Shield 4.0 clarified that the possibility of temporary termination of lease contracts applies to all spaces in commercial structures with a sales area over 2,000 m2. The earlier wording of this provision raised many doubts.
Entry into force of the Anti-Crisis Shield, i.e. the 31 March 2020 amendments to the Anti-Crisis Act, has had a strong impact on the real estate market, especially the rental market for space at shopping centres. In addition to the widely discussed Art. 15ze, which has extinguished mutual obligations of the parties to lease agreements, the parliament has also introduced another important provision which may significantly affect the rights and obligations of not only the parties to lease agreements, but also other participants in commerce.
As a result of the parliament’s intervention, mutual obligations of parties to lease agreements in shopping centres are deemed to have “expired.” Does that mean that the lease agreements have expired?
The coronavirus epidemic is generating new problems for parties to business transactions: restrictions on business operations, supply disruptions, limited availability of staff and materials, changes in the operation of public bodies and post offices. The downtime they cause has effects not only on civil-law grounds. In addition, there is the issue of expiry of administrative permits. Do the existing regulations, and the new Anti-Crisis Shield, offer any solution?
Many investors currently carrying out construction projects or planning to start them in the near future ask us about the legal possibilities to suspend a project or even withdraw from existing contracts. The question arises whether it makes sense to continue or start projects when implementation will require large financial capital and considerable resources. In this article, we identify legal instruments that may be available to an investor who would decide to stop the performance of works or definitively withdraw from a construction contract.
The pandemic may delay the performance of construction works and increase their costs. It may even make it completely impossible for a contractor to fulfil its obligations. But how this affects the contractors’ legal situation depends on the factual circumstances of the given case and the wording of the specific construction contract.