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Changes to Leases in Shopping Centres under Covid-19 Law

Changes to Leases in Shopping Centres under Covid-19 Law

Poland
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On 30 June 2021, the Polish President signed an Act (“Amendment”) changing the so-called Anti-Crisis Shield (i.e. Act on specific solutions related to the preventing, counteracting and combating COVID-19, other infectious diseases and crisis situations caused by them, and certain other acts).

The Amendment introduces the following significant changes:

1) repeals current regulations provided by Article 15ze of the Anti-Crisis Shield applicable to leases or similar agreements in commercial facilities with a retail area exceeding 2,000 m2 (according to which the lessee was entitled, subject to provision of a relevant offer [regarding prolongation of a lease], to be entirely released from its obligations under the commercial lease;

2) introduces a new Article 15ze of the Anti-Crisis Shield which provides new consequences of future governmental bans on the business activity of lessees in such facilities:

a) new level of payment reduction for the lessee: the amount of payment obligations of a lessee in a shopping centre towards the lessor (in respect of a lease and/or similar agreement entered prior to 14 March 2020) is reduced to:

  • 20% of dues (of amount payable prior to 14 March 2020 i.e. before 2021 indexation) for the period during which the governmental ban was applicable to such a lessee, and
  • 50% of dues (of amount payable prior to 14 March 2020 i.e. before 2021 indexation) for a period of 3 months after the governmental ban has been lifted.

b) new rebus sic stantibus clause: each party to such a lease (and/or similar agreement) entered into prior to 14 March 2020, may apply to court to determine the amount of reduction in a lessee’s dues, the manner of their payment, or to modify the period during which the lessee may pay reduced dues (even if the general provisions of the Polish Civil Code regarding the so-called rebus sic stantibus clause do not apply).

Important: if a lessee made an offer pursuant to the repealed Article 15ze of the Anti-Crisis Shield and the deadline of such offer expired after 31 December 2020, such lessee is entitled to cancel, within 14 days of the effective date of the Amendment, the legal consequences of such an offer to extend the term of their lease (i.e. with the remaining effect of still being released from dues that would have been payable during the period of the ban on commerce). However, such a cancellation statement has effect only for the future (i.e. it does not affect the prolongation period that has started before the submission of such a statement).

The Amendment will come into force 21 days following its promulgation in the Journal of Laws.

By Agnieszka Koniewicz, Partner, Iga Piotrowska, Senior Associate, Konrad Pecelerowicz, Associate, and Alicja Dzienisik, Junior Associate, Penteris

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