement, the lessee is entitled to sublease the leased property with the lessor's permission. In this case, the lessee shall remain liable to the lessor in accordance with the agreement.

Article 81. Transfer of rights and obligations concerning lease objects (sublease)

Rights and obligations concerning the objects of lease relations may be transferred (subleased) by the lessee to another person with the consent of the lessor, except for cases provided for in the second part of this Article.

Rights and obligations concerning agricultural land plots may be transferred (subleased) by the lessee to another person only in cases stipulated by law.

If the right to real estate is transferred to another person, the rights and obligations pertaining to the lease of the land plot occupied by that object and necessary for its use shall also be transferred to the other person in accordance with the law, without requiring the lessor's consent.

Individuals and legal entities who have leased non-agricultural land plots through an electronic online auction in the manner established by law may transfer (sublease) the rights and obligations pertaining to the leased land plots to another person for a period not exceeding the term of the lease. In this case, the rights and obligations under the lease agreement shall pass to the new lessee.

Article 9. Property upon lease

Leasing property does not entail the transfer of ownership of this property.

Products manufactured using the leased property, and the income obtained from this, as well as property acquired from the profit (income) received from the leased property, belong to the lessee, unless otherwise provided by the legislation of the Republic of Uzbekistan.

The right of the lessee to construct necessary production and non-production buildings, including housing, on the leased land plot using their own and borrowed funds, while complying with the general rules of construction, must be stipulated in the agreement. At the same time, it must be noted in the lease agreement to whom these buildings and structures shall belong after the termination of the lease agreement.

Buildings and constructions that cannot be moved, built at the expense of the lessee with the permission of the lessor on the leased territory, belong to the lessor, unless otherwise provided by the agreement. Upon the expiration of the contract or upon termination, the lessee has the right to compensation of the cost by the lessor.

The buildings and structures that cannot be moved, which were built at the expense of the lessee without the permission of the lessor on the leased territory, belong to the lessor. If the landlord requires them to be demolished, the tenant must demolish them at his own expense or reimburse the costs associated with their demolition.

The property owned by the leased enterprise, on the terms and in the manner prescribed by its charter, determines the size of contributions of members of its labor collective to the creation of this property through their personal labor participation, as well as cash and other property contributions.

Securities may be issued for the value of the contribution of a member of the labor collective to the property of the leased enterprise in accordance with its charter. Dividends are paid on the indicated securities in the amounts determined by the labor collective based on the final results of production and the development tasks of the enterprise. The real value of securities is paid to holders in cases provided for by the charter of the enterprise.

The procedure and conditions for paying dividends to members of the labor collective who have terminated employment relations with the enterprise shall be stipulated in the enterprise's charter.

The distribution of profit (income) remaining at the disposal of the leased enterprise is carried out in accordance with the decision of the collective of the leased enterprise.

Article 10. Write-off of funds from tenant accounts

Money can be debited from the tenantʼs accounts at his direction or by decision of the relevant court.

Write-off of funds from the tenant's accounts in an indisputable manner is allowed only in cases stipulated by legislative acts of the Republic of Uzbekistan.

Article 11. Improvement of leased property

The lessee has the right to independently make changes in the composition of the leased property, to carry out reconstruction, expansion, technical re-equipment, increasing its value, unless otherwise provided by the contract.

If the leased property is improved with the permission of the lessor, then upon the expiration of the contract or upon termination, the lessee has the right to demand compensation for all expenses incurred for this purpose, unless otherwise provided by the lease.

Improvements made without the permission of the lessor and not separable from the leased property without causing damage to him, upon the expiration of the contract or upon termination of it shall be transferred to the lessor free of charge.

Improvements made without the permission of the lessor, if they are separable without causing damage to the leased property, the lessee may withdraw if the lessor does not agree to reimburse their value.

Article 12. Rent

The lease payment shall be determined in the lease agreement by mutual agreement of the parties, provided that the lease payment for land plots and natural resources that are in state ownership shall be determined in the manner and scope specified by the legislation of the Republic of Uzbekistan.

The rent is paid to the owner of the leased property. If state property is leased, the rent is subject to distribution in the manner prescribed by law.

The rent may be established for all leased property in aggregate or separately for each object in kind, in cash or in mixed forms. The terms and conditions of the rental payment are determined by the contract.

The amount of the lease payment may be revised at the times stipulated in the lease agreement by mutual agreement of the parties. The amount of the lease payment may also be prematurely revised at the request of one of the parties in the event of a change in prices, tariffs, and land tax rates that are established in a centralized manner, as well as in other cases provided for by the legislation of the Republic of Uzbekistan.

Article 13. Amendment of the Terms of the Lease, its Cancellation and Cessation

The amendment of the terms of the lease agreement, its cancellation, and its cessation are permitted by the mutual agreement of the parties.

