Real estate measures in combatting the consequences of COVID-19 in CEE

29 April 2020 | newsletters

Real estate measures in combatting the consequences of COVID-19 in CEE – status as of 29 April 2020

Austria

Possibility to use rented space

The Ministry of Health may issue ordinances prohibiting entry into certain shops for goods and services and all kinds of workplaces and construction sites. The Ministry of Health may issue ordinances prohibiting entry into certain areas.

All bans on entry have been extended until 30 April 2020.

Shops & restaurants:

  • The Ministry of Health issued an ordinance prohibiting entry into public areas, except for buying necessary goods in shops which are allowed to open, helping others, going to work and for recreation.
  • The Ministry of Health issued an ordinance prohibiting entry into the customer areas of shops and restaurants with several exceptions, including
    • necessary goods and services;
    • shops that sell, produce, repair and process goods may be entered if the customer area inside is less than 400 m2;
    • other shops and restaurants must shut down;
    • in shopping centres, the customer area of all shops must be added together for the limit of 400 m2 if they are entered via the mall. Only shops that can be entered from outside (i.e. not via the mall) and have a customer area of up to 400 m2 may remain open.
  • In all shops that are allowed to open, masks must be worn by employees and customers (exception: children under the age of six) and a minimum distance of one metre must be maintained.
  • For now, shops with a customer area up to 400 m2 are additionally permitted, but there is a restriction on the number of customers entering at any one time: 20 m2 of the total sales area must be available per customer; therefore, in shops with a customer area of less than 20 m2, only one customer may be in the shop.
  • Delivery and pick-up services are still allowed.

Offices:

  • The Ministry of Health issued an ordinance exempting the prohibition of entry into public areas for the purpose of going to work if it can be ensured that a minimum distance of 1 m between persons is kept at workplaces where the health risk cannot be minimised by other measures. Working from home is recommended if technically feasible and the employer and the employee agree on it – home office is not mandatory.
  • Offices may still be used.

Hotels:

  • The Ministry of Health issued an ordinance prohibiting entry into restaurants with the exception of restaurants which are open only to hotel guests.
  • The governors of Kärnten, Salzburg, Tirol and Vorarlberg issued ordinances on 26 March 2020 that hotels must be closed either completely or to tourists.
  • The Ministry of Health issued an ordinance that hotels may not be entered for recreation and leisure, but may stay open to guests for business purposes.

Possibility to reduce rent

  • Section 1104 ABGB allows rent to be reduced if leased premises cannot be used in the contractually agreed upon way due to a government order (i.e. not due to the tenant's fault).
  • Check in each individual case what the contractually agreed use is and if this use is still allowed – then only partial reduction of rent.
  • Check whether this risk has been contractually shifted to the tenant.
  • Questionable whether Section 1104 ABGB also allows reduction of operating costs.

Risk of termination due to non-payment of rent

  • If the rent is reduced too much, the landlord can terminate.
  • If the Tenancy Act (Mietrechtsgesetz – MRG) applies, the landlord has no termination right if the rent reduction was too high and the tenant was in arrears of rent as a result, but only due to slight negligence.
  • If the tenant of an apartment does not pay rent due in the period from 1 April 2020 to 30 June 2020 because its economic capacity has been significantly impaired as a result of the COVID-19 pandemic, the landlord may not terminate the lease. The landlord may not claim arrears until 31 December 2020 or cover them from a deposit.

Protection against enforcement

  • The debtor can request the postponement of enforcement proceedings even without the imposition of security, if
    • it has been affected by the coronavirus personally;
    • it thereby suffered economic difficulties which led to the initiation of enforcement proceedings;
    • the pending enforcement would lead to its economic collapse;
  • and
    • there is no risk of serious damage to the creditor, i.e. its claim becomes fully or partially irrecoverable.
  • If enforcement proceedings are postponed, creditors may request continuation of proceedings as soon as the said conditions are no longer met; the latest after one year.
  • Eviction orders must be postponed for the time of the CORONA-19 restrictions on movement of people at the request of the obligor without the imposition of a security deposit if the apartment is indispensable to satisfy the urgent housing needs of the obligor and the persons living with him in a common household, unless the eviction is indispensable to avert serious personal or economic disadvantages for the creditor enforcing the eviction.

Building sites

Operation of building sites

  • Allowed, if at the workplace (i) health risk can be minimised by adequate safety measures or (ii) it can be assured that a minimum distance of 1 m is maintained.
  • Representatives of building companies and labour organisations have agreed on a detailed catalogue of safety measures considered to be adequate.

Extension of time

  • Under the general civil law (ABGB), a government order which imposes restrictions on construction works is a risk assumed by the building company.
  • No extension of time.
  • If ÖNORM B2110 is agreed upon, this risk is shifted to the owner – adequate extension of time granted.
  • If a complete shutdown of building sites is ordered, the building company does not act with fault if it exceeds the time – in general no penalties become due.

Additional costs

  • Under the general civil law (ABGB), a government order which imposes restrictions on construction works is a risk assumed by the building company.
  • No additional costs granted.
  • If ÖNORM B2110 is agreed upon, this risk is shifted to the owner – additional costs must be paid.

Deadlines

  • Prescription periods are suspended from 22 March 2020 until 30 April 2020 – start of prescription period and re-start of already running prescription periods 1 May 2020.
 

Bosnia and Herzegovina

This overview includes the real estate related measures and recommendations adopted in each entity of Bosnia and Herzegovina, the Federation of Bosnia and Herzegovina ("FBiH") and Republika Srpska ("RS").

General restrictions

  • Curfew imposed on all persons regardless of age except for those exempted by the government regulation (e.g. persons with special permission, including employees and state officials such as firefighters, police officers and medical staff) daily from 8:00 p.m. to 5:00 a.m. and in RS also from Saturday 12:00 p.m. to Sunday 6:00 p.m.
  • Movement prohibited for persons older than 65 and in FBiH also for persons younger than 18, except on certain periods announced by the state authorities every week.
  • Potential monetary fines in case of breach of the above-mentioned movement measures of up to one year of imprisonment (two years in RS).
  • Prohibition of movement or gathering in public places of more than two persons jointly with the obligation to maintain social distance of at least 2 m.
  • Prohibition of all public transportation.
  • All BiH citizens returning from abroad are obliged to stay in quarantine for 14 days, while entry to BiH is prohibited for all foreigners (except, e.g. foreigners with temporary or permanent residence in BiH, medical workers, diplomats and similar).
  • Closure of most borders for regular purposes/traffic, except import and export of goods.

Possibility to use rented space

Shops & restaurants:

  • Restaurants and food serving businesses of all kinds, coffee shops, nightclubs and bars are closed, while service is only permitted through organised delivery or takeaway points.
  • Shopping centres, retail shops selling any goods other than food or consumer goods as well as other businesses providing services that require close contact between the service provider and the client are closed.
  • Additional prohibition of the following services has been introduced: dentists, hairdressing and cosmetic businesses; all cultural and sports activities in cinemas, galleries, public pools, gyms, concert spaces; also all other businesses providing services that require close contact between the service provider and the client are recommended to be closed.
  • Local governments may adopt additional restrictions regarding operation of shops, e.g. in relation to working hours, or orders to legal entities to make their capacities available for quarantine needs.
  • Some local governments have reduced the rent for all tenants of their real estate.

