LEASE CONTRACTS IN COVID-19 TIME: SUMMARY NOTES, ADDITIONS AND GUIDELINES
Milan April 15, 2020
The emergency health situation following the spread of the infection from Covid-19 has led to the issue of a series of measures, both nationally and locally, which has immediately highlighted the possible significant repercussions on existing contracts, in particular those of lease for use other than residential. This is due to the forced closure of many activities and the consequent impossibility of using the leased property.
Apart from the tax bonus for commercial leases relating - at the moment - to the month of March and to the specific and only cadastral category C1, there are no other specific legal indications related to the COVID-19 emergency.
Each situation, therefore, is independent and must be carefully evaluated, considering the peculiar aspects of each contractual relationship, the interests of the parties in the continuation of this relationship and the changed conditions of each of them due to the pandemic.
Neither landlord nor tenant are responsible for what has happened and is in place, therefore we hope first of all to find a settlement solution that evaluates, even temporarily, an alternative to litigation, provided that there is mutual interest in continuing in the contractual relationship. The most relevant aspect is certainly linked to the fee, on the payment of which the tenant can make requests for suspension, reduction or even exemption.
The issue must be addressed keeping in mind that:
we are in an emergency situation, which began at the end of January 2020, with restrictive measures issued as of February 22, and as such transitory;
the reference legislation is that contained in the civil code and in the laws 392/78 (leases for non-residential use) and 431/98 (leases for residential use) which govern the leases of urban properties;
none of the measures issued to date as a consequence of the health emergency have provided for payment of the rent;
the matter may be subject to legislative measures that are currently not foreseeable.
REGULATIONS - Civil Code and laws 392/78 and 431/98
Below we indicate the main points relating to the rules governing leases.
1. The tenant must pay the fee, freely agreed between the parties or according to the criteria of the law, in addition to the accessory charges, in the amount and in the manner established in the contract.
2. Failure to pay the rent entails the termination of the contract due to a serious breach by the tenant and the recourse by the landlord to the judgment for eviction for arrears.
3. Only for residential purposes, the law provides, with certain limits, the possibility of remedying arrears before the judge by avoiding eviction.
4. The only rules that provide for the tenant's right to reduce the fee and / or terminate the contract are consequent to the uninhabitability of that part of the rented property which is necessary for the tenant's and his family's accommodation following repairs, or cases of defects.
5. The tenant can withdraw at any time, before the expiry of the contract, by giving six months' notice, if the right of withdrawal is provided for in the contract and, in any case, as required by the law itself, when there are serious reasons (events, that is, extraneous to the will of the tenant, unpredictable and occurring to the contract, which objectively make its continuation extremely burdensome for the tenant).
ATTENTION TO THE CONTRACTUAL AGREEMENTS
It is reiterated that, checking case by case, the lease contract may contain clauses with which the tenant exempts the lessor from any liability both for the non-enjoyment of common services, where the leased unit is in the condominium building, and for the failure to enjoy the rented property due to causes not attributable to the lessor.
ITALIAN CARE DECREE No. 18 17.3.2020 AND CIVIL CODE - Measures issued following the emergency
No provision issued to date relates to the payment of the fee. At the moment there is only a tax credit, in favor of the tenant, equal to 60% of the rent for the month of March actually paid for category C1 commercial properties (shops and shops), with limitation to those activities that - for express legal obligation for contagion containment measures - they cannot be carried out (art. 65 of the DL Cura Italia). According to the D.L. Cura Italia, compliance with containment measures does not mean the automatic suspension of contractual obligations: in art. 91, in fact, we speak of exemption from liability of the debtor also in relation to the application of any forfeiture or penalties related to delayed or omitted fulfillments (ref. Articles 1218