At the request of one of the parties, the lease may be cancelled by decision of the relevant court in case of violation by the other party of the terms of the contract.

The agreement shall be terminated in the manner and under the conditions established by the legislation of the Republic of Uzbekistan if the lessee is recognized as legally incapacitated. In this case, one of the lessee's family members shall have a preemptive right to conclude a lease agreement. The lease agreement shall also be terminated if the lessee is sentenced for a crime in a manner that makes it impossible to continue executing the agreement.

Article 14. Renewal of a lease

If after the expiration of the contract the lessee continues to actually use the leased property and the landlord had no objection to this before the contract expires, the contract is considered renewed for the same period, unless otherwise provided by the contract.

Upon the expiration of the contract, the lessee who properly fulfilled the obligations assumed under the contract has the right to renew the contract over other persons.

Article 15. Preservation of the lease in the event of the death of the tenant

In the event of the death of a tenant, one of his heirs has the right to demand recognition of himself as a tenant on the basis and conditions of the current lease.

The lessor has the right to refuse to recognize the heir as a tenant, if the condition for the conclusion of the current lease was the personal qualities of the deceased tenant.

Article 16. Preservation of the lease upon transfer of property to another owner

When the transfer of ownership of the leased property or the rights listed in the legislation of the Republic of Uzbekistan on property from the lessor to another person, the previously concluded agreement shall remain valid in respect of the new owner, unless otherwise provided by the legislation of the Republic of Uzbekistan.

In the event of a reorganization of a legal entity that is not the owner, its obligations and rights as a lessor pass to the assignees, unless otherwise provided by the legislation of the Republic of Uzbekistan.

Article 17. Return property to landlord

Upon the cessation of the lease agreement, the lessee is obliged to timely return the property, land, and other natural resources to the lessor in the condition stipulated in the agreement.

If the tenant has admitted a deterioration in the condition of the leased property or does not return it in a timely manner, he must compensate the lessor for the losses incurred as a result.

Article 18. Redemption of leased property

The lessee may purchase the leased property in full or in part with the consent of the lessor, with the exception of agricultural lands and other natural resources. State property shall be purchased in the manner consistent with the legislation of the Republic of Uzbekistan.

Redemption of leased property is carried out at the expense of the lesseeʼs own funds, including income received from carrying out business activities under the lease, proceeds from the sale of property owned by the lessee, as well as loans and other financial assets acquired in ways that are not contrary to applicable law.

They cannot be used for the purchase of leased property from the state budget.

Legislative acts of the Republic of Uzbekistan may provide for cases when the redemption of leased property is limited or not permitted.

Article 19. Redemption contract

The relations of the parties on the purchase of property are regulated by law and the contract. The redemption contract defines:

composition and monetary (value) valuation of the purchased property;

types and sources of redemption;

procedure and terms of redemption;

participation in the redemption of third parties, in particular, creditors;

guarantees and quality of property to be purchased;

other provisions not contradicting the legislation of the Republic of Uzbekistan.

For non-fulfillment or improper fulfillment of obligations under the redemption contract, including for its unilateral change and termination, the parties bear the responsibility established by the legislation of the Republic of Uzbekistan and the redemption contract.

Disputes arising from the conclusion and execution of a redemption contract are considered by the relevant court.

SECTION II. RENT OF ENTERPRISES

Article 20. Formation of a collective of tenants

The labor collective of an enterprise or its structural units (hereinafter referred to as enterprises) are entitled to form a collective of tenants to create a rental enterprise on its basis.

The decision to form a collective of tenants and its management bodies is made by the general meeting (conference) of the labor collective by two-thirds of the votes of those present at the meeting (conference) authorized to make decisions.

Article 21. Procedure for concluding a lease agreement for an enterprise

The collective of tenants develops a draft lease agreement and sends it to the body authorized to lease the enterprise. This body is obliged to consider the draft agreement and make a decision within thirty days from the date of its receipt.

Article 22. Status of a leased enterprise

The enterprise acquires the status of a lease after signing the lease agreement, approving the charter by the general meeting (conferences). The charter of a leased enterprise (except for leased enterprises based on state ownership) should provide for property liability of members of the lease collective for the debts of the enterprise.

The organization, activity and liquidation of a leased enterprise are regulated by the Law on Enterprises in the Republic of Uzbekistan and other legislative acts of the Republic of Uzbekistan.

A leased enterprise acquires the rights of a legal entity from the day of its state registration and acceptance of the property of the enterprise in the established manner.

When a state enterprise is leased, it is reorganized in the manner prescribed by the legislation of the Republic of Uzbekistan.