Offices:

  • Office premises may still be used.
 
  • Employers should cut and reorganise working hours if possible, and organise work in shifts so that as few employees as possible perform work at the same time in one place.
 
  • Employers should instruct employees to work remotely as far as allowed by the nature of their work.
  • Employers should cancel all meetings with a large number of participants. If a meeting is necessary, employers must ensure a spacious meeting room and that a distance of one to two metres is maintained between the participants, as well as the health equipment necessary to protect employees from the spread of the virus, such as face masks.
  • Employers should ensure regular and increased health and safety protection, including hygiene measures in the workspace, such as cleaning, disinfecting and ventilating the offices.
 
  • The inspection authorities will conduct extra checks of the implementation of health and safety measures.

Hotels:

  • Hotels may remain open and serve food only to their guests.

Possibility to reduce rent and terminate lease agreements

  • Under Art. 133 of the RS / FBiH Obligations Act, tenants may request a rent reduction due to a change in circumstances (defined as circumstances in which the tenant's obligations cannot be fulfilled and in which it is obvious that the lease agreement no longer meets the parties' expectations) or termination of the lease agreement.
  • The right to request termination or a rent reduction in case of a change in circumstances may be waived through the lease agreement.

Building sites

  • There is no specific governmental action regarding building sites and construction. Construction work may be performed, provided that the contractors and its employees or workers comply with all prescribed measures.
 

Bulgaria

Possibility to use rented space

The Ministry of Health may issue ordinances prohibiting entry into certain shops for goods and services and all kinds of workplaces and construction sites. The Ministry of Health may issue ordinances prohibiting entry into certain areas.

Shops & restaurants:

  • Stores operating in shopping malls are temporarily closed, except for grocery stores and pharmacies operating within the shopping malls. All other shops may operate subject to certain requirements for social distancing and disinfection.
  • Restaurants, bars and cafés may not be open to the public, but takeaway and delivery is allowed.
  • Casinos, wellness and fitness centres as well as indoor and outdoor sports venues must shut down.

Offices:

  • Offices may still be used.
  • The Government of Bulgaria recommends making maximum use of home office.

Hotels:

  • Hotels can stay open, but all accommodations situated therein such as cafés, restaurants, spa and fitness centres must be closed.

Possibility to reduce rent

  • Currently there is no specific governmental action with respect to rent payments.

Risk of termination due to non-payment of rent

  • The tenant has rights to terminate in case of non-payment subject to the terms of the lease agreement.

Protection against enforcement

  • There is a certain limitation on enforcement only against natural persons during the state of emergency period, currently in force until 13 May 2020.

Building sites

  • There is no specific governmental action regarding building sites and construction. Construction work may be performed, provided that the contractors and its employees or workers comply with all prescribed measures.

Deadlines

Prescription periods are suspended during the state of emergency period, i.e. from 13 March 2020 to 13 May 2020.

Croatia

Possibility to use rented space

Shops & restaurants:

  • Non-essential retail shops and services are generally prohibited from operating (including restaurants, shops, fitness centres, casinos, cinemas, etc.). Essential retail shops and services continue to operate (such as grocery stores, pharmacies, medical supplies, banks, post offices, petrol stations), but have altered working hours and restrictions on the number of customers admitted at one time.
  • Online retail is exempt (including delivery services).

Offices:

  • Offices may still be used (home office work recommended but not mandatory).

Hotels

  • Hotels can stay open, provided that special health and safety measures are observed.

Possibility to reduce rent

  • Croatian law does not grant tenants an explicit statutory right to terminate leases or suspend rent payments where business premises are temporarily closed due to governmental order. However, the tenants may refer to the following civil law instruments:
    • Force majeure will be invoked when the consequences of the extraordinary circumstances are such that performance of obligations under the agreement becomes impossible, in which case the obligations of both parties would cease to exist and no party would be responsible for damages arising therefrom. However, invoking force majeure in the situation at hand is questionable, as the principal obligation of the tenant (i.e. to pay rent) could in principle still be complied with;
    • Clausula rebus sic stantibus, i.e. the "material change in circumstances" institute, would be the basis for requesting a reduction/suspension of the rent due to the COVID-19 pandemic. Namely, if due to extraordinary circumstances arising after the conclusion of the contract, which could not have been foreseen at the time the contract was concluded, the fulfilment of the obligation becomes excessively difficult or would cause excessively large losses for one of the parties, the affected party may require the amendment or even termination of the contract (unless the parties waived their right to invoke the material change in circumstances institute within their contract). The amendment of the contract requires mutual agreement or, in the absence thereof, a court decision. A request to amend the contract must be made prior to the due date for the fulfilment of the affected obligation.
  • No case law is available on similar matters and every instance should be considered on a case-by-case basis. Government intervention is not excluded.

Risk of termination due to non-payment of rent

  • Under the default rule, the landlord of business premises can generally terminate a lease if the tenant fails to settle the rent 15 days after receipt of the landlord's payment reminder (if not otherwise agreed under the specific lease agreement).

Protection against enforcement

  • In general, court activities are not suspended.
  • Governmental measures aimed at protecting natural persons against enforcement in general during the pandemic are expected. In addition, legal entities will be protected against enforcement in cases where a state / public authority or a commercial bank is the creditor.

Building sites

  • Generally allowed. The Croatian Chamber of Civil Engineering has issued a detailed catalogue setting out safety measures to be observed on construction sites (e.g. keeping a minimum distance of 1 m, dividing workers into separate groups, decreasing the number of meetings to a minimum or ensuring they are held out in the open, etc.).

Deadlines

  • The authorities continue to issue construction permits.

There is no specific governmental action regarding deadlines affecting land registry procedures.

Czech Republic

Possibility to use rented space

Shops & restaurants:

  • The majority of shops – excluding shops selling food, petrol stations, drugstores, pet shops, optical shops, newsstands, tobacco stores, laundries, flower shops, funeral parlours, locksmiths, haberdasheries, electronics repair shops, car repair shops and dealerships, car washers, hobby markets, bicycle shops, collection yards, farmers markets, houseware stores if respiratory protective equipment can be purchased in the establishment, and craft shops where there is no physical contact with customers (e.g. hairdressers, barber shops) – must remain closed.
  • Restaurants may not be open to the public, however, it is possible to process takeaway orders and deliveries.
  • Furthermore, casinos must shut down and the presence of the public in the premises of service providers is prohibited (including indoor sport fields).

Offices:

  • Offices may still be used.
  • The Government of the Czech Republic recommends making maximum use of home office.

Hotels:

  • Sale of accommodation services is prohibited with the exception of sales to persons on business trips, foreigners with valid work permits in the Czech Republic or until leaving the Czech Republic, persons in quarantine and persons at risk of domestic violence.
  • The above prohibition does not apply to dormitories, therapeutic spa facilities and school accommodation facilities.

Possibility to reduce rent

  • Tenants may ask for a renegotiation of the lease agreement or eventually its termination in case of a material change in circumstances (hardship). The court will consider the following conditions: (i) gross discrepancy between the rights and obligations of the parties occurred as a result of the change in circumstances; (ii) the possibility of the change in circumstances was not foreseeable at the time when the lease was concluded; (iii) the change in circumstances was not caused by the party requesting the modification; and (iv) the change in circumstances falls outside its normal business risk.

