Rules for Leasing and Renting of Real Estate

The Regulations shall lay down the procedure for the Latvia State Radio and Television Center on the following:

1.1. lease real estate from a private person (natural or legal person) and lease real estate to a private person;

1.2. exceptions to the procedure for leasing and renting real estate;

1.3. publish information on leased and rented real estate and real estate to be leased or rented;

1.4. certain conditions to be included in the lease and rental agreement.

PMD

- Property Management Division

LSRTC or Company

- State Joint Stock Company "Latvia State Radio and Television Centre"

Real estate

- Real estate: a parcel of land, part of a parcel of land, building, group of premises or civil engineering structure, or a part thereof, which is connected to land and cannot be moved from one place to another without being externally damaged

Lease

- Transfer of real estate owned or held by the LSRTC for use by third parties for a fixed period of time

Rent

- Acceptance of third party real estate for use in consideration for the LSRTC's core business

Lease payment

- Assessed rental or lease value of real estate

Applicant

- Third party wishing to lease LSRTC's real estate or offering to lease its real estate to LSRTC

Tenant

- Applicant who has concluded a lease agreement with LSRTC for the lease of real estate

3.1. The rules do not apply to;

3.1.1. movable property;

3.1.2. renting of residential premises;

3.1.3. short-term leases, where real estate is given and taken on a one-off basis for a maximum of ten days;

3.1.4. if the premises are rented for a period of up to one year, if the rental is necessary due to force majeure, including fire or other circumstances limiting the use of the building (structure), or the rental agreement has been terminated early and it is not possible to use other LSRTC real estate for the necessary purpose;

3.1.5. real estate for the strategic needs of the State or for the organisation of transnational events, in accordance with a decision of the Cabinet of Ministers;

3.1.6. LSRTC for the provision of services related to its core business;

3.1.7. real estate for the establishment or maintenance of a national emergency electronic communications network, as well as a secure Trans-European Telematics between Administrations (sTESTA) network;

3.1.8. for the deployment of technical equipment for parts of real estate;

3.1.9. real estate or a part thereof for the deployment or maintenance of electronic communications networks or technical equipment of national security authorities or the National Armed Forces.

3.2. The agreement on lease and rental of real estate shall be concluded in accordance with the Civil Code, the Law on Prevention of Waste of Public Funds and Property and other legislation of the Republic of Latvia and LSRTC which regulate conclusion of lease agreements and use of rights related to real estate.

4.1. The LSRTC shall send to the State Joint Stock Company "State Real Estate" for publication on its website, as well as publish on the website of the LSRTC at least the following information on real estate already leased and to be leased:

4.1.1. at least ten business days before the conclusion of the agreement, the address, cadastral number, area, purpose of use, expected duration of the agreement and the deadline for applying for the lease of the real estate in question;

4.1.2. within ten working days after the conclusion of the agreement - the address, cadastral number, area, purpose of use, tenant, amount of the rent and the term of the agreement.

4.2. Clause 4.1 of these Rules shall not apply if the LSRTC leases real estate:

4.2.1. to a public figure;

4.2.2. to a public service provider wherein the public entity's share of the fixed capital, individually or in the aggregate, exceeds 50 per cent;

4.2.3. the land is leased for the maintenance of a building (structure) on the land and owned by another person.

4.3. The LSRTC shall send to the State Joint Stock Company "State Real Estate" for publication on its website and shall publish on the website of the LSRTC at least the following information on leased and to be leased real estate:

4.3.1. at least 20 business days before the conclusion of the agreement, the desired location of the real estate, the area, the estimated amount of rent and other lease payments, the estimated duration of the agreement, the purpose of the use, technical requirements (e.g. electricity, telecommunications connection) and the application deadline;

4.3.2. within ten business days after the conclusion of the agreement - the address, cadastral number, area, purpose of use, lessor, amount of rent and duration of the agreement.

