Coronavirus: New Measures to Support Tenants
The Covid-19 pandemic has led to the adoption of a set of exceptional and temporary measures to prevent the spread of SARS-CoV-2 and to the introduction of various forms of support intended to mitigate the economic impact of this situation.
In particular, the following legislation has been approved in the real estate sector:
Law 75-A/2020 and Decree-Law 106-A/2020 were published on 30 December 2020. These laws introduced the seventh amendment to Law 1-A/2020 of 19 March and the third and fourth amendments to Law 4-C/2020 of 6 April. The aim was to strengthen and ensure support for landlords and tenants of residential and nonresidential property, and parties to agreements to commercially operate real estate.
Law 75-B/2020 of 31 December, which approved the State Budget for 2021, also added the new article 8-B to Law 4-C/2020 of 6 April. This new article makes it possible to reduce the fixed or minimum remuneration payable by tenants of stores and other establishments open to the public in shopping centres.
I. Extension of the extraordinary arrangements to protect tenants
Law 75-A/2020 of 30 December amended article 8 of Law 75-A/2020. Law 1-A/2020 of 19 March determined the extension to 30 June 2021 (previously 31 December 2020) of the suspension of (i) the effects of termination notices issued by landlords regarding residential and nonresidential leases; (ii) the expiry of residential and non-residential leases; (iii) the effects of the revocation or opposition to renewal of residential and non-residential leases made by the landlord; (iv) the period for handing over possession of property provided for in article 1053 of the Civil Code. (iv) the period for handing over possession of property provided for in article 1053 of the Civil Code, if termination occurs during the period in which the above measures are in force2; and (v) the foreclosure of a mortgage on a property that is the permanent residence of the mortgage debtor.
The suspension described above depends on the regular payment of the rent due in the month in question, unless the tenants are covered by the rules set out in articles 8 or 8b of Law 4-C/2020 of 6 April, in its current wording (by reference to rent due from October 2020 to June 2021).
Law 75-A/2020 of 30 December clarifies that the suspension of the effects of the above mentioned acts can cease (i) if opposed by the (residential or non-residential) tenant, or (ii), automatically, if the tenant is in arrears in payment of the rents due as from the date of reopening of the establishment3, unless the rents have been deferred.
1 For further details on the successive versions of these laws, see Coronavirus: Rent moratoriums and suspension of agreements - Informative Notes - Knowledge - PLMJ Transformative legal experts and Coronavirus: Payment of rents and other remunerations – Deferral and new rules - Informative Notes - Knowledge - PLMJ Transformative legal experts.
2 The prevention, containment, mitigation and treatment of epidemiological infection by SARS-CoV-2 and the Covid-19 disease, as determined by the public health authority, in accordance with the original wording of Law 1-A/2020.
3 See Section II. 1.