New acts on prohibition of lease termination

  • The Czech Parliament has passed new acts prohibiting landlords from terminating both commercial and residential leases if tenants fail to pay rent. The acts deal with rent falling due between 12 March and 30 June 2020 (in case of commercial leases) and between 12 March and 31 July 2020 (in case of residential leases). Landlords will not be able to terminate any leases up to 31 December 2020 solely on the grounds of the tenant's delay in payment of rent becoming due in the above period.
  • The tenant will be obliged to prove to the landlord that it is not able to pay the rent as a result of a limitation caused by the Czech government's extraordinary measures related to COVID-19. We presume that tenants of commercial premises will be able to prove this if their stores have been shut down as a result of the measures.
  • The obligation of tenants to pay the rent and service charges remains unaffected. If the rent or service charges are not paid when they become due, the tenant may still be obliged to pay the landlord default interest, contractual penalties and damages.
  • The parties may not deviate from the applicable act to the detriment of the tenant.
  • The landlord is legally obliged to declare and pay VAT applied on invoices (including rent) to the tax authority even if the tenant has not yet paid the invoice. The Czech Ministry of Finance has declared that the VAT from unpaid invoices or part thereof for the rent will not be required (based on the landlord's written request for leniency) until it is paid or until 31 December 2020 at the latest.

Protection against enforcement

  • There is no specific governmental action regarding protection against enforcement.

Building sites

  • There is no specific governmental action regarding building sites and construction.

Deadlines

  • There is no specific governmental action regarding deadlines affecting construction / land registry procedures.
 

Hungary

Possibility to use rented space

Shops & restaurants:

  • Shops – excluding shops selling foods, perfumes, drugstore articles, household cleaners, chemicals, household paper, drugs, medical aids, petrol and tobacco – may be open from 6:00 a.m. to 3:00 p.m. daily.
  • It is prohibited to participate in an indoor/outdoor musical or dance event. In addition, theatres and cinemas are closed. Presence is forbidden in catering establishments (restaurant, café). This prohibition does not apply to food delivery and the employees of catering establishments.
  • During the state of emergency, sales negotiated away from business premises may be carried out without notification and registration based on a contract concluded with catering businesses and businesses selling fast-moving consumer goods.
  • Catering businesses and businesses selling fast-moving consumer goods also may carry out sales negotiated away from business premises without notification and registration. Food may be distributed in the context of sales negotiated away from business premises.
  • Mail order service may be provided without notification and registration for the purpose of supply to the general public.
  • In the case of shops and other premises, the operator is required to ensure that customers keep social contacts to a minimum and keep at least 1.5 m distance from each other.
  • People above the age of 65 are only entitled to visit shops selling foods, perfumes and drugstore articles, as well as markets and pharmacies ("Authorised Stores") between 9:00 a.m. and 12:00 p.m. Authorised Stores must ensure that only the employees of the Authorised Store and persons above the age of 65 are in the Authorised Store between 9:00 a.m. and 12:00 p.m.
  • The restrictions were originally in force until 11 April, but on 30 March 2020 the Hungarian Parliament adopted a new law under which the extraordinary measures adopted by the Hungarian Government via Government Decree can be unilaterally extended for an indefinite term, the Hungarian Government reviewing the measures on a weekly basis. This new law was widely criticised in the media.

Offices:

  • Offices may still be used.

Hotels:

  • Hotels can stay open.

Condominiums:

  • Hungary adopted some voluntary relief for the operation of condominiums:
    • Condominiums are not required to hold general assemblies. However, a general assembly must be conveyed if at least 1/10 of the owners propose one, indicating the respective agenda, reason and proposal for the decision of the owners. In such a case, the decision must be made solely by a written procedure. Otherwise, the general assembly must decide on the annual budget, accounting or other cases whose deadline expires during the state of emergency, within 90 days after the end of the state of emergency.
    • In case of the operation of condominiums, a declaration sent electronically (e.g. by email or other electronic form of communication) by an owner or a body of the condominium will be deemed written form if the following can be identified: (i) declarant; (ii) content; (iii) date; and (iv) addressee.
    • A procedural act, which can be performed only in person, must not be taken. The deadlines for such procedures are suspended until the next day following the end of the state of emergency. Such deadlines will renew after this date.
    • The general assembly cannot release or withdraw the mandate of the common representative (or management committee) during the state of emergency. If the mandate of the common representative (or management committee) ends during the state of emergency, the representative must perform all his or her activity with an unchanged remuneration until the appointment of a new representative, but not later than 90 days after the end of the state of emergency. If the mandate of the common representative (or management committee) ends for other reasons, the representative's activities must be performed by the accounting committee. A new common representative (or management committee) must be appointed in the above cases within 90 days after the end of the state of emergency.

Possibility to reduce rent

  • There is no specific governmental action to reduce the rent. However, tenants may refer to the following civil law instruments:
    • Force majeure: Three conjunctive conditions must be fulfilled in order for a non-performing party to be exempt from contractual liability: (i) the cause of the non-performance must be beyond the control of the given party; (ii) such cause was not foreseeable at the time of the conclusion of the contract; and (iii) the party may not reasonably be expected to avoid or overcome the cause. It is widely known that, for example, certain extreme weather conditions and war are usually regarded as force majeure.
    • Hardship (significant change of economic circumstances): This principle allows the court to modify a long-term legal relationship if the party so requests due to significant changes in its circumstances following the conclusion of the lease agreement. The court will consider the following conditions: (i) the contractual performance without any change will adversely affect the legal interest of the party requesting the modification; (ii) the possibility of the change in circumstances was not foreseeable at the time when the lease was concluded; (iii) the change in circumstances was not caused by the party requesting the modification; and (iv) the change in circumstances falls outside its normal business risk.
    • Impossibility: There are three options related to impossibility, depending on whether the parties can exempt themselves as described above. If both parties are exempted, it is called objective impossibility, and the parties will settle their claims based on the services performed so far. If only one party is unable to exempt itself, the other party may claim compensation for the damage caused. Lastly, if both parties are responsible for the impossibility, they must bear the damage in proportion to their contribution. The party who is aware of the impossibility must inform the other party without delay, otherwise it will be liable for the damage caused by the omission.

Risk of termination due to non-payment of rent

  • Under Governmental Decree No. 47/2020. (III. 18.), leases of premises used for tourism, catering, leisure, gambling, the film industry, performing arts, event planning and sports services ("Affected Leases") cannot be terminated until 30 June 2020 (inclusive), and this deadline may be extended. Therefore, there are no grounds for either party to terminate a lease agreement during this period regardless of any violation of the agreement, e.g. the landlord cannot terminate a lease agreement if the tenant does not pay. Moreover, the legislation also provides that the rent, in case of Affected Leases, cannot be increased during the state of emergency regardless of the landlord's rights in this regard.

Protection against enforcement

  • Auctions, onsite enforcement procedures and measures cannot be taken until the end of the state of emergency. In the case of real estate, evictions (in Hungarian: "kiürítés") and all related enforcement measures can be taken only after the end of the state of emergency, with the deadlines renewing on the 15th day after the end of the state of emergency. If the 15th day calculated from the end of the state of emergency falls between 15 November 2020 and 30 April 2021, the respective deadline will renew after 30 April 2021. The bailiff can only take measures for the auction of the real estate of debtors who are natural persons, e.g. the first announcement regarding the auction, not earlier than the 15th day after the end of the state of emergency. Under the above prohibition the bailiff cannot register the potential purchasers in the auction's website.

