CHANGES TO THE GOVERNMENT’S DRAFT BILL ON MALL AND SHOPPING CENTRES RENTALS DURING COVID-19 IN POLAND – status as of March 27, 2020
Emotions do not stop at the end of the legislative work on the draft bill regulating the rental and tenancy contracts in shopping malls in Poland in the era of the COVID-19 crisis. In this case, the Polish government addressed an amendment to its own bill to Polish Parliament, which it put to voting 24 hours earlier.
KIEŁTYKA GŁADKOWSKI KG LEGAL is closely following the legislative process of anti-crisis regulations which the Polish government wants to introduce in Poland to alleviate the economic situation of the COVID-19 crisis, particularly by means of the emergency COVID-19 act (the so-called anti-crisis shield).
One of the economic problems that the Polish government wants to regulate in this way is the issue of rents and rental agreements in retailer shopping malls in Poland (i.e. in large retailer malls of over 2000 m2).
The main problem is the issue of who is to bear the burden (cost) of closing the shopping centres due to the condition of the COVID-19 epidemic announced on March 20, 2020 throughout Poland.
The original draft bill (about which you can read here) assumed that the rents will be covered in 90% by the landlords (e.g. the entity that owns the entire shopping mall). The government’s amendment to the draft anti-crisis law, submitted on March 27, 2020, introduces a completely different solution.
According to the new amendment, lease agreements or other contracts for the use of shopping space in these retailer malls in Poland should be temporarily terminated so that tenants and landlords are not obliged to provide mutual benefits, generating costs for both parties during COVID-19 period. After the ban ceases, the current tenants of the retail shopping centres will be obliged to submit to landlords an offer to extend the current legal relationship of tenancy under the same terms as those arising from the current rental agreements, but for a longer period, i.e. for the entire period of the ban on trade due to epidemy and for an additional 6 months. If the offer is not submitted by the tenants within 3 months from the day the ban was lifted, the contracts will be considered expired. The provision on the temporary expiry of rental agreements in shopping malls should apply from the date the ban on trade is announced.
The introduced legal solution does not deprive the contracting parties of the use of other general solutions arising from the Polish law of obligations, specified in the Polish Civil Code, in the event of restrictions on the freedom of economic activity. This is an obvious reference to the rebus sic stantibus clause contained in art. 3571 § 1 of the Polish Civil Code. This provision states that “If, due to an extraordinary change in relations, the performance would be connected with excessive difficulties or would threaten one of the parties with gross loss, which the parties did not anticipate at the conclusion of the contract, the court may, after considering the interests of the parties, in accordance with the principles of social coexistence, define the manner of performing the obligation, the amount of the benefit or even decide to terminate the contract. When terminating the contract, the court may, if necessary, decide on the parties’ mutual settlements, following the principles set out in the previous sentence.”
When maintaining the current wording of the draft bill, anti-crisis provisions will not fully resolve all contentious issues of lease agreements in retailer shopping malls in Poland. The new anti-crisis provisions will leave a free way to the tenants and landlords to pursue claims in Polish courts based on the general provisions of the Polish Civil Code.
