Commentary to the articles of Paragraph 5. Lease of an enterprise of Chapter 29 Property Lease Agreement of the Civil Code of the Republic of Kazakhstan

5.1. The lease of an enterprise is regulated by § 3 of Chapter 29 of the Civil Code (Articles 573-580 of the Civil Code).  

This type of lease was especially popular during the transition period of the economy of the former USSR, as well as the Republic of Kazakhstan to a market economy. There were special Laws of the USSR and the Kazakh SSR on lease, while the lease of the enterprise was considered as one of the intermediate stages of privatization. However, the lease of an enterprise regulated by the Civil Code differs significantly from the lease of enterprises during the perestroika period.  

5.2. The object of the enterprise lease agreement is the enterprise as a whole as a property complex (as defined in Article 119 of the Civil Code), including the entire range of exclusive rights, except for those rights and obligations that the lessor does not have the right to transfer to other persons (paragraph 1 of Article 573 of the Civil Code). The rights of the lessor obtained by him on the basis of a license to engage in relevant activities are not subject to transfer to the lessee, unless otherwise established by legislative acts (Clause 2, Article 573 of the Civil Code).  

5.3. Protection of creditors' rights. One of the most important points in the legal regulation of enterprise leases is the protection of the creditors' rights of the leased enterprise. The Civil Code contains a set of rules aimed at protecting such rights.  

As a general rule, an enterprise can be transferred to a lessee only after completing settlements with creditors who have demanded termination or early fulfillment of obligations from the lessor (Clause 2, Article 574 of the Civil Code).  

Article 574 of the Civil Code establishes a number of specific requirements that must be fulfilled in relation to creditors, including the obligation to notify creditors of the transfer of debts to the lessee before concluding the contract and the consequences of non-fulfillment of this obligation (paragraphs 1, 3 of art. 574 of the Civil Code).  

The inclusion of obligations in the structure of an enterprise transferred under a lease agreement, the fulfillment of which is impossible by the lessee in the absence of such a special permit (license), does not release the lessor from the corresponding obligations to creditors (paragraph 2 of Article 573 of the Civil Code).  

With regard to the rights and obligations of the parties to the contract in relation to the employees of the enterprise, the Civil Code contains a reference norm to the legislative acts on labor (paragraph 3 of Article 573 of the Civil Code).  

5.4. The form of the enterprise lease agreement. Special requirements have been established for the form and state registration of an enterprise lease agreement: the agreement is concluded in writing by drawing up a single document signed by the parties, is subject to state registration and is considered concluded from the moment of registration. Failure to comply with the form of the lease agreement of the enterprise entails its invalidity (art. 575 of the Civil Code).  

5.5. Maintenance of the leased enterprise and making changes and improvements to the leased property by the lessee.  

The lease agreement of the enterprise has special features in terms of the tenant's obligation to maintain the enterprise. As a general rule, the lessee is required not only to carry out current repairs, but also to overhaul the leased enterprise, as well as to pay for its operation costs, unless otherwise provided by the contract (art. 577 of the Civil Code).  

The lease agreement of an enterprise allows for a much wider use and disposal of the property of the leased enterprise than usual, provided that this does not entail a reduction in the value of the enterprise and does not violate other provisions of the lease agreement, unless otherwise provided for by legislative acts or the contract (art. 578 of the Civil Code). The lessee has the right, without the consent of the lessor, to make changes to the composition of the leased property complex, to carry out its reconstruction, expansion, and technical re-equipment, increasing its value. He has the right to be reimbursed for the cost of inseparable improvements to the leased property, regardless of the landlord's permission for such improvements (these rules apply, unless otherwise provided by the contract) (paragraphs 1, 2 of art. 579 of the Civil Code).  

5.6. In addition to the general rules for the return of leased property, the lease agreement, Article 580 of the Civil Code establishes special rules for the return of a leased enterprise: the preparation of the enterprise for transfer to the lessor, including the preparation and submission for signature of the transfer act, is the responsibility of the lessee and is carried out at his expense, unless otherwise provided by the contract (Article 580 of the Civil Code).

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The commentary was prepared within the framework of the scientific and practical research program of the Scientific Research Center of Private Law of the Kazakh State Law University.  

Head of the working group on the preparation of the draft Civil Code of the Republic of Kazakhstan, Corresponding Member of the Academy of Sciences of the Republic of Kazakhstan, Professor Suleimenov M.K.

Deputy head Professor Basin Yu.G.