Building sites

  • There is no specific governmental action regarding building sites and construction.

Deadlines

  • There is no specific governmental action regarding deadlines affecting constructions / land registry procedures.
 

Moldova

Possibility to use rented space

General restrictions:

  • State of emergency declared and in force until 15 May 2020. Decisions during the state of emergency are taken by the Government and the Commission for Exceptional Situations.
  • Groups of individuals exceeding three are prohibited from appearing in public spaces.
  • Individuals aged 63 or older are prohibited from leaving their houses, except to buy food, and in case of health or urgent matters.
  • Instruction on the Quarantine Regime for cities/villages in quarantine was approved. Among others it regulates the movement of individuals and other limitations inside cities/villages that were placed under quarantine by the decision of the Moldovan authorities.
  • The public sector is mainly on paid holiday, while the private sector, besides express prohibitions (as presented below), is recommended to work from home, or the like.

Shops & restaurants

  • Shops must remain closed, except for grocery stores, petrol stations and drugstores. The Moldovan authorities encourage online sales.
  • Restaurants, cafés and similar are ordered to stay closed. However, this prohibition does not apply to food delivery services.

Offices:

  • Offices may still be used. However, leaving the house is permitted only if the business or work activity cannot be done from home.
  • Offices of public budgetary authorities and institutions are closed until 24 April 2020 (except for medical and national defence institutions, and education institutions, which are to organise online studies).

Hotels:

  • Hotels are closed.

Possibility to reduce rent

  • Currently, there is no specific governmental action to reduce rent. There are several statutory provisions tenants may rely on to attempt the renegotiate/adjust the rent.
  • Failure to pay the rent may be justified if caused by an impediment which is insurmountable, unpredictable and inevitable, and which objectively makes it impossible for the tenant to execute the specific obligation. Under the Civil Code, the obligation, e.g. to pay rent, is deemed suspended if the impediment is temporary, while the obligation to pay rent ceases if the impediment is permanent. The existence of the impediment should be agreed by the parties, and in the absence of an agreement, by a court judgment. Each lease agreement must be examined separately to conclude whether the impediment can be invoked.
  • The rent may be reduced in proportion to the landlord's failure to perform its correlative obligation (Art. 933 Civil Code), e.g. the landlord's failure to grant the tenant access to the rented space for the full time as agreed.
  • A party to a lease agreement may invoke the change of economic circumstances (Art. 1083 Civil Code) and attempt to renegotiate the rent. There are a number of conditions for this (which must be met cumulatively): (i) the change in circumstances occurred after the conclusion of the lease agreement; (ii) at the moment of the conclusion of the lease agreement, the tenant did not take into account the possible change and could not have reasonably expected the possibility of the change in circumstances or its magnitude; (iii) the tenant neither assumed nor could have reasonably been expected to have assumed the risk of the change in circumstances; and (iv) the tenant  tried, in a reasonable manner and while acting in good faith, to adjust the rent by means of negotiation in order to justly distribute the losses and benefits resulting from the change in circumstances.

Risk of termination due to non-payment of rent

  • Subject to the provisions of the concluded lease agreement, the tenant's failure to pay the rent for a period exceeding three months entitles the landlord to demand the termination of the lease agreement (Art. 1282 Civil Code).

Protection against enforcement

  • No enforcement procedures and measures can be taken before 15 May 2020.

Building sites

  • There is no specific governmental action regarding building sites and construction. Construction work may be performed, provided that the contractors and its employees or workers comply with all prescribed measures. In practice, almost no construction sites are currently operational.

Deadlines

  • All the restrictions listed above are implemented until 15 May 2020, with the possibility of extension if the Parliament decides to prolong the state of emergency.
  • All procedural prescription terms are suspended for the duration of the state of emergency.
 

Montenegro

Possibility to use rented space

Shops & restaurants:

Temporary measures are currently in force which provide for:

  • Closing of bars and nightclubs
  • Closing of catering establishments – cafés, pubs, cafeterias, restaurants and bars, except for delivery and takeaway
  • Obligation of owners and tenants of restaurants and cafés to make the outdoor furniture inaccessible for use
  • Ban on providing shopping and catering services in shopping malls
  • Limitation on the number of customers (one per 10 m2 with no more than 50 customers allowed in the building at the same time; for farmers markets and bazaars, the number of customers who can be in the facility at the same time is limited to 100). 
  • Closing of hair and beauty salons
  • Discontinuation of educational work in public and private educational institutions
  • Closing of children's playrooms
  • Closing of fitness centres
  • Closing of casinos, betting shops and gambling houses
  • Ban on the operation of commercial facilities, except pharmacies and facilities where food, beverages, hygiene products, motor fuels, construction products, plant protection products and planting products, animal nutrition and treatment products, baby, printing, agricultural and funeral equipment are sold
  • Organisation of working hours between 8:00 a.m. and 6:00 p.m. in pharmacies, food, beverage and hygiene facilities, specialised facilities for the sale of baby equipment, construction products, plant protection products and planting materials, animal nutrition and treatment products, agricultural machinery and funeral equipment, except for delivery services to the customer's address, which can be done during business hours, which the vendor points out in accordance with applicable regulations
  • Organisation of working hours in the period from 7:00 a.m. to 3:00 p.m., in two shifts of four hours per employee for kiosks which sell newspapers

Offices:

  • The Ministry of Health has recommended employers to organise work from home for their employees where possible.
  • Offices may still be used – no obligation to work from home.

Hotels:

  • The Ministry of Health has imposed a ban on providing hospitality services in hotels, except for registered guests.

Possibility to reduce rent

  • Montenegrin law does not contain a mechanism which would lead to the automatic reduction of rent due to measures adopted by state authorities.
  • A party could invoke changed circumstances (Art. 128 of the Contracts and Torts Act), which would allow the court to alter (or rescind) a contract. Careful legal assessment is recommended as to whether the current pandemic would qualify as changed circumstances, i.e. whether it (i) could not have been predicted, and (ii) whether it hinders the performance of the obligation of one party to such an extent that the performance of the obligation would be too burdensome or would incur too large a loss. A party claiming alteration (or rescission) of the contract may not refer to circumstances emerging after the expiration of the deadline determined for the performance of that party's obligation.

Postponement of payments

  • Rent payments for state-owned real estate are postponed for a period of 90 days – one of the measures adopted by the government aimed at helping the economy.

Risk of termination due to non-payment of rent

  • There are currently no measures in place which would prohibit a landlord from terminating a contract.

Protection against enforcement

  • There are currently no measures in place which would provide protection against enforcement.

