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LAW OF THE AZERBAIJAN REPUBLIC

of April 30, 1992 No. 114

About lease

(as amended on 28-12-2018)
Article 1. Concept of lease

Lease represents the urgent paid ownership based on the agreement and use of property, the earth and other natural resources.

Article 2. Legislation on lease

The relations on lease are governed by this Law, the Civil Code and other legal acts of the Azerbaijan Republic.

The relations on lease of land are governed by the Civil Code of the Azerbaijan Republic, the Land Code of the Azerbaijan Republic, the Law of the Azerbaijan Republic "About lease of land", and also other regulatory legal acts of the Azerbaijan Republic adopted according to these the laws.

The rent relations in the Alyatsky free economic zone are governed according to requirements of the Law of the Azerbaijan Republic "About the Alyatsky free economic zone".

Article 3. Spheres and objects of lease

Lease is allowed in all industries of the national economy and can be applied to property of all forms and types of property.

Spheres and types of property which cannot be objects of the rent relations are established by the legislation of the Azerbaijan Republic.

Article 4. Lessors

The right of property leasing belongs to the owner, to lease to the bodies, the organizations and physical persons authorized by it property, and also to persons having over it other corporeal rights.

Leasing of objects of the state-owned and municipal property to legal entities and physical persons of foreign states is made only with the consent of the owner.

Article 5. Lessees

Any legal entities and physical persons can be lessees.

Article 6. Consolidation of lessees

Lessees have the right to form on a voluntary basis associations, the unions and other associations to finance their activities and to leave freely them according to charters.

Article 7. Lease agreement

1. The main document of regulating relation of the lessor with the lessee, the lease agreement is.

2. Are provided in the lease agreement: structure and cost of the leased property, the amount of the rent, lease terms, the relation to possibility of property clearance in the sublease, distribution of obligation of the Parties on complete recovery and repair of leased property to provide obligation of the lessor to the lessee property in the condition corresponding to terms of the contract obligation of the lessee to use property in accordance with the terms of the agreement, to bring the rent and to return property after termination of the contract to the lessor in the condition caused by the agreement.

3. The lease agreement can join other circumstances of the parties.

4. The property value, leased, is determined in the agreement proceeding from assessment of this property at the time of its leasing taking into account the actual depreciation.

5. According to the lease agreement, including for change and agreement cancelation unilaterally, the parties bear the responsibility established by the legislation of the Azerbaijan Republic and the agreement for non-execution or improper execution of obligations.

Article 8. Rent

1. The amount of the rent and procedure for its introduction make a reservation in the agreement. At the same time the size of lease payment is determined proceeding from cost and condition of leasable fixed assets, the prospect of development of the company and other factors, and also minimum income which shall be received from operation of leased property.

The minimum size of the hire charge of the leased state-owned property (except housing stock) is established by relevant organ of the executive authority.

The rent joins the depreciation charges from the cost of leased property if it is not provided by the lease agreement. The depreciation charges are not transferred in cases when reproduction of leased property is completely performed by the lessee, to the lessor and belong only to the lessee.

In case the state-owned property belongs to the organizations and the organizations financed from the government budget, the rent completely is transferred into the government budget, and in the organizations and the organizations performing business activity - half remains at the disposal of these organizations except for established by the law and body (organization) established by relevant organ of the executive authority of cases.

Control of receipts from transfer of the property which is in state-owned property in lease is exercised by relevant organ of the executive authority.

2. Upon transition to the rent relations of unprofitable and low-profitable enterprises obligations on unprofitability liquidation, increase in profitability, the moment of the beginning of collection of lease payments can be provided in the agreement the grant size with its progressive reducing. The lessor can provide to lessees of the unprofitable and low-profitable state enterprises privileges by the amount of the rent.

3. One of the parties can demand change of the amount of lease in case of change of the prices regulated by the state, rates, payments or depreciation rates, sharp increase in inflation rates, and also in other cases provided by legal acts of the Azerbaijan Republic.

4. The lessee has the right to require rent decrease if the conditions of use of property provided by the agreement or property condition significantly worsened in accordance with the circumstances for which the lessee does not bear responsibility.

5. In addition to the rent the lessee pays stipulated by the legislation taxes of the Azerbaijan Republic and other payments if it is not imputed in obligation to the lessor.

6. The rent by agreement of the parties can be established in the natural, cash or mixed forms.

Article 9. Property in case of lease

1. Property leasing does not attract transfer of property on this property.

2. Products and income gained by the lessee as a result of use of the leased property, and also the property acquired for the income account received from leased property is its property.

3. The buildings built at the expense of the lessee with the consent of the lessor in the leased territory and constructions which cannot be moved belong to the lessee if the agreement does not provide other. After the term of the agreement or in case of termination his lessor shall compensate to the lessee market value of these buildings and constructions.

4. The buildings built at the expense of the lessee without the consent of the lessor in the leased territory and constructions which cannot be moved belong to the lessor. If the lessor requires their demolition, the lessee shall bear them at own expense or refund the expenses connected with their demolition.

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