How to obtain a reduction in the rent of a restaurant due to the COVID-19 pandemic.

Difficulties caused by Covid-19
Piotr Kłodziński|
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How to get a reduction in the rent of a restaurant due to the coronavirus pandemic? 

Outline of the problem

Recently, in connection with the authorities' consent to the reopening of catering premises, the issue of terminating premises lease agreements gave way to questions about whether in the current situation it is also possible - after all, completely justified - to demand a reduction in the rent for the catering premises. This question is very important because from the perspective of the catering industry, the unfreezing of this branch of the economy should only be partial. This is due to the restrictions introduced both regarding the rules for arranging tables (which translates into the number of customers) and due to additional costs incurred in providing disposable cutlery, disinfectant liquid and protective walls. The ban on eating meals together with people we do not live with also has a significant impact. There has been a permanent change in relations - now, due to the ongoing epidemic, customers are simply afraid to use stationary catering establishments. In addition, a significant group of former regular customers of the catering industry have moved online and use meals ordered for delivery. All this means that the profits of restaurant owners are far from those before the pandemic, and it should be remembered that they were the reference point when concluding the lease agreement. Moreover, many entrepreneurs have to make up for the losses incurred in recent months, when they could not run their business at all, and the rent was - in our opinion - unfairly charged by some less reasonable and amicable property owners. From a logical point of view, it therefore seems justified to strive to reduce the rent of premises so that its amount corresponds to both the complete closure of stationary premises and when the restrictions are only partially relaxed. Otherwise, unfreezing the economy may not protect catering enterprises from bankruptcy.

Renegotiation of the rent amount

First of all, it is worth trying to negotiate the rent amount with the landlord. Many of them understand the situation the catering industry finds itself in, so they will want to find a way out of the situation, including further cooperation, because the current epidemic will certainly end someday. For the owner of a premises rented for catering purposes, maintaining a constant, although lower income from the rented premises will be a greater profit than the prospect of no income due to the bankruptcy of the entrepreneur. In the current circumstances, finding a new tenant will not be easy. Moreover, if we have been running a business in the same place for a long time and our relationship with the landlord is good, it is certainly in his interest to maintain the contract, because the new tenant may simply turn out to be less reliable, which will lead to conflicts or untimely settling obligations. Many property owners have a history of disputes with previous tenants. Some of them learned a lesson from it, others unfortunately did not.

The arguments presented clearly prove that the negotiating position of tenants of premises
catering is so good that, assuming a rational approach on both sides, as a result of talks with the owner, a solution satisfactory to all can be reached. In such a situation, an appropriate annex to the contract should be prepared, the provisions of which may be permanent or periodic. Temporary annexes with the possibility of renewal are also concluded. For example, the most fair solution seems to be a solution in which the rent reduction applies to the past and the next few months. After this period, depending on the development of the situation - if the restrictions are maintained and the turnover of the premises is low, the landlord will undertake to extend this period, and if they are lifted and the turnover increases to the previous level, the rent will return to the original amount. Of course, you can also work out an intermediate variant in the event that only some of the restrictions are lifted and turnover slowly increases. In such a situation, it is worth asking a law firm together with the landlord to prepare such an agreement in which an experienced attorney will help write down the parties' mutual arrangements and specify in detail all necessary issues between the parties, maintaining reasonable neutrality.

In case of no agreement – clause rebus sic stantibus

the construction of this provision is based on the assumption that failure to take into account the occurrence of special, extraordinary circumstances after the conclusion of the contract, having a significant impact on the performance of the obligation, would lead to an unjustified breach of contractual equity, i.e. to injustice. 
 W. Popiołek in: Commemorative book dedicated to Professor Bogusław Gawlik (edited by J. Pisuliński, P. Tereszkiewicz, F. Zolla), Warszawa 2012, pp. 167–168.

Pursuant to the regulation of Art. 3571 KC "If, due to an extraordinary change in relations, the performance of the obligation would be associated with excessive difficulties or would threaten one of the parties with a significant loss, which the parties did not anticipate when concluding the contract, the court may, after considering the interests of the parties, in accordance with the principles of social coexistence, determine the manner of performance of the obligation, the amount benefits or even order to terminate the contract. When terminating the contract, the court may, if necessary, decide on the parties' settlements, guided by the principles set out in the preceding sentence.