4.4. Clause 4.3 of this Regulation shall not apply if the LSRTC rents real estate:

4.4.1. from a public person;

4.4.2. land is leased for the maintenance of buildings (structures) owned by LSRTC.

4.5. In addition to Clause 4.3 of this Procedure, the following additional information may be requested from the Applicant in the advertisement for real estate to be rented:

4.5.1. a description of the real estate to be rented, including information on the technical condition of the offered real estate, accompanied by photographs, the layout of the premises and other information that may characterize the offered rent object;

4.5.2. the activities planned for the rental property during the rental period;

4.5.3. other requirements, including specific requirements for the premises (e.g. information technology, telecommunications, fire safety requirements, technical or physical security requirements), management and maintenance service requirements (management programme).

4.6. The offer shall be submitted in a sealed envelope, bearing the name of the Applicant and a reference to the notice published.

4.7. If the deadline for applications set out in the publication has expired and no Applicant has submitted an application, the LSRTC shall consider further action in the best interests of the LSRTC.

4.8. The LSRTC has the right to send the text of the advertisement also to individuals (natural or legal persons) of its choice. Their offer shall be submitted and evaluated in accordance with the procedure set out in these Rules, together with the other offers submitted by the Applicants.

5.1. The Applicant shall submit an application for the lease or rental of real estate to the LSRTC at the address specified in the publication by the closing date specified in the publication.

5.2. An Applicant wishing to rent real estate from LSRTC shall indicate in its application:

5.2.1. natural person - name, surname, personal identification number (if any), address of declared place of residence, address of actual place of residence;

5.2.2. legal entity - name, registration number and registered office;

5.2.3. the address, cadastral number and area of the real estate that the Applicant wishes to rent;

5.2.4. the purpose of the use of the real estate, the desired duration of the agreement, information on the planned repairs, their scope, costs and the planned duration of the repairs after the conclusion of the agreement (if applicable);

5.2.5. the intended rent payments;

5.2.6. the planned economic activity, if the Applicant will be granted the right to rent LSRTC real estate and to conclude a rent agreement;

5.2.7. contact details (phone number, email address);

5.2.8. the application shall be accompanied by a copy or a transcript of the merchant's registration certificate, if the application is submitted by a legal entity, and a power of attorney, if the application is submitted by an authorised person, certified in accordance with the procedure established by the regulatory enactments;

5.2.9. mother information specified in the published notice

5.3. An Applicant wishing to lease its real estate to LVRTC shall indicate in its application:

5.3.1. natural person - name, surname, personal identification number (if any), address of declared place of residence, address of actual place of residence;

5.3.2. legal entity - name, registration number and registered office;

5.3.3. the address, cadastral number, area and technical condition of the real estate;

5.3.4. rent payments for real estate;

5.3.5. the purpose for which the real estate shall be used;

5.3.6. information on the fulfilment of the requirements mentioned in the published notice (e.g. electricity connection capacity, telecommunications connection);

5.3.7. encumbrances and restrictions on the real estate, if any;

5.3.8. information on whether the ownership of the real estate is registered in the Land Register, indicating the co-owner registered in the Land Register;

5.3.9. draft lease agreement;

5.3.10. other relevant information relating to the use of the property (e.g. information on utility and tax payments);

5.3.11. contact details (phone number, email address);

5.3.12. the application shall be accompanied by a copy or a duplicate of the document certifying ownership, possession or use of the real estate and a copy or a duplicate of the cadastral survey file of the building;

5.3.13. the application shall be accompanied by a copy or a duplicate of the merchant's registration certificate, if the application is submitted by a legal entity, and a power of attorney, if the application is submitted by an authorised person, certified in accordance with the procedure established by the regulatory enactments;

5.3.14. other information specified in the published notice.

5.4. The Applicant's application will not be considered if:

5.4.1. the application is submitted after the closing date indicated in the publication;

5.4.2. the information specified in Clauses 15 and 16 of this Procedure has not been submitted in full.

