Manual COVID-19: Business premises

Due to the COVID-19 pandemic, entrepreneurs may get into trouble with paying the rent for business premises. Act No. 210/2020 Coll. on certain measures to mitigate the effects of the COVID-19 epidemic on leases of business premises effective from 27 April 2020 (hereinafter as “Act”) responds to it.

• The lessor cannot unilaterally terminate the lease in the term of protection from 27 April 2020 to 31 December 2020 only due to reason that the lessee is in delay with the payment of rent for the business premises, if the delay occurred:

1. at the relevant time from 12 March 2020 to 30 June 2020, and
2. mainly due to a restriction resulting from an emergency measure during the epidemic, which made it impossible or significantly difficult for him to run a business.

• The Act does not apply to the payment of services. Non-payment of fees or advances of services may continue to be a reason for termination of the lease.
• The lessee is obliged to certify to the lessor without undue delay that the delay arose mainly as a result of the restriction resulting from emergency measures during the epidemic. This condition can be met, for example, by a submitting of document proving the obligation to close the registered office.
• Lessors will have to pay VAT on unpaid rent in due time (even if they do not receive any payment from the lessee).
• If the lessee during the term of protection, i.e. until 31 December 2020, does not pay the lessor for all receivables that became due in the relevant period from 12 March 2020 to 30 June 2020, the lessor has the right to terminate the lease with a five-day notice period.
• If the lease ends before the expiry of the protection period, the lessee is obliged to pay all receivables that became due at the relevant time, within 30 days from the end of the lease.
• The rental rules also apply to the usufructuary lease, if a substantial part of the object of the usufructuary lease is an area used for business.

Authors: Lukáš Zahrádka a David Fabián