Legal alerts / 9.04.2020

Measures of support for lessees of public and private property

In pursuance of the provisions of federal legislation about a delay of a rental payment [1] the Government of the Russian Federation continues to develop measures of support for lessees. To date, such measures have been developed for lessees of both public and private property.

On April 3, 2020, the Government’s Resolution No. 439 “On Establishing Requirements for the Terms and Conditions for a Delay of Rental Payments under Real Estate Lease Agreements” (“Resolution No. 439”) entered into force.

Resolution No. 439 applies to lease agreements:

concluded by lessees who are organizations (or individual entrepreneurs) operating in industries that have suffered most from the spread of the coronavirus infection before the state authority made the decision to introduce a state of readiness or emergency within the corresponding constituent entity of the Russian Federation.[2]

Regarding the conditions for granting a delay, Resolution No. 439 provides as follows:

  • No delay has been granted for the rent of apartments;
  • Debt relating to rental payments is payable no earlier than January 1, 2021, and no later than January 1, 2023 in stages no more than once a month, by equal installments of not more than 50% of the monthly rental payment;
  • A delay of 100% of the rental payment for the corresponding period is granted for the period from the date of the introduction of the state of readiness or emergency until the day on which the relevant regime ends; in relation to 50% of the rental payment for the corresponding period, there is a delay from the date of the end of the state of readiness or emergency to October 1, 2020;
  • fines, interest for using other people’s money and other measures of liability owing to the lessee’s non-compliance with obligations to pay the rental payment are not applied;
  • it is not allowed for the lessor to establish additional payments in connection with the granting of a delay;
  • a delay is not provided for utility bills and property maintenance costs;
  • the parties to an agreement are entitled to establish other conditions for granting a delay that do not worsen the position of the lessees, including a reduction of the amount of the rental payment.

 

There are measures for lessees of public property in Moscow and St. Petersburg.

In particular, on March 31, 2020, the Moscow Government adopted Resolution No. 273-PP “On Amending Resolution No. 212-PP of the Government of Moscow dated March 24, 2020”[3], providing for the cancellation of rental payments for the period during which an organization’s activity is suspended.

In accordance with paragraph 3 of this Resolution, companies that rent urban real estate and carry out activities in the field of culture, sports, exhibition activities, catering, leisure, and so on, are exempted from paying rental payments from the 1st day of the month in which such companies’ activity is suspended until the last calendar day of the month in which the suspension of activity ended, but not earlier than July 1, 2020.

To obtain the right to an exemption from rental payments, lessees must submit a written or electronic request indicating the type of their activity to the Moscow City Property Department before December 31, 2020.

Once the request has been accepted, fines, penalties and other liability measures under lease agreements will not be charged during the suspension of the organization’s activities.

Small and medium-sized businesses in the field of hotel services, catering and tourism can expect to receive rental holidays based on Order No. 60-p of the Committee for Property Relationships of St. Petersburg dated April 3, 2020 “On the granting of a delay of payments under lease agreements of land plots, lease agreements of non-residential property, and agreements for the placement of non-stationary trading facilities” ( “Order No. 60-p ”)

Order No. 60-p provides that in relation to a lease agreement for urban land and real estate (land plots, non-residential property, the placement of non-stationary trading facilities), lessees are provided with:

  • a delay until December 31, 2020 (regarding payments under lease agreements for the 2nd and 3rd quarters (April – September 2020) in the case of monthly payments) and
  • subsequent interest-free installments until December 31, 2021 for payment in the form of a lump sum payment or in equal shares in each payment period (interest and penalties will not be charged).

To obtain a delay, lessees (after receiving a notification in their personal account on the website www.commim.spb.ru) must apply to the St. Petersburg State Property Management Committee “Property of St. Petersburg” with an application to conclude an additional agreement for a delay in rental payments until December 31, 2020. Based on the results of the consideration of the application, a draft additional agreement will be sent to the applicant for signing.

 

[1] Art. 19 of the Federal Law No. 98-FZ dated April 1, 2020 “On Amending Certain Legislative Acts of the Russian Federation Concerning the Prevention of and Response to Emergencies”.

[2] In accordance with Resolution No. 434 of the Government of the Russian Federation dated April 3, 2020 “On approval of the list of sectors of the Russian economy that have been most affected by the deterioration of the situation as a result of the spread of a new coronavirus infection”, these sectors include sports and fitness activities, activities of travel agencies, the hotel business, catering, activities for the organization of conferences and exhibitions, and activities for the provision of domestic services to the population.

[3] Resolution No. 212-PP of the Moscow Government dated March 24, 2020 “On measures of economic support in the conditions of a state of readiness”.

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