5.5. In order to assess the possibility of concluding a agreement with the Applicant, the LSRTC may request the Applicant to submit additional information and documents.

5.6. If no Rental Applicant responds to the advertisement, the selection shall be deemed not to have taken place and the LSRTC shall be entitled to send the text of the advertisement to the Applicants of its choice. In such a case, the applicant for the lease shall be determined by negotiation on the basis of the conditions set out in these Rules. The LSRTC shall ensure transparency of the decision-making process.

6.1. The decision on leasing and renting of real estate shall be made by the LSRTC in accordance with these Regulations and in accordance with the procedure established in the normative acts on leasing and renting of real estate.

6.2. If the Applicant offers a higher rental fee in the rental application than the LSRTC has indicated in the publication or for other reasons the offer is uneconomical, the LSRTC shall be entitled to reject the Applicant's offer and not to conclude the agreement.

6.3. The LSRTC shall have the right to withdraw at any time, without prior notice, published information on real estate to be leased or rented.

6.4. If the LSRTC leases real estate, the lease agreement shall be concluded with the Applicant who has offered the highest lease fee and the most economically advantageous offer - after assessing the Applicant's proposals for maintenance and management of the real estate, routine or major repairs.

6.5. If several Applicants offer the same highest rental fee and the most economically advantageous offer, and other terms of the offer are equivalent too, the LSRTC shall ask the Applicants in writing to submit their offer for the new highest rental fee and the most economically advantageous offer, setting a deadline for submission of the information.

6.6. If none of the Applicants offering the same highest rent and most economically advantageous offer submits a new offer for the highest rent and most economically advantageous offer, LSRTC shall offer the agreement to the Applicant according to the order of submission of applications (by registration date and number).

6.7. If the Applicant does not sign the agreement or does not submit a corresponding withdrawal within ten working days of the date of dispatch of the invitation to agreement, the Applicant shall be deemed to have withdrawn from the award of the agreement. In this case, the LSRTC shall have the right to conclude a agreement with the Applicant who has offered the next highest rent and the most economically advantageous offer.

6.8. If the Applicant who has offered the highest rent and the most economically advantageous offer refuses to conclude the lease agreement, the LSRTC shall be entitled to conclude the agreement with the Applicant who has offered the next highest rent and the most economically advantageous offer.

6.9. If the LSRTC rents real estate, the rent agreement shall be concluded with the Applicant who has offered the most appropriate real estate to ensure the operation of the LSRTC, including consideration of the specific location of the real estate, the amount of the lease fee, the requirements of the LSRTC, including technical requirements and other conditions related to the use of the real estate.

6.10. If the conclusion of the agreement is not in the interest of the LSRTC, the LSRTC shall have the right to refuse the conclusion of the agreement by notifying the Applicant in writing.

6.11. In order to reinforce the performance of the obligations under the agreement, LSRTC shall have the right to request a security deposit of up to 2 (two) months' rent from:

6.11.1. an applicant entering into a agreement with the LSRTC for the first time;

6.11.2. an applicant who is more than 2 (two) months in arrears in the payment of rent or other payments, including under any other agreement concluded with the LSRTC;

6.11.3. in any other case, as the LSRTC deems justified.

6.12. The security deposit must be paid by the tenant within 5 (five) working days from the date of conclusion of the agreement.

6.13. The LSRTC shall use the security deposit in the following cases:

6.13.1. if the tenant fails to pay the rent within the period specified in the agreement;

6.13.2. to compensate for damage to real estate caused by the tenant;

6.13.3. in other cases provided for in the lease agreement.

6.14. If the term of the agreement has expired, the agreement is terminated by mutual written agreement or the agreement is terminated at the initiative of the LSRTC and the tenant does not owe any rent and the tenant has paid the rent or other related payments arising from the obligation to use the real estate, the LSRTC shall refund the security deposit to the tenant within 10 (ten) days from the date of signing the statement of transfer - acceptance of the leased real estate.

