Restaurants at shopping malls also eligible for temporary termination of leases | In Principle

Shield 4.0 clarified that the possibility of temporary termination of lease contracts applies to all spaces in commercial structures with a sales area over 2,000 m². The earlier wording of this provision raised many doubts.

The set of provisions known as “Shield 4.0” (act of 19 June 2020) was approved on 23 June 2020, amending Art. 15ze of the Anti-Crisis Act of 2 March 2020 on the conditional and temporary termination of lease contracts in large-area structures. From the time the Anti-Crisis Act entered into force, Art. 15ze had been extensively commented on and stirred many doubts on how it should be interpreted.

Substance and aim of regulation

The lawmakers’ aim was to counteract the negative consequences of the ban on doing business in commercial structures with a sales area greater than 2,000 m². This provision primarily called for total relief of tenants of commercial space from the duty to pay rent during the period of the ban on operations—but under one condition.

The condition is that within three months after the end of the ban, the tenant must submit an offer to the landlord to prolong the lease by the period of the ban plus a further six months. If the tenant does not submit such an offer to the landlord by that deadline, the landlord ceases to be bound by the relief from payment of rent and can demand performance of that obligation by the tenant as if the lease were not terminated during the period of the ban.

Doubts surrounding the scope of application

After this provision entered into force, the question arose how the notion of commercial space should be understood. Does this provision apply only to tenants conducting the business of retail sales? Or does the provision also apply to tenants conducting service activity or gastronomy?

From the start, the Ministry of Agriculture took the position that Art. 15ze of the Anti-Crisis Act should be applied to all leases in commercial structures covered by the ban on business operations. However, in practice different interpretations of this provision were encountered. Most lawyers interpreted the provision literally and concluded that it should apply only to leases for retail space and not service or gastronomic space.

Amendment

Shield 4.0 amended Art. 15ze of the Anti-Crisis Act by adding par. 5, which states that “commercial space” shall be understood to mean space in a commercial structure with a sales area greater than 2,000 m², regardless of the purpose for which the space was delivered to the occupant for its use, in particular for the purpose of sale of goods, provision of services, or gastronomy. Art. 15ze(5) of the Anti-Crisis Act entered into force on 24 June 2020, but effective from the date of entry into force of the particular ban on conducting activity in a large-area commercial structure.

This means that currently every tenant of space (retail, service, gastronomic etc) in a commercial structure with a sales area greater than 2,000 m² affected by the ban on conducting the operations for which that space was used may submit an offer to the landlord to prolong the lease under the existing conditions for the period when the ban was in force and a further six months, and may demand a refund of rent paid for the period when the ban was in force.

Karolina Dawidczyk, Sylwia Moreu-Żak, attorney-at-law, Real Estate Development practice, Wardyński & Partners