Building sites

  • Construction activities may be performed. However certain special measures apply to construction works:
 
  •     obligation of legal and natural persons performing construction work to organise the work in a way that ensures respect for epidemiological measures, especially respecting the social distance between employees and other measures to provide occupational health and safety
 
  • The Ministry of Health has ordered companies, other legal entities and sole practitioners who carry out construction works and are responsible for the execution of construction works on buildings:
    • to put up a notice in a conspicuous place on the construction site about the temporary prevention and control measures;
    • to ensure that all employees performing construction work, during their organised transportation to and from the construction site, as well as during their stay and work on the construction site (except during mealtime), use personal protective equipment – masks and gloves;
    • to prohibit all employees who carry out construction work on the construction site, during working hours, from leaving the construction site to procure food, etc.;
    • to provide food delivery to employees performing construction work on the construction site;
    • to ensure social distance during the organised transportation of employees from and to the construction site (bus or van);
    • to organise work in several groups of 20 or less employees at larger construction sites (with 40 or more employees), bearing in mind that groups cannot be changed, while ensuring social distance at the construction site and avoiding to the greatest extent possible physical contact between these groups after leaving the construction site. This obligation also applies to the organisation of collective accommodation of employees, their transportation, area intended for food consumption at the construction site, the time distance when arriving at the construction site, which must prevent the merging of employees divided into groups;
    • to organise the work of the principal, responsible and other engineers indoors in such a way as to provide greater social distance with the mandatory use of personal protective equipment – masks and gloves.

Events & activities

  • The Ministry of Health has prohibited gatherings in indoor and outdoor public places (public gatherings, public events, sports, political, religious, cultural and artistic, private gatherings, ceremonies and events).
  • The presence and loitering of more than one person in public places is prohibited (does not apply to persons who perform their regular permitted work tasks).
  • Leaving residential premises is prohibited for the general population after certain hours.
 

North Macedonia

General restrictions:

  • Prohibition of movement regardless of age to all persons except those exempted by the government decree (e.g. persons with special permission from the Ministry of Internal Affairs) from 4:00 p.m. to 5:00 a.m. Monday to Friday (both inclusive) and from 4:00 p.m. on Friday until 5:00 a.m. on Tuesday.
  • Prohibition of movement or gathering in public places for more than two persons jointly.
  • All Macedonian citizens returning from abroad are obliged to stay in quarantine for 21 days, while entry to the Republic of North Macedonia is prohibited for foreigners.
  • Closure of all borders for entry into the Republic of North Macedonia.

Possibility to use rented space

Shops & restaurants:

  • As of 14 March 2020, closure of all shops in shopping malls with the exception of supermarkets, food markets and pharmacies located in the mall. All other shops in malls can continue to operate and sell by alternative means (e.g. online orders, phone orders, etc.) and can make deliveries.
  • As of 14 March 2020, closure of all catering facilities and restaurants that prepare and sell food. However, they can continue to operate without visitors and sell by alternative means (e.g. online orders, phone orders, etc.) and can make deliveries or operate a takeaway point.
  • As of 12 March 2020, prohibition on gatherings in cinemas, theatres, museums, libraries, sport facilities, gyms, day-cares and swimming pools.
  • As of 14 March 2020, additional prohibitions on all cafeterias, bars, clubs, casinos and sports betting facilities.

Offices:

  • Offices may still be used.
  • Employers are obliged to allow all employees to work from home, where possible, and to organise shift work and enable all business meetings by electronic means.
  • Movement of employees during the lockdown is possible based on special permission issued by the company for the purpose of travel to work.

Hotels:

  • Hotels can stay open.

Possibility to reduce rent and terminate the lease agreement

  • Under Art. 122 of the Macedonian Obligations Act, tenants may request a rent reduction due to a change in circumstances (defined as circumstances in which the tenant's obligations cannot be fulfilled and in which it is obvious that the lease agreement no longer meets the parties' expectations) or termination of the lease agreement.
  • The right to request termination or a rent reduction in case of a change in circumstances may be waived through the lease agreement.

Building sites

  • There is no specific governmental action regarding building sites and construction. Construction work may be performed, provided that the contractors and its employees or workers comply with all prescribed measures.

Deadlines

  • A state of emergency was declared on 18 March 2020 for an indefinite term. However, the Constitution of the Republic of North Macedonia prescribes that a state of emergency may be for a period of maximum 30 days.
  • Deadlines of general administrative procedures that expire during the state of emergency are interrupted for the duration of the state of emergency. The deadlines are continued after the state of emergency is lifted but will not start anew.
 

Poland

Possibility to use rented space

General restrictions:

  • It is prohibited to enter public areas for other than necessary activities (e.g. grocery stores, drugstores or restaurants with delivery service, going to work or walking pets).
  • It is prohibited for groups of more than two people to enter public areas.
  • All persons entering public areas are obliged to maintain a distance between each other of no less than 2 m.
  • As of 16 April 2020, all persons are obliged to cover their nose and mouth when entering public areas.

Shops & restaurants:

  • The activity of retail centres is prohibited and customers are not allowed to enter the customer areas of stores or restaurants other than those providing necessities (such as grocery stores, drugstores or restaurants with delivery service) – other shops and restaurants must be closed.
 
  • Freestanding hardware stores are shut down during the weekends.
  • Shops which are allowed to stay open are obliged to limit the number of customers (no more than three customers for one cash counter) and to provide each customer with basic sanitary equipment while shopping (such as disinfectants and disposable gloves).
  • Delivery service is still permitted.

Offices:

  • Working from home is recommended if technically feasible, but it is not mandatory.
  • There is no specific governmental action regarding the activity of office buildings; however, the prohibition to enter public areas is excluded where this is necessary in order to get to work.
  • Each employer or user of the office space is obliged to comply with sanitary restrictions regarding the presence of employees at the workplace: it must be ensured that a minimum distance of 1.5 m between persons is maintained.

Hotels:

  • Hotel activities are partially suspended.
  • Hotels are not allowed to rent rooms to tourists or for purposes other than renting the rooms to workers or people in quarantine.

Possibility to reduce rent

  • Limitations related to the obligation to pay rent concern the retail sector in particular.
  • In all sectors, tenants are entitled to extinguish the rent in premises leased in public facilities (but this right depends on provisions implemented by the local authorities).
  • The mutual obligations of parties under lease agreements in commercial facilities with sales area exceeding 2,000 m2 expire from the date the activity of such facilities was suspended. Tenants should (but are not obliged to) offer landlords their unconditional and binding offer regarding the prolongation of lease terms, for a period not shorter than the period of the suspension of the activity in such facilities plus an additional six months. Offers should be delivered to the landlords no later than three months from the date of termination of the suspension.
  • The parties may seek limitations of the rent due to force majeure. In such cases, the party seeking the limitation of its obligation due to force majeure is obliged to verify the contractual provisions in this respect and to prove that force majeure had a direct impact on its ability to perform its obligations.
  • The parties may also seek to limit their obligations based on the principle of an extraordinary change in circumstances, but only via court proceedings.

Protection against enforcement

  • If a lease agreement is terminated before 30 June 2020, the tenant is entitled to prolong the lease term until 30 June 2020, based on a statement delivered to the landlord no later than on the date of planned termination of the lease agreement.
  • Other events are not secured by the implemented limitations, subject to the expiration of the parties' mutual obligations under the lease agreement in retail facilities.

Building sites

  • There is no specific governmental action regarding building sites and construction. Construction work may be performed, provided that the contractors and its employees or workers comply with all prescribed measures.

Deadlines

  • All restrictions are implemented until 19 April 2020, but with the possibility to extend this term.
 

Romania

General restrictions:

  • State of emergency declared and in force until 15 May 2020.
  • Citizens may not leave their homes except for specific reasons (work, grocery shopping, exercise, urgent medical care, etc.) and only with a written statement.
  • Seniors (65+) are prohibited from leaving their houses, except for grocery shopping, exercise and other serious reasons, and only between 11:00 a.m. and 1:00 p.m. However, walking pets is allowed between 8:00 p.m. and 9:00 p.m.