6.15. If the lease is renewed, the security deposit shall be used to secure the continuation of the lease;

6.16. LSRTC shall not pay interest to the tenant for holding the security deposit.

6.17. If a long-term lease agreement (for a period exceeding five years) is concluded with the tenant and the tenant has made non-separable improvements to the real estate, the LSRTC shall have the right to decide, before the expiry of the term of the agreement, whether to extend the term of the agreement or to lease the real estate to another Applicant in accordance with the procedure set out in these Terms and Conditions. When extending the agreement with the tenant, the condition that the total term of the agreement may not exceed the term of the lease agreement specified in the normative acts on prevention of waste of state and municipal financial resources and property shall be observed.

7.1. If the LSRTC leases real estate, the agreement shall contain the following basic conditions, unless otherwise agreed by the parties.

7.2. LSRTC shall have the right to unilaterally change the amount of the rental fee without amending the concluded rental agreement by sending a written notice to the other party, if:

7.2.1. the consumer price index of the Central Statistical Office on the last day of the rent change exceeds ten percent and the agreement is for more than three years;

7.2.2. the calculation of the amount of the rent includes real estate tax and, in accordance with the laws and regulations, the real estate tax, the taxable object or its value are increased, or new taxes or levies applicable to real estate are introduced. In such cases, the amount of the rent shall be changed as from the date specified in the relevant regulatory enactment or as from the date on which the rate or amount of the real estate tax has changed or a new tax or levy applicable to real estate has been introduced;

7.2.3. a lease agreement is concluded for a period longer than five years and there has been a change in the real estate market conjuncture (condition) or there has been a change in the planned and actual management expenses of the LSRTC real estate.

7.3. If the real estate requires repair, renovation, reconstruction or restoration and the tenant performs it in accordance with the agreement at its own expense and with the written consent of the LSRTC and an accepted cost estimate, upon completion of the said works and at the request of the tenant, the LSRTC may reduce the rent of the real estate in proportion to the investments made by the tenant and the term of the agreement, subject to the requirements set forth in regulatory enactments and the provisions on the reimbursement of necessary and valid expenses set forth in the Civil Law.

7.4. The rent may be reduced if the LSRTC establishes that the tenant has made the relevant investments in accordance with the supporting documents.

7.5. The tenant shall be obliged to insure the real estate for the initial book value of the real estate fixed assets within fifteen days from the date of signing the agreement, specifying the LSRTC as the beneficiary of the insurance indemnity in the insurance agreement. The tenant shall immediately submit the original insurance policy to the LSRTC.

7.6. The tenant agrees to bear the following expenses in addition to the rent:

7.6.1. real estate tax, including, in the case of lease of buildings (structures), parts thereof, payment of real estate tax in accordance with the notional part of the land plot determined in proportion to the leased area in the buildings (structures), parts thereof.

7.6.2. utilities and management charges (e.g. cold and hot water, sewerage, waste removal, heating, electricity, sanitary and technical services), communication services;

7.6.3. other charges related to the use of the real estate.

7.7. The tenant may sublease the leased real estate or a part thereof only if the lease agreement expressly provides for the tenant's right to sublease the leased real estate.

7.8. If the payments referred to in Clause 7.6 are overdue to the LSRTC, the tenant shall pay a penalty of 0.1% of the overdue amount for each day of overdue payment.

7.9. Expenses incurred in establishing or updating the cadastral value of a land plot, changing the purpose of use of real estate or registering the lease right in the Land Register shall be borne by the tenant.

7.10. The LSRTC has the right to unilaterally terminate the agreement early by informing the tenant in writing one month in advance, without reimbursing the tenant for damages and expenses incurred to the real estate, if the tenant:

7.10.1. uses the real estate for a purpose other than that provided for in the agreement, or breaches the conditions governing the use of the real estate;

7.10.2. fails to pay the rent or any other instalment within the period specified in the agreement for two consecutive months;

7.10.3. deteriorates the condition of real estate or, by their acts or omissions, damages real estate;

7.10.4. has sublet the real estate or uses the real estate for joint activities with third parties without the consent of the LSRTC;

7.10.5. arbitrarily, without the consent of the LSRTC or in violation of regulatory enactments, constructs, reconstructs, modifies or repairs the real estate;

7.10.6. after repeated warnings, fails to comply with other obligations under the agreement;

7.10.7. has not produced the original insurance policy or has not made the security deposit;

7.10.8. fails to comply with other laws and regulations relating to the use and maintenance of real estate.

