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24 april 2020

Lease Obligations under COVID-19 Pandemic

For lessees of state property

The Edict of the President of the Republic of Belarus #143 of 24.04.2020 “On the economy support” provides as follows:

  • a deferral of lease payments until September 30, 2020;
  • a reimbursement of expenses related to the maintenance and operation of property, as well as installment of lease payments until December 31, 2020;
  • a prohibition of an increase in the base lease amount and lease payments until September 30, 2020.

The Edict extends to lessees of state-owned immovable property, as well as to property of business entities owned by the state or administrative-territorial units.

It should be noted that the draft Edict does not apply to lessees of commercial real estate.

For lessees of commercial property:

The Edict provides with recommendations for lessors of commercial property regarding rental vacations, decrease in rents, and provision of installments or deferred payments due to coronavirus pandemic.

However, lessees are not entitled to demand rental vacations, decrease in rents, and provision of installments or deferred payments due to coronavirus pandemic. Non-use of leased property (for example, due to the remote work or the absence of visitors) is also not a reason for changing the terms of the lease agreements. However, otherwise may be established by lease agreement terms.

In order to determine possible options for further interaction in this challenging time, we recommend paying attention to the provisions of the contract related to as follows:

  • terms and extent of liability for untimely fulfillment of obligations;
  • terms for making payments by the lessee and making them in full by lessors;
  • terms and cases of unilateral refusal or amendment of the contract;
  • terms for applying the consequences of force majeure circumstances.

 

We will be happy to provide any further information or assistance should you are interested in the above procedures.

Should you have any further queries, please contact VMP real estate practice team partner Ekaterina Zabello (ekaterina.zabello@vmp.by) or senior associate Yuliya Liashenko (yuliya.liashenko@vmp.by)