(Judgment of the Supreme Court of the Czech Republic, Case No. 26 Cdo 331/2025, dated 6 November 2025)
On 31 July 2018, the claimants (subtenants) concluded an agreement for the sublease of an apartment with the defendant (the tenant). The subtenants undertook to pay monthly sublease rent in the amount of CZK 12,000 and, in addition, an advance payment for services connected with the use of the apartment in the amount of CZK 5,000 (increased as of 1 August 2020 to CZK 5,200). The paid advances were to be settled each year according to actual consumption. The tenant included in the settlement of services and monthly charges also items which, under Act No. 67/2013 Coll., governing certain matters related to the provision of payments connected with the use of apartments and non-residential premises in a building with apartments, as amended, do not have the character of services connected with the use of the apartment. Specifically, these were payments into the so-called repair fund and rent for the operation of the building and the cooperative (hereinafter “payments arising from membership in a housing cooperative”). The tenant did not carry out an individual settlement, but only forwarded to the subtenants the statements that were sent to him by the housing cooperative. The subtenants paid these amounts, but repeatedly stated that they considered the payment of charges arising from membership in a housing cooperative to be contradictory. The sublease relationship ended by the claimants’ notice of termination.
The claimants filed an action with the district court and sought reimbursement of amounts they had paid beyond the scope of actual consumption of services. They considered these amounts to be unjust enrichment of the defendant, because they were payments that he, as a member of the cooperative, should have paid himself. The defendant argued that, when concluding the contract, he agreed with the claimants that they would pay all amounts prescribed by the cooperative, i.e. also the payments arising from membership in the housing cooperative (this was also confirmed by a representative of the real estate agency that brokered the sublease). The court of first instance agreed with the claimants’ assertions, upheld the action, and ordered the defendant to pay the claimants the amounts that the claimants had paid for services beyond actual consumption and which it considered to be unjust enrichment. In its decision-making, the court relied primarily on the literal wording of the sublease agreement, in which these payments were described as billable advances for services.
The appellate court upheld the judgment of the court of first instance in full. The appellate court nevertheless admitted that, in the case of a sublease agreement, the parties may agree that payments into the repair fund and the costs of the cooperative’s administration will be paid by the subtenant. However, such payments must be agreed as part of the sublease rent, not as billable advances for services, because they do not have the character of services within the meaning of the law. The appellate court rejected the defendant’s argument that this was established practice between the parties, because the claimants repeatedly sought an explanation of the settlements and stated in relation to the payments that they considered them to be contradictory.
An appeal on points of law was filed with the Supreme Court. The Supreme Court emphasized that:
- every legal act is subject to interpretation;
- the interpretation of any legal act is decisive for its content, not for its designation;
- a legal act must be interpreted according to the intent of the acting party, which had to be or should have been known to the addressee, at the time when the expression of intent was made; and
- in a sublease relationship, unlike in a lease relationship, broad contractual freedom applies.
The Supreme Court therefore criticised the lower courts for relying only on the formal designation of the items in the contract, without attempting to interpret the parties’ true intent at the time the sublease contract was concluded. Nothing prevents the parties from agreeing that the subtenant will also pay the payments arising from membership in the housing cooperative. The fact that the parties incorrectly labelled some of the agreed payments in the contract and included them among the services does not mean that the arrangement is invalid. If the subtenants agreed to pay them, such an arrangement must be regarded as valid.
Legal Update 01/2026 here.