Are there any emergency and/or interim measure regarding Commercial Lease Agreements in Slovakia?
Many entrepreneurs had to mandatorily close their operations as they were ordered to do so, or they voluntarily closed or limited their operations due to a low demand on their products or services, or disruptions in the respective supplier chains. As a result, they were adversely affected by a significant decrease in their revenues. However, even in cases where the entrepreneurs – as tenants – objectively could not use premises leases for their business operations (as they were ordered to close them), unless very specific clauses had been agreed in the respective leases, in general, pursuant to Slovak law they still had to continue to pay rent and ancillary charges for the leases.
In this connection, a new law was adopted that prevents lessors of real estate, including flats and non-residential properties, to unilaterally terminate leases due to a delay of lessees with the payment of rent, including payments for performance usually associated with the lease, which are due during between 1 April 2020 and 30 June 2020. This protection shall apply only provided that the late payment by a lessee was caused by circumstances resulting from the spread of COVID-19. In particular, a lessor shall not be entitled to unilaterally terminate the lease until 31 December 2020 due to the lessee’s default with the above-mentioned payments if the above-mentioned conditions are met. The reason for the late payment consisting in circumstances, which resulted from the spread of COVID-19, must be sufficiently proven by the lessee. Nevertheless, the lessor is entitled to unilaterally terminate the lease if there are other reasons (other than the lessee’s default with the payments under the lease) – statutory or contractual – entitling the lessor to do so.
Further, the Government of the Slovak Republic also announced a particular financial support scheme in order to mitigate the impact of COVID-19 crisis to mandatorily closed operations. As of the date of preparation of this contribution there was, however, no official approved document on the financial support scheme available yet. Pursuant to the announced conditions of the scheme, the state will pay to lessors a certain amount of rent for the period for which the operations were mandatorily closed. The amount to be paid by the state should be the same as the amount of the discount from the due rent provided by the respective lessor (e.g., if the discount provided by the lessor is 50%, the state would pay to the lessor the remaining 50%; if the discount provided by the lessor is 30%, the state would pay to the lessor 30% of the due rent and the remaining 40% of the rent would be paid by the lessee). Special conditions should apply to the payment of the portion of the rent to be paid by the lessee. The lessee should be entitled to request to pay this portion of rent in 48 installments within next four years and the lessor should not be entitled to increase the agreed rent and to terminate the lease within the said four years. As mentioned, as there is no final formally approved wording of this governmental measure available yet, the outlined financial support scheme is subject to changes.