It should be noted that, unfortunately, some people still have doubts as to whether the state of epidemic and the resulting rapid and unexpected change in legal provisions can be considered an extraordinary change in relations. The change in legal provisions itself is something completely natural and entrepreneurs sometimes decide to bear the risk of such changes - in the area of business rules, labor law or tax law - but these changes have also been repeatedly considered to meet the criteria of Art. 357[1] Civil Code The current change in law is caused by an emergency situation that can also be observed outside the borders of our country and even the continent. The restrictions introduced are therefore exceptional, very severe and introduced suddenly. However, following P. Machnikowski, it should be pointed out that
that "The introduction of new, unpredictable and not applied in properly functioning societies legal prohibitions related to a specific situation (e.g. a natural disaster, epidemic, armed conflict, serious economic crisis) should be considered, in my opinion, an extraordinary change in relations.
[AND] A similar position was taken by the Court of Appeal in Kraków, upholding the position of the District Court in one of its key judgments, according to which "an extraordinary change in relations is generally understood to mean a state of affairs that happens rarely, is unprecedented, unusual, although it does not necessarily have to be a catastrophe. For example, there are various types of natural disasters, epidemics, war operations, general strike and even essential and surprising changes in legal regulations. So it's about circumstances that are not covered
typical contractual risk, and are objective and independent of the parties.[II]

At this point, it is worth pointing out one more circumstance, omitted by those commenting on the above provision in the context of the current situation. Considerations on whether a change in regulations can be assessed as an extraordinary change in relations are, of course, right, although this is not the only circumstance that should be analyzed. If no restrictions were introduced on the operation of premises in the form of legal provisions, we would still be dealing with an extraordinary change in the situation. Many customers of catering establishments do not decide to use their services not because they do not like the greater distance between tables, but because of the fear of the virus. The decline in turnover is therefore due to fewer customers, a change in their behavior, and not a change in regulations. At the same time, the consumers' decision is not caused by a decline in the quality of services provided in a given premises, but by the extraordinary, unprecedented situation of the pandemic. There is a high risk of contracting the virus not only in the premises itself, but also on the way there
him – on the street, in public transport or in a taxi. Moreover, bans on meeting people who do not live together at the table effectively discourage customers. If obligations related to disinfection of premises or the use of disposable cutlery were not introduced, the owners of the premises would still have to incur these costs to meet the requirements of customers afraid of being infected with the virus. Failure to introduce such measures, despite their voluntary nature, would expose the premises to a decline in the number of customers because they would choose places completely equipped with safety measures. Following the case law: "examples of events causing an extraordinary change in relations include crop failure, epidemics, war operations, general strikes, various types of natural disasters, an extraordinary, particularly profound change in the economic situation, a sharp change in price levels in a specific market, long-term paralysis of means of transport or communication, change of the political and socio-economic system of the country e.t.c."
[III] Courts of Appeal throughout Poland have made similar statements many times.[IV] The Supreme Court also points out that "an extraordinary change in relations is understood as an event that rarely occurs, is extraordinary, exceptional, and normally unheard of. The causes of this condition include natural events (harvest failure), social events (epidemic, natural disasters, economic crisis) commonly occurring.[V]

The change in the tenant's situation is therefore a consequence of the change in regulations, but even with them
Without it, the situation in the restaurant industry couldn't be much more different. All these circumstances justify the firm statement that the commented provision should apply. This is the purpose of this regulation - it is to be a break from the rule dating back to Roman times pacta sunt servanda (contracts must be kept). It is justified by the fact that humans cannot predict future events, and the current achievements of science and technology are not always - as evidenced by the current situation - able to eliminate unforeseen risks quickly enough. Therefore, the parties to the contract, both the creditor and the debtor, need an appropriate legal tool. When concluding a contract, we determine its content and individual benefits based on external factors, the changes of which, even negative ones, we accept and, consequently, we agree to
associated risks. However, if these changes take the form of extraordinary and unpredictable events, it is justified to provide the party to the legal relationship with protection.

Due to the fact that the above regulation is unique, it is also a method
determining the level of protection granted requires the use of exceptional measures - the use of this regulation always requires a court decision. Only a court, i.e. an independent body equipped with appropriate competences, is able to reshape the legal relationship between the parties and even bring it to an end. This solution should be assessed as correct, although it must be remembered that court proceedings are not usually matters that take place overnight. Nevertheless, all of the above circumstances can be taken into account during mediation proceedings or in an arbitration court, which will significantly speed up the consideration of the case and enable the parties to agree on new, satisfactory conditions. Eliminating the risk of dissatisfaction of one of the parties, and thus the use of legal remedies, significantly shortens the entire process.

The current situation justifies using the described solution. Using professional help will help you avoid failure and loss of trial costs due to ignorance of procedural regulations.

Defect of hired goods

Pursuant to Art. Art. 664 § 1 "If the leased item has defects that limit its suitability for the agreed use, the tenant may demand an appropriate reduction in rent for the duration of the defects." You can read more about the types of defects on our website blog. At this point, it is enough to point out that the restrictions on the use of the premises result from the introduced legal provisions, therefore it is a legal defect. While the application of this provision is not obvious in the case of residential premises, the situation is different in the case of catering premises. First, you should carefully analyze the provisions of the contract, in particular whether it contains a definition of the purpose of the concluded contract. A restaurant is intended to be used to conduct business activities of a specific nature. The rental itself - in a situation where catering services cannot be provided or their provision is severely limited - in our opinion does not meet the criteria.
the purpose for which the contract was concluded. There is no real possibility of providing catering services to the same extent as agreed by the parties or what any reasonable tenant would expect. This is a defect beyond the landlord's control, but it does not change the fact that the use of the premises is significantly limited. Therefore, the use of this regulation may prove to be a solution adequate to the situation, but the content of the contract will be key here, and each case should be analyzed individually.

Consequential partial impossibility of performance

Pursuant to Art. 495 §2 of the Civil Code "If the performance of one of the parties has become only partially impossible, that party loses the right to the appropriate part of the mutual performance." Therefore, if the tenant cannot use the premises to a certain extent, his benefit to the landlord, i.e. the rent paid, should be proportionally reduced. It is worth pointing out that the above article in § 1 indicates that this impossibility results from independent circumstances, and the COVID-19 pandemic can be considered as such. You can read more about the concept of impossibility of providing services on our website blog. At this point, it is enough to point out that in the current situation the impossibility of providing services is both objective and subjective. In the current situation, neither this particular landlord nor any other landlord would be able to ensure full use of the catering premises, because the restrictions introduced are uniform for everyone. Using the premises with restrictions imposed on the tenant may make sense, but the restrictions introduced justify a claim for a rent reduction if the landlord, although through no fault of his own, is unable to provide the premises with the properties agreed upon by the parties. In this respect, it is also crucial to analyze the provisions in order to correctly identify the purpose of the concluded catering premises lease agreement. It does not matter that the landlord is in no way responsible for the situation. In our opinion, this provision also applies to reasons beyond the control of the parties, such as changes in legal provisions.

Summary

In the current situation, reducing the rent of premises is the only reasonable action that can allow many enterprises providing catering services to survive and, at the same time, ensure the durability of real estate lease relationships, which will ultimately benefit all landlords. First of all, it is worth starting negotiations with the other party to the contract, presenting your arguments. This may lead to the conclusion of an appropriate annex to the contract and a reduction in rent, at least for a certain period. However, if the talks do not bring results, it is worth using the solutions presented
legal. The subsequent partial inability to provide services gives us grounds to demand a reduction in rent, and it is worth consulting the content of your contract with a lawyer in this respect to assess whether you will be able to use this institution.
The situation is similar in the case of a defect in the premises, although qualifying the current situation as a defect is controversial. The most effective legal basis for reducing the rent and other fees arising from the lease agreement in the absence of agreement with the owner is to use the code's extraordinary change of relations clause. In our opinion, it gives by far the greatest chance of achieving the desired result, but in order to properly apply it, it is necessary to go to court. However, even with this solution, the parties to the dispute are not forced to wait for a long-term court judgment, because the case can be resolved in the course of previous negotiations, mediation or arbitration. It is also worth remembering that in many cases the use of other contractual security measures by the landlord may be temporarily suspended (until a final judgment is issued) by the court by way of security provisions requested together with the lawsuit. 

FAQ:
1. Should restaurant owners reduce rents while the premises are closed and now that the traffic despite being open is significantly reduced? 
Yes. However, they can only be forced to