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News 11/2020

COVID-19: Measures to support tenants

In order to mitigate the negative consequences of the outbreak of COVID-19, the legislators have adopted measures aimed at protecting the weaker party to selected contractual relations. This newsletter focuses on temporary changes in lease relations published in the Collection of Laws on 27 April 2020.

Prohibition of tenant evictions

The position of tenants using commercial and residential premises has been strengthened in response to the Coronavirus crisis in order to protect them from termination of tenancy for non-payment of rent.

From the date of entry into force of the act until the end of 2020, landlords are not allowed to unilaterally terminate lease agreements on the sole ground that rental payments are delayed. However, this exemption shall not apply to payments for utilities related to lease of commercial premises.

Restrictions imposed by emergency measures linked to the COVID-19 pandemic in the period between 12 March 2020 and the day following the date of termination of the pandemic-related emergency measures, however not later than until 30 June 2020 and 31 July 2020 with commercial premises and residential premises, respectively, shall be deemed a justifiable reason.

With non-residential premises, the tenant has to prove the fact of being prevented or substantially hindered from carrying on its business by submitting the relevant documents within 15 days of the day of the first delay in payment rent. With residential premises, the fact of being prevented or substantially hindered from due payment of rent shall be proved by submitting the relevant Employment Authority’s confirmation.

Tenants’ protection from eviction for non-payment due to the above reasons occurred in the above stated period of time shall apply until 31 December 2020.  If the tenant fails to pay the outstanding rents that became payable on or before 30 June 2020 and 31 July 2020 with commercial premises and residential premises, respectively, by the end of this period of protection,  the landlord shall be entitled to unilaterally terminate the lease agreement with a notice period of 5 days in the case of commercial premises or without notice period in the case of residential premises.

If the tenancy of commercial premises is terminated before the expiry of the protection period, the tenant should pay the outstanding rents within 30 days from the termination of tenancy at the latest.

According to the law, landlords are also free to request a court to terminate the tenancy; however, not until the state of emergency expires.

Price moratorium on residential rents

On 23 April 2020, the Government approved the regulation on price moratorium on residential rents. For as long as the emergency measures apply, landlords shall be prevented from increasing rents. The Government adopted this measure in order to provide further protection of the weaker party to contractual relations and to reduce the population mobility.

According to the statement of the Ministry of Finance, the price moratorium should also apply to concatenation of tenancies. If, during the moratorium, a lease agreement is terminated due to the expiry of the agreed term, with an amendment to the lease agreement or a new lease agreement being concluded between the same parties, there should be no possibility of increasing the rent either.

Please do not hesitate to contact us with specific questions, we are at your disposal at any time.

WTS Alfery Team