CORONAVIRUS TASKFORCE UP-DATE - Prohibition of Lease Termination – 23 April 2020, 10am
Information stated below is of general nature and does not necessarily consider specific conditions of your case. For legal assistance in your specific case, please, do not hesitate to contact us.
Please note that the content below is current as at today, i.e. 23 April 2020, 10 am. In the case of any changes, this content will be amended.
The parliament adopted the amendment of the Act no. 62/2020 Coll. on extraordinary measures due to spread of the dangerous contagious human disease COVID-19 and justice, amending obligations in the area of rent payments in Section 3b.
As of effective date of the amendment (the amendment shall be effective immediately after its promulgation which is expected in following days) the landlord cannot unilaterally terminate lease of real estate (including apartments and non-residential premises) due to the tenant's delay in rent payment if the following conditions are cumulatively met:
- tenant is late with rent or service payments, payable from 1st April 2020 to 30 June 2020 (e.g. in case of a quarterly rent for 3rd quarter, which is due in June),
- delay has arisen due to COVID-19 crisis – this condition is broadly formulated. Drop sales and general decrease of economical activity shall probably fulfil this condition. However, the tenant should certify, that he does not have sufficient funds to pay the rent (meaning funds to pay any other expenses that obligatory payment to state budget or payments to employees). Independent decision of tenant not to pay rent, only because its sales dropped, is not sufficient to fulfil this condition,
- the tenant has to sufficiently prove the reason for the delay with payment – meaning provision of documents proving (i.e. certifying), that delay exists only due to COVID-19.
Unilateral termination of lease by the Landlord is forbidden until 31 December 2020 (unless extended).
It results from the above-mentioned that the prohibition on lease termination does not apply to termination due to late payment of rent or operating costs due under the lease agreement before 1 April 2020 and after 30 June 2020. Similarly, the prohibition on termination does not apply to the right to exercise the right to payment of rent in court in a reminder procedure (payment order), or the right to seek default interest, or use securities available under the respective lease agreement.
The purpose the amendment is to provide special protection to tenants who rent real estate and due to the outbreak of the COVID 19 virus pandemic, they find themselves in an unfavourable situation and are unable to pay rents.
Please note, that landlord’s right to terminate the lease is only suspended (until the end of this calendar year) and landlord’s claims for collection of rent do not expire.