Possibility to use rented space

Shops & restaurants:

  • Stores operating in shopping malls are temporarily closed, except for grocery stores, dry cleaners, electronics stores that deliver their products, medical optics stores and veterinary pharmacies operating within shopping malls.
  • Cafés, bars, restaurants, etc. may only serve products to go or for home delivery.

Offices:

  • Office building occupancy reduced due to obligation to work from home (if possible).
  • SMEs as well as some freelancers (i.e. lawyers, notaries public, bailiffs, medical and dental practices with no more than 20 employees) whose activity was entirely or partially interrupted based on decisions taken by the authorities due to the state of emergency may request postponement of payment of the fees for utilities and rent.
  • To benefit from the above, SMEs must obtain a "state of emergency certificate" ("Certificate") issued online by the Ministry of Economy, Energy and Business Environment.
  • Two types of Certificates are regulated:

Type 1 (blue): in case of total/partial interruption of the activity due to a decision of the authorities; or

Type 2 (yellow): in case of reduction by minimum 25 % of the income obtained in March 2020, compared to the average income from January to February 2020.

  • Only one type of Certificate may be requested. Certificates will be issued online based on a statement and corroborating documents (no details on these documents provided). Electronic signature is necessary for submission.
  • Force majeure may be invoked against/by SMEs only after a proven attempt to renegotiate/adapt the agreement. Obtaining a Certificate represents a legal assumption of force majeure for this case, unless proven otherwise.

Events & activities:

  • All cultural, scientific, artistic, religious, sports, entertainment, gambling, balneary and personal treatment activities performed indoors are suspended.

Hotels:

  • Hotels are still open. Restaurants within hotels are closed but may offer room service.

Residential:

  • Local public authorities and owners (legal or natural persons) of residential buildings are instructed to place disinfectant solutions at the entrances and to periodically disinfect elevators and other common spaces of the buildings.

Building Sites

  • Construction workers who are members of the Construction Workers' House (Romanian: Casa socială a constructorilor, an NGO established by law for the protection of employees in the construction sector) may request compensation of 75 % of their average gross income for the previous three months, if their activity is interrupted during the state of emergency.
 

Serbia

General restrictions:

  • Prohibition of movement regardless of age for all persons except those exempted by the Government Decree (e.g. persons with special permission from the Ministry of Internal Affairs) from 5:00 p.m. to 5:00 a.m. Monday to Friday (both inclusive) and from 5:00 p.m. on Friday until 5:00 a.m. on Monday. For persons older than 65 in places with more than 5,000 residents, and older than 70 in places with less than 5,000 residents, movement is completely prohibited, except on Fridays from 4:00 a.m. to 7:00 a.m. The potential penalty in case of a breach ranges from approximately EUR 430 to EUR 1,300.
  • Prohibition of movement or gathering in public places for more than two persons jointly.
  • The distance between two persons must be at least 2 m, and there should be no more than one person in an area of ​​four square metres.
  • Prohibition of all public transport (exception in case of transport of employees based on special permission issued by the Ministry of Internal Affairs).
  • All Serbian citizens returning from abroad are obliged to stay in quarantine for 28 days. Foreigners are prohibited from entering the Republic of Serbia (except, e.g. foreigners with temporary or permanent residence in the Republic of Serbia).
  • Closure of all borders for entry to the Republic of Serbia.

Possibility to use rented space

Shops & restaurants:

  • As of 22 March 2020, closure of shopping centres and similar facilities where access to the premises is from a larger enclosed area (retail parks where every business premises has a separate entrance are still allowed to operate).
  • As of 22 March 2020, restaurants have been shut down, with service only permitted through organised delivery or takeaway points.
  • As of 1 April 2020, additional prohibition on provision of services have been introduced for hairdresser's and beauty salons, manicure and pedicure, fitness clubs and gyms, Turkish baths, saunas and steam baths, solariums, slimming salons, massage salons and other body care services requiring close contact between the service provider and the client, as well as between two or more clients.
  • As of 1 April 2020, all gambling has been prohibited, except by electronic means.
  • Local governments may adopt additional restrictions regarding the operation of shops and provision of other services.

Offices:

  • Offices may still be used.
  • Employers are obliged to allow all employees to work from home, where possible, and to organise shift work, enable all business meetings by electronic means and postpone business trips within Serbia and abroad.
  • Movement of employees during the lockdown is possible based on special permission issued by the Ministry of Internal Affairs for the purpose of travel to work.

Hotels:

  • Hotels can stay open.

Possibility to reduce rent and terminate the lease agreement

  • Under Art. 133 of the Serbian Obligations Act, tenants may request a rent reduction due to a change in circumstances (defined as circumstances in which the tenant's obligations cannot be fulfilled and in which it is obvious that the lease agreement no longer meets the parties' expectations) or termination of the lease agreement..
  • The right to request termination or a rent reduction in case of a change in circumstances may be waived through the lease agreement.

Building Sites

  • There is no specific governmental action regarding building sites and construction. Construction work may be performed, provided that the contractors and its employees or workers comply with all prescribed measures.

Deadlines

A state of emergency was declared on 15 March 2020 for an indefinite term. However, the Constitution of the Republic of Serbia prescribes that a decision on a state of emergency may be for a maximum period of 90 days, with additional extension of another 90 days.

Slovakia

Possibility to use rented space

Shops & restaurants:

  • All retail and service provider operations save the following must remain closed: (i) grocery stores, butchers, bakeries, fruit and vegetable shops, grocery stores with food for special nutritional uses for infants and toddlers, and grocery stores with products for special medicinal uses; (ii) drugstores; (iii) pharmacies, shops and dispensaries of medicinal devices and optics; (iv) newspaper sellers; (v) shops selling feed for animals, and veterinary practices; (vi) telecommunications operators; (vii) restaurants and fast-food shops; (viii) post offices, banks, insurance and leasing services providers; (ix) e-shops with possibility to pick up goods at the store and home delivery services; (x) laundry services and dry cleaning services; (xi) petrol stations; (xii) funeral homes, cemetery services and crematoriums; (xiii) car repair services, towing services; (xiv) providers of Slovak technical control and emission control; (xv) IT and telecommunications repair shops; (xvi) taxi services providing transport of goods or deliveries; (xvii) attorneys, notaries, bailiffs, bankruptcy trustees, mediators, auctioneers, arbitrators, experts, translators; (xviii) lock service providers; (xix) waste collectors; (xx) textile shops; (xxi) bicycle shops and bicycle repair shops; (xxii) gardening providers if the total area of the shop does not exceed 2,000 m2; (xxiii) building materials shops if the total area of the shop does not exceed 2,000 m2.
  • On each Sunday, the following establishments must remain closed: (i) retail shops selling food, meat, bread and pastries, fruits and vegetables, specialised retail shops of nutrition for infants and children, specialised retail shops for medical purposes; (ii) pharmacies (with some exceptions), shops for medical devices; (iii) drugstores; (iv) newspaper stands; (v) shops selling feed for animals, and veterinary practices. The operators are obliged to perform mandatory disinfection of these operations on each Sunday.
  • The presence of the public is prohibited in restaurants and fast-food shops, with the exceptions of takeaway and sale via a dispensing window.
  • Stores and service providers must maintain the following hygiene standards for customers: (i) entry and stay in the facility only with nose and mouth covered (e.g. respirator, face mask, scarf, headscarf); (ii) entry only with disinfected hands or provide disposable gloves; (iii) maintaining a minimum of 2 m distance in queues; (iv) the number of customers must not exceed one customer per 25 m2; (v) provide information about these hygiene standards at the entry to the store and control the number of customers.
  • From 9:00 a.m. to 12:00 p.m. from Monday to Saturday, stores and service providers will allow entry only to persons above the age of 65.
  • Shopping centres must ensure the closure of stores and service providers with the following exceptions: (i) grocery stores, butchers, bakeries, fruit and vegetable shops, grocery stores with food for special nutritional uses for infants and toddlers, and grocery stores with products for special medicinal uses; (ii) drugstores; (iii) pharmacies, shops and dispensaries of medicinal devices and optics; (iv) newspaper sellers; (v) shops selling feed for animals, and veterinary practices; (vi) telecommunications operators; (vii) restaurants and fast-food shops (takeaway and sale out of a dispensing window is allowed); (viii) post offices, banks, insurance and leasing services providers; (ix) e-shops with the possibility to pick up goods at the store and home delivery services; (x) laundry services and dry cleaning services.