7.11. The LSRTC shall have the right to unilaterally terminate the agreement early, without indemnifying the tenant for any losses incurred in connection with the early termination of the agreement, by informing the tenant in writing one month in advance if the LSRTC has an unforeseen need to use the real estate for its core business.

7.12. The tenant shall have the right to unilaterally terminate the Agreement early by giving one month's written notice to the LSRTC if:

7.12.1. the real estate has become unusable for the purposes of the agreement for reasons beyond the tenant's control;

7.12.2. the necessary authorization or consent for the use of the real estate is not obtained.

7.13. Upon termination of the rental agreement (upon expiry of the agreement or early termination), the tenant is obliged to demolish all buildings (structures) belonging to the tenant on the leased land unit or to vacate the leased real estate of the tenant's belongings in accordance with the terms of the agreement, unless otherwise agreed by the parties, not later than within two months.

7.14. Anything located on the land plot, buildings (structures), premises after the said period will be deemed to be property belonging to the LSRTC and the tenant will be deemed to have expressly waived its right to the said property, which LSRTC shall be entitled to use at its discretion or demolish.

7.15. The Rental Agreement shall, unless otherwise agreed by the parties, contain the following terms for the reimbursement of necessary and useful expenses:

7.15.1. upon expiry of the term of the agreement, or if the agreement is terminated early due to the fault of the tenant or on the tenant's initiative, the LSRTC shall not reimburse the necessary and useful expenses incurred for the real estate. The executed and agreed repair works carried out on the real estate during the term of the agreement shall become the property of the LSRTC in accordance with the estimates and the mutually signed statement of acceptance-transfer of the executed works and the submitted invoice of the tenant;

7.15.2. if the agreement is terminated early on the initiative of the LSRTC and without the fault of the tenant, the tenant shall have the right to claim compensation for the necessary expenses incurred in proportion to the period of lease of the real estate, less depreciation, provided that the expenses, their value and nature, which the tenant has incurred for the benefit of the LSRTC's real estate, have been agreed in writing with the LSRTC and a statement of transfer-acceptance signed by the LSRTC and the tenant has been drawn up for them.

7.16. The plan of the areas of use of the real estate shall form an integral part of the Agreement.

8.1. The lease agreement shall be concluded for the period specified in the normative acts on the lease and rental of real estate and the normative acts on the prevention of waste of public funds and property.

8.2. A rental agreement for a period of more than five years shall be concluded only for real estate that has been surveyed and registered in the Land Register.

8.3. A rental agreement for a period of less than five years may also be concluded for real estate that has not been surveyed and registered in the Land Register.

8.4. If after the conclusion of the land lease agreement the previously established use purpose does not correspond to the land use established in the lease agreement, or the lease agreement specifies the areas subject to the use purpose and the lease agreement does not contradict the detailed planning or spatial planning, if the detailed planning is not necessary, a change of the use purpose of the real estate is proposed:

8.4.1. to the local municipality for real estate registered in the Land Register;

8.4.2. State Land Service for real estate not registered in the Land Register;

9.1. Amendments shall be made to the Regulations in the event of changes in the regulatory enactments of the Republic of Latvia or internal regulatory enactments of the LSRTC, as well as in the event of improvement of the LSRTC information systems. Change management is carried out by the PMD.

9.2. The PMD is responsible for compliance with these Rules in general.

9.3. The Rules shall be approved by the LSRTC Board and shall enter into force upon approval by the LSRTC shareholder.