The economic activity of the leased enterprise is carried out by the lessee independently. Outside of fulfillment of obligations under a lease, the tenant is completely free to manage his business activities. The intervention of the lessor in the activities of the rental enterprise, the requirements for the submission of plans, reports and other information that is not provided for by the legislation of the Republic of Uzbekistan and the contract, is not allowed.

Management of a leased enterprise is carried out in accordance with the Law of the Republic of Uzbekistan “On enterprises in the Republic of Uzbekistan” and the charter.

Article 23. Succession in the lease of enterprises

The leased enterprise becomes the successor of the property rights and obligations of the enterprise leased by it, including its rights to use land and other natural resources. In this case, the lessor may undertake to fully or partially pay off the accounts payable of the enterprise.

Obligations of a state enterprise for the sale of products (works, services) in the amounts and terms stipulated by its agreements are performed by the tenant. The lessor transfers to the lessee material resources or limits (funds) on them, and also takes other necessary measures to ensure the fulfillment of these obligations. Failure by the lessor to fulfill its obligations removes the corresponding obligations.

The leased enterprise retains the right to centralized capital investments and subsidies in the amounts established for the state enterprise leased. The property created at the expense of these funds is state property and should be included in the property being leased.

Coercion to rent excessive enterprises, objects and property for the tenant is not allowed.

Article 24. Competition for the rental of enterprises and their property complexes

Tenders for the rental of enterprises and their property complexes are announced by the owner or his authorized body, which owns the right to lease the property.

The competition may involve the labor collectives of enterprises, their structural divisions, mixed collectives, including workers not employed in this enterprise, and other legal and physical persons.

All other things being equal, their work collectives have the preemptive right to lease the enterprise or its unit.

Article 25. Lease of a state-owned enterprise in case of its reorganization or liquidation

If a state body authorized to manage state property takes a decision on the reorganization or liquidation of a state enterprise, the labor collective has the right to demand the transfer of the enterprise on lease.

Article 26. Creation of a leased enterprise on the basis of rental property of a business unit

A leased enterprise may be created on the basis of rental property of production facilities, workshops, departments, farms and other business units with the consent of the business unit, other teams, legal entities and individuals by decision of the authority authorized to lease the business.

The lease agreement is concluded with the enterprise, part of the property of which is leased.

Registration of such a rental company is carried out in accordance with applicable law.

Article 27. Intraeconomic lease contract

Enterprises have the right to lease property to employees of divisions in the form of intraeconomic contracts.

The relationship between the company and such a rental team is determined by the contract.

On-farm lease of land and other natural resources is regulated by the legislation of the Republic of Uzbekistan and the contract.

Article 28. Creation of rental enterprises on the basis of property owned by public associations and organizations

Public associations, organizations are entitled to lease their enterprises and their units on the conditions determined by these organizations and provided for by this Law.

SECTION III. RENT OF PROPERTY BY CITIZENS

Article 29. Rights of tenants in case of individual or group rental

Tenants at an individual or group lease have the rights stipulated by this Law and other legislative acts of the Republic of Uzbekistan.

Article 30. Social insurance and social security of persons engaged in labor activities on the basis of individual or group rent

Persons engaged in labor activities on an individual or group rental basis are subject to social insurance and social security on an equal basis with workers and employees.

The period of work of tenants during which insurance premiums were paid is included in the length of service.

SECTION IV. SETTLEMENT OF DISPUTES, RESPONSIBILITY OF SUBJECTS OF RENTAL RELATIONS

Article 31. Settlement of disputes

Disputes between lessees and lessors concerning the conclusion, performance and termination of lease agreements shall be resolved by the competent court in accordance with the legislation of the Republic of Uzbekistan. In this regard, mediation procedures may be applied to disputes and claims arising under agreements concluded for the lease of state assets.

Article 32. Responsibility of subjects of lease relations

Legal entities and individuals, officials of state bodies bear the responsibility established by law in the following cases:

violation of the procedure for conclusion and terms of the contract;

failure to fulfill obligations under the contract;

amendment or termination of the contract unilaterally;

Legal entities and individuals, as well as officials of state bodies, found guilty of violating the procedure and conditions for the amendment and cessation of the agreement, shall be brought to liability established by the legislation.

The legislation of the Republic of Uzbekistan may provide for liability for other violations of the rental law.

Legal entities and individuals are obliged to compensate the victim for the damage they caused, including lost profits, in the manner prescribed by the legislation of the Republic of Uzbekistan.

The tenant is liable for the debts of the rental company:

own property (for rental enterprises based on state property);

own property and personal property of members of the rental collective (for rental enterprises based on collective, private property, as well as for persons engaged in labor activity on the basis of individual or group rents), and if they are insufficient, in the manner and amount established by the legislation of the Republic of Uzbekistan.

President of the Republic of Uzbekistan I. KARIMOV

Tashkent city,

November 19, 1991,

No. 427-XII