Offices:

  • There is no specific governmental action regarding offices.

Hotels:

  • There is no specific governmental action regarding hotels, but operation of the following is prohibited: (i) swimming pools; (ii) sporting establishments; (iii) establishments for children and youth, with the exception of social services providers; (iv) public catering establishments; (v) wellness centres; (vi) entertainment establishments.

Possibility to reduce rent

  • There are currently no specific measures in force that would allow tenants to reduce or postpone payments of rent; however, on 14 April 2020 the government announced that measures related either to postponement of rent or to partial compensation of rent by the government to selected tenants/landlords are being considered.
  • The Slovak Civil Code contains a provision pursuant to which tenants may claim a rent reduction if they can only use the leased premises in a limited manner, but we believe that tenants whose operations had to be closed due to COVID-19 measures cannot rely on this provision (no fault of the landlord and no defects of the premises).

Risk of termination

  • Under the Slovak Civil Code, neither the tenant nor the landlord is entitled to terminate the lease agreement due to the occurrence of a force majeure event (considering that the COVID-19 pandemic could qualify as such). Closure of premises due to a decision of the Public Health Authority or due to a state of emergency cannot be considered grounds for termination of the lease agreement.

Protection against enforcement of pledges

  • Pledges will not be enforced until 30 April 2020. Any actions leading to the enforcement of a pledge before 30 April 2020 are ineffective.

Prolongation of the lease term

  • There is no legal regulation or specific governmental action that would allow the possibility to prolong the lease term due to the COVID-19 pandemic.

Building sites:

  • There is no specific governmental action regarding building sites.

Deadlines

  • Limitation periods and prescription periods are suspended until 30 April 2020, and those which lapsed after 12 March 2020 will not lapse earlier than on 26 April 2020.
  • There is no specific governmental action regarding deadlines affecting constructions / land registry procedures.

Events

  • The organisation of all sports, cultural or any other events is prohibited as of 24 March 2020
 

Slovenia

Possibility to use rented space

Shops & restaurants:

  • Non-essential retail shops and services are generally prohibited from operating (including restaurants, shops, fitness centres, casinos, cinemas, etc.). Essential retail shops and services continue to operate (such as grocery stores, pharmacies, medical supplies, banks, post offices, petrol stations), but have altered working hours and restrictions on the number of customers admitted at one time. Specific operating hours apply for certain groups of people (e.g. pregnant women, pensioners, disabled).
  • Mandatory use of protective gloves and medical masks (or other protection covering the nose and mouth).
  • Online retail is exempt (including delivery services).

Offices:

  • Offices may still be used (working from home recommended, but not mandatory).
  • Mandatory use of protective gloves and medical masks (or other protection covering the nose and mouth).

Hotels:

  • Hotels, wellness centres and other accommodation and recreational facilities are generally prohibited from operating.

Possibility to reduce rent

  • Slovenian law does not grant tenants an explicit statutory right to terminate leases or suspend rent payments where business premises are temporarily closed due to governmental order. Depending on the circumstances and contractual arrangement, the landlords may be presented with arguments that the temporary ban on retail activities amounts to (partial) impossibility of performance or hardship / changed circumstances (rebus sic stantibus). No case law is available on similar matters and every instance should be considered on a case-by-case basis. Government intervention is not excluded.

Risk of termination due to non-payment of rent

  • Under the default rule, a landlord of business premises can generally terminate a lease if the tenant fails to settle the rent two months after receipt of the landlord's payment reminder.

Protection against enforcement

  • All court activities in enforcement proceedings are effectively suspended (i.e. no rulings / hearings / service of documents). The suspension applies until further notice (but hard stop on 1 July 2020). Execution of final and binding writs of execution issued before 16 March 2020 generally still available (but will also be suspended based on recently adopted legislation – pending effectiveness).
  • Creditors are generally protected by way of suspended deadlines (to be reviewed on a case-by-case basis).

Building sites

  • Construction on uninhabited building sites is generally allowed provided no physical contact with consumers occurs.

Deadlines

  • The authorities continue to issue construction permits (deemed as "urgent" matters)

Litigation and land registry procedures: same as with enforcement proceedings (see above – generally suspended until further notice / hard stop 1 July 2020). Exception: interim measure proceedings (no suspension).

Turkey

Possibility to use rented space

Shops & restaurants:

  • As of 16 March 2020 based on a decree of the Ministry of the Interior; the activities of enterprises operating as public recreation and entertainment venues (cinemas, gyms, amusement parks, association clubs, bars, nightclubs, etc.) are temporarily suspended.
  • Restaurants may not be open to the public, but takeaway orders and deliveries are allowed.
  • Stores operating in shopping malls are temporarily closed due to a recommendation of the Association of Shopping Mall Investors.
  • Online retail including delivery services continues.
  • In all shops that are allowed to open (and in public areas) masks must be worn by employees and customers and a minimum distance of 1.5 m must be maintained.
  • The maximum number of customers in grocery stores cannot exceed 10 % of the size of the area.

Offices:

  • Offices may still be used.
  • The Turkish authorities recommend making maximum use of home office and teleworking as well as complying with "stay at home" recommendations.

Hotels:

  • The application of accommodation tax is postponed to 1 January 2021.
  • Hotels can stay open if health risks can be minimised by adequate safety measures, which are determined by the Ministry of Health.
  • Certain hotels have decided to offer their accommodation services free of charge for medical personnel during the COVID-19 pandemic as support.

Possibility to reduce rent

  • There is no specific governmental action to reduce rents so far. However, the following general provisions may apply:

Force majeure: Although it is not explicitly regulated under Turkish law, force majeure can be defined under the precedents of the Turkish Court of Cassation (Yargıtay) as extraordinary events, which (i) do not arise from the debtor's fault, (ii) occur beyond the control of the debtor, (iii) cannot be foreseen/prevented, and (iv) prevent the debtor from fulfilling its contractual liabilities. In addition, in most cases a "force majeure" clause that includes epidemics is contractually foreseen.

