Impact of the so-called anti-crisis shield (version adopted on March 31, 2020) on the lease of premises

Civil law

April 7 2020/ k-admin

The Act of 31 March 2020 amending the Act on special solutions related to the prevention, counteracting and combating of COVID-19, other infectious diseases and crisis situations caused by them and some other acts (ustawa z 31 marca 2020 r. o zmianie ustawy o szczególnych rozwiązaniach związanych z zapobieganiem, przeciwdziałaniem i zwalczaniem COVID-19, innych chorób zakaźnych oraz wywołanych nimi sytuacji kryzysowych oraz niektórych innych ustaw), the so-called anti-crisis shield, hereinafter referred to as the “Act”, introduced far-reaching changes in the field of leasing premises in the period until June 30, 2020. The Act supplemented the act of March 2, 2020 concerning special solutions related to the current situation caused by the SARS-CoV-2 virus epidemic (COVID-19) with the provisions of art. 31s, art. 31t and art. 31u.

1. Statement of the lessee – possibility of extending an agreement

Pursuant to the Act, if a lease agreement for the premises was concluded before March 31, 2020 and its term expires between 31 March 2020 and 30 June 2020, the agreement is extended on the existing terms and conditions by virtue of a statement submitted by the lessee. Such statement has to be submitted by the lessee to the lessor at the latest on the day on which the term of the agreement expires. The Act does not specify the form in which the statement has to be submitted, the oral form would theoretically be sufficient, but for the sake of proving the submission of the statement it is recommended to use a documentary form, e.g. e-mail.

2. Exclusions from the possibility of extending an agreement

The Act provides number of exemptions from the possibility of extending a lease agreement of premises in the abovementioned manner. The extension of the agreement will not be available to:

  1. lessees who, during at least 6 months of the lease agreement’s term preceding March 31, 2020, and if the agreement was shorter throughout its term, were in delay with payment of:
    1. the rent or
    2. other than the rent charges for the use of the premises or
    3. fees that are independent of the lessor and charged by him or her – for at least one settlement period if the total value of these outstanding receivables exceeds the amount of rent due for one month,
  2. lessees who have used the premises in a manner contrary to the agreement or contrary to its purpose, or who have neglected their duties by allowing damage to the premises,
  3. lessees who have leased, subleased, or given premises or its part for gratuitous use without the required written consent of the lessor,
  4. lessees who have a legal title to other premises located in the same or a nearby area, if the premises meets the conditions provided for the replacement premises, unless the lessees for independent reasons cannot use it.

3. Admissibility of termination of a lease agreement or the level of rent by the lessor

Furthermore, the Act excludes termination of the lease agreement or the level of rent by lessors until 30 June, 2020 excluding:

  1. in case of a lease of residential premises:
    1. lessees to whom the provisions of article 11 section 2 point 1,3 and 4 of the Act of 21 June 2001 on the Protection of Lessees’ Rights, Municipal Housing Stock and amending the Civil Code (ustawa z 21 czerwca 2001 r. o ochronie praw lokatorów, mieszkaniowym zasobie gminy i o zmianie Kodeksu cywilnego), hereinafter referred to as the “a.p.l.r’” are applied, i.a. lessees using the premises in a manner contrary to the agreement, making the use of other premises cumbersome, leasing, subleasing or giving premises for gratuitous use without the required written consent of the lessor,
    2. lessees who have a legal title to other premises located in the same or a nearby area, if the premises meets the conditions provided for the replacement premises, unless the lessees for independent reasons cannot use it.
  2. in case of a lease of non-residential premises:
    1. lessees who violate the provisions of the lease agreement or legal regulations concerning the usage of the premises,
    2. the need to demolish or renovate the building in which the premises are located.

If the lease agreement for a residential premises or the level of rent was terminated before March 31, 2020 and the notice period ends before June 30, 2020, the notice period is extended until June 30, 2020 on the basis of the lessee’s statements. The admissibility of making such statement has been excluded for lessees:

  1. to which the provisions of article 11 section 2 a.p.l.r. apply,
  2. who have a legal title to other premises located in the same or a nearby area, if the premises meets the conditions provided for the replacement premises, unless the lessees for independent reasons cannot use it.

4. Summary

On the one hand the introduced solutions allow lessees to maintain a stable place of residence or business during the epidemic by extending their lease agreements, but on the other hand they  greatly limit lessors’ rights. As a consequence, the Act may lead to various types of disputes. For example it is worth to mention the situation in which the lessor has already concluded an agreement with a new lessee valid from May 1, 2020, and the existing lessee unilaterally extends the current agreement until June 30, 2020. The question of the lessor’s liability towards the new lessee automatically arises. In addition, it is debatable whether these rules will be often applied in practice, as it seems that without a mass information campaign most lessees would not be informed about the possibility of making the adequate statements. Note: it is likely that the discussed provisions will be further amended due to subsequent changes to the anti-crisis shield. 

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