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COVID-19 Slovenia Update

Impact of the Seventh Anti-Corona Act on lease agreements

On 29 December 2020, the National Assembly of the Republic of adopted the Intervention Measures Act to Mitigate the Consequences of the Second Wave of the Epidemic (“Seventh Anti- Act”), which entered into force on 31 December 2020.

According to the Seventh Anti-Corona Act a lessees of business buildings or business premises (“business real estate”), who are unable to perform their economic activity or are able to perform their economic activity only to reduced extent due to restrictions related to the COVID-19 pandemic and therefore cannot use business real estate in whole or in part for the agreed purpose, may (i) terminate the lease agreement with a written statement with a notice period of 8 days, (ii) request a deferral of payments under the lease agreement or (iii) request an extension of a fixed-term lease agreement. All measures are valid until 30 June 2021 and may be extended by a decision of the Government of the Republic of Slovenia for 6 months.

(i) termination of lease agreement

Pursuant to the Business Buildings and Business Premises Act[1], a lease agreement concluded for an indefinite period may be terminated with a notice period as stipulated in the lease agreement, the notice period may not be shorter than one year. The lessee must submit a statement of termination of the lease agreement to the court. The court then serves the statement to the lessor. The notice period runs from the day the statement was filed with the court. The Seventh Anti-Corona Act simplifies the termination of the lease agreement by lessee by shortening the notice period to 8 days and by allowing that the written statement is served directly to the lessor,

(ii) deferral of payments under lease agreement

Payments of rent and all other payments related to the lease, which are included in the amount of rent in accordance with the lease agreement may be deferred. It is not possible to defer the payments of costs unless if the costs are included in the amount of rent in accordance with the lease agreement.

The lessee may request a deferral of payments only for the period when it was unable to use the business real estate in whole or in part for the agreed purpose due to COVID-19 related restrictions. Deferral of payments due before the Seventh Anti-Corona Act entered into force may also be requested.

The lessee must send a written request for deferral of payments to the lessor, the deferral takes effect when the lessor receives the request. The request for deferral of payment must be sent before the payment is due. In the case of payments due before the Seventh Anti-Corona Act entered into force, the request must be sent within 15 days after the Seventh Anti-Corona Act enters into force.

The lessee must pay deferred payments to the lessor no later than 6 months after the expiry of the measure (i.e., by 30 December 2021, if the measure will not be prolonged). The lessor is not entitled to default interest however it may request appropriate collateral for deferred payments.

(iii) extension of a fixed term lease agreement

The extension of the lease agreement may be requested by the lessee for the period when lessee is prevented or significantly restricted from performing economic activity due to restrictions related to COVID-19. The extension must be requested with a written request sent to the lessor. The extension takes effect when the lessor receives the request.

 

Seventh Anti-Corona Act also increased the limit of the amount of partial reimbursement of uncovered fixed costs for the entities most affected by COVID-19. The beneficiaries whose revenue will fall by more than 70 % in the eligible period are entitled to the financial aid in the maximum amount of EUR 2,000 per employee per month (according to the Sixth Anti-Corona Act the financial aid could not exceed EUR 1,000 per employee per month). All other limitations and conditions remain the same, for more information about this measure please refer to our previous article Impact of the Sixth Anti-Corona Act on lease agreements.

 

The information in this document does not constitute legal advice on any particular matter and is provided for general informational purposes only.

 

[1] Official Gazette of the Republic of Slovenia no. 32/00, as amended.