Hardship: The provisions of hardship under Art. 138 of the Turkish Code of Obligation allows the parties to request adaptation of the respective agreement from the competent judge in case of extraordinary events which were (i) unforeseen, (ii) unforeseeable at the time in which the respective agreement was executed, and (iii) not attributable to the debtor and have rendered the performance of the debt significantly difficult. In this sense, extraordinary events should have altered the pre-existing circumstances to the detriment of the debtor to the extent that (i) it cannot be reasonably expected from the debtor to perform its obligations, which in turn means that these have deteriorated the balance of either party's obligations in a manner not tolerable by the debtor, and (ii) the debtor must have not fulfilled its obligations or must have fulfilled its obligations with a reservation of its rights arising under the hardship provisions. Accordingly, the temporary COVID-19 measures suspending the activities of certain workplaces or closing shopping malls may constitute an extraordinary event which causes hardship conditions in respect of paying rent.

Impossibility: Under the Turkish legal doctrine and in respect of lease agreements, landlords are obliged to make tenants use the leased property and to make the leased property available to the tenant, while tenants are obliged to pay the rent to the landlord for the leased property. But due to the measures (closing enterprises, etc.) taken by the Turkish authorities and the recommendations of professional associations, the obligations for both landlords and tenants arising from lease agreements will be temporarily impossible. It can be said that in this situation, the landlord's obligation to make the tenant use the leased property and make it available to the tenant has become temporarily impossible. Therefore, the landlord will not be able to oblige the tenant to fulfil its obligation to pay the rent.

  • However, each lease agreement must be reviewed individually with respect to the contractually agreed conditions.

Risk of termination due to non-payment of rent

  • As of 26 March 2020, the tenant's inability to pay rent for a workplace between 1 March 2020 and 30 June 2020 does not constitute a reason for termination of the lease or eviction. However, rent will continue to accrue and tenants will not be relieved of their obligations to pay rent relating to the relevant period.

Protection against enforcement

  • As stated above, the rent will continue to accrue and the tenants will not be relieved of their obligations to pay rent. Non-fulfilment of their obligation to pay will only not constitute a reason for termination of the lease or eviction. But due to the Presidential Decree of 22 March 2020 suspending (i) all pending enforcement and bankruptcy proceedings, (ii) new enforcement and bankruptcy proceedings, and (iii) interim attachment proceedings until 30 April 2020, the lessor can commence execution proceedings only from 1 May 2020.

Building sites

  • Allowed, if at the workplace the health risk can be minimised by adequate safety measures.
  • The Ministry of Environment and Urban Planning has issued a decree stating which safety measures are considered adequate.

Deadlines

  • Prescription periods are suspended from 22 March 2020 until 30 April 2020. The start of prescription periods and the re-start of already running prescription periods will be from 1 May 2020.
 

Ukraine

General restrictions:

  • Lockdown period declared by the Government from 12 March 2020 and in force until 11 May 2020 (initially was declared until 24 April 2020 and further extended as recommended by the Ministry of Health).  
 
  • Groups of individuals exceeding two are prohibited from appearing in public spaces, save for cases of service exigency. An individual appearing in public places must have ID documents confirming their citizenship and/or special status.
  • Attending of all educational institutions, sports and playgrounds, parks and recreation areas is prohibited.
  • Individuals aged 60 or older are prohibited from leaving their houses, except to buy food and medicines, and in case of health or urgent matters.
  • All mass/public events are prohibited.
  • Using public transport is restricted and the metro is closed in the cities of Kyiv, Kharkiv and Dnipro. Instruction on the Lockdown Regime for cities was approved. It inter alia regulates the movement of individuals and other limitations inside cities by the decision of local authorities.
  • The private sector, besides express prohibitions (as presented below), is recommended to organise work from home, teleworking or the like.

Possibility to use rented space

Shops & restaurants:

  • Shops must remain closed, except for those selling food products, agricultural material, telecommunications facilities,
    parts and accessories for vehicles and agricultural machinery, veterinary products, petrol stations and drugstores, subject to staff and visitors wearing appropriate face and eye protection, including respirators or face masks (including self-made ones), for a maximum of one visitor per 10 square metres of retail space, as well as compliance with other sanitary and anti-epidemic measures. The Ukrainian authorities encourage online sales.
 
  • Restaurants, cafés and similar are ordered to stay closed. However, this prohibition does not apply to food delivery services.

Offices:

  • Offices may still be used. However, for business and labour purposes leaving the house is permitted only if such activity cannot be done from home. The Ukrainian authorities encourage online sales and distance working.
  • The Labour Code was amended to officially introduce the possibility of distance working and flexible working hours (Art. 60) and to ensure that salary during the downtime period caused by the government-declared lockdown may not be less than two-thirds of the tariff rate set for the employee (Art. 113).
  • The Government officially recommended public sector entities of strategic importance for the economy and national security and state banks to refrain from making personnel changes in their management bodies to ensure uninterrupted work.

Hotels:

  • Hotels are closed.

Events & activities:

  • All mass/public cultural, scientific, artistic, religious, sports and entertainment activities are suspended.

Possibility to reduce rent

  • The government-declared lockdown is considered as a force majeure circumstance in Ukraine. If a person or undertaking is able to prove that an obligation may not be performed as a result of force majeure, they may be exempt from liability for failure to perform the obligation unless otherwise provided in the contract (the Ukrainian Chamber of Commerce issues a respective certificate confirming force majeure).
 
  • As regards taxation on land use and real estate, the Tax Code (Section XIX, Subsection 10, Art. 52(4)) was amended to reflect that there will be no charges and no payment for the period from 1 March to 31 March 2020 of the (i) land payments for land (land tax and rent for state and communal property)  and (ii) real estate tax for the real estate objects owned or used by natural or legal persons, and used by them for business.
  • As regards use of premises, the Civil Code (Art. 762(4)) states that tenants shall have the right to demand a reduction in payment if, due to circumstances beyond their responsibility, the ability to use the property was substantially decreased. The final and transitional provisions of the Civil Code were amended for the duration of the relevant restrictive quarantine measures imposed by the government to prevent the spread of COVID-19 in Ukraine to establish circumstances for which the tenant is not responsible, including the measures taken by the state authorities that prohibit certain types of economic activity with the use of leased property, or measures prohibiting access to such property by third parties.
  • Additionally, the Civil Code (Art. 762 (6)) was amended to reflect that tenants may be exempt from payment for the whole period during which the property could not be used due to circumstances beyond their control.

Risk of termination due to non-payment of rent

  • Subject to the provisions of the concluded lease agreement, the tenant's failure to pay the rent for a period exceeding three months entitles the landlord to demand the termination of the lease agreement (Art. 782 Civil Code).

Protection against enforcement

  • There is no specific governmental action regarding protection against enforcement, except for the explicit prohibition for the duration of the lockdown and 30 days after its expiration of forced eviction from houses and foreclosure on houses/dwellings owned by Ukrainian citizens as a result of enforcement of court decisions on debt collection for housing and communal services. During the lockdown period, the enforcement departments continue to work and perform their functions.

Building sites

  • Construction work is allowed and may be performed, provided that the sanitary restrictions are observed by the contractors and their employees.

Deadlines

  • All the restrictions listed above are implemented until 11 May 2020.
  • All procedural prescription terms are suspended for the duration of the lockdown.