Rent during quarantine

Author: Maxim Mukhopad
6 March 2023

The issue of rent during the quarantine period is extremely relevant. And what about Ukrainian business if the rented premises are not used during quarantine? Does the tenant have the right not to pay rent in this case?

Relevant changes were made to the Civil Code of Ukraine by the Law of Ukraine “On Amendments to Certain Legislative Acts Aimed at Providing Additional Social and Economic Guarantees in Connection with the Spread of Coronavirus Disease (Covid-2019)”, which was adopted by the Verkhovna Rada of Ukraine as a whole.

According to paragraph 14

According to paragraph 14 (“Final and Transitional Provisions”) of the Civil Code of Ukraine, “from the moment the quarantine was established, introduced by the Cabinet of Ministers Resolution “On Preventing the Spread of Acute Respiratory Disease Covid-19 Caused by the SARS-CoV-2 Coronavirus in Ukraine”, from On March 11, 2020 No. 211 (with subsequent amendments and additions) and until its completion in the manner prescribed by law, the tenant is exempted from paying for the use of property in accordance with Part 6 of Article 762 of the Civil Code.”

St. 762

Art. 762 of the Civil Code of Ukraine provides that the tenant has the right to demand a reduction in the fee if, due to circumstances for which he is not responsible, the possibility of using the property has significantly decreased. The tenant is released from payment for all the time during which the property could not be used by him due to circumstances for which he is not responsible.

Thus, this law defines the prohibition of activities as a circumstance for which the tenant (tenant) is not responsible, that is, as a basis for the release (reduction) of rent.

First of all, the current lease agreement should be reviewed for the wording of the exemption from paying rent and the conditions under which this exemption applies. In the future, negotiate with the landlord and, if possible, reach a certain compromise. It is necessary to inform the landlord in writing about the intention to use the exemption from the fee and make appropriate changes to the lease agreement, in which it is necessary to substantiate and describe in detail the circumstances that make it impossible to use the property, in this case, the ban associated with quarantine is established by law. The application must record the fact that the tenant cannot physically use the premises due to circumstances for which he is not responsible (restrictive quarantine measures), and therefore asks for exemption from rent.

Then it is necessary to prepare a draft supplementary agreement. Often, lease agreements include similar art. 762 of the Civil Code of Ukraine provisions on the release of the tenant from rent for periods when, for reasons beyond his control, he could not use his rented premises. Or a change in rent. In addition to exemption clauses, a provision can also be added to the supplementary agreement on the crediting of already paid rent towards the periods after the end of quarantine.

It is possible that in case of failure to reach agreements with the landlord, you will have to defend your rights in court. In practice, of course, there will be problems with proving the fact of the impossibility of using property.

The Cassation Economic Court as part of the Supreme Court (decision dated April 3, 2019 in case No. 905/1472/17) indicated that if the tenant, due to circumstances beyond his control, was completely deprived of the opportunity to use the leased property for a certain time, then on the basis of the same rule of the law (note part 6 of article 762 of the Civil Code of Ukraine), he has the right to raise the issue of his complete exemption from paying rent.

When assessing such circumstances, it is the presence of circumstances for which the tenant is not responsible, and which make it impossible to use the property. Of course, such a circumstance will be quarantine, introduced by a resolution of the Cabinet of Ministers of Ukraine.