The rent during the quarantine period is reduced to the amount of the lessor's expenses for the maintenance of the property, - the Law was adopted

The Verkhovna Rada nevertheless decided to support tenants of real estate who, during the quarantine period imposed by Cabinet Decision No. 211 of March 11, 2020, could not use the leased property and conduct their business normally.

On June 16, deputies voted in favor of the Law “On Amending Certain Legislative Acts Regarding State Support for Culture, Creative Industries, Tourism, Small and Medium-Sized Enterprises in Connection with the Restrictive Measures Related to the Spread of Coronavirus Disease COVID-19” (adopted on the basis of Project No. 3377 dated 04/22/2020).

Contrary to the title of the act, amendments to paragraph 14 of the Final and Transitional Provisions of the Civil Code of Ukraine apply to all entrepreneurs regardless of their field of activity.

Now this norm provides that for the duration of restrictive quarantine measures, the circumstances for which the tenant (leaseholder) is not responsible (accordingly, has the right to demand a reduction in rent) are also measures introduced by subjects of power that prohibit certain types of economic activities using the leased property, or measures prohibiting access to such property of third parties.

When the President of Ukraine signs the Law and it comes into force, the possibility of demanding a reduction in fees will actually become an imperative for the lessor: the fee for using real estate or part of it is subject to reduction at the request of the tenant who carries out entrepreneurial activities using this property throughout the whole time, while this property could not be used in full by the employer due to restrictions or prohibitions.

Moreover, the size of the fee for the use of property cannot exceed the total (in proportion to the rented area) lessor’s expenses — taxes, utilities, etc.

In other words, those entrepreneurs who could not work in the premises they rented due to quarantine restrictions were actually exempted from the rent, but were obligated to cover the lessor's expenses for maintaining the property.

However, those entrepreneurs who during the quarantine carried out business activities and used the property in full will not be able to count on “discounts”. It is also spelled out in the new law. The reduction in rents will not affect rental contracts for property belonging to the territorial community.

Interestingly, during the preparation of draft No. 3377 for the second reading, these changes were proposed to be excluded. And the profile committee even voted for the corresponding amendment. However, they did not approve of it in the courtroom and decided to leave the original version of the norm proposed by the subjects of the legislative initiative.

However, given the Ukrainian national traditions of rulemaking related to the "refinement" of laws after their voting, the emergence of some nuances cannot be ruled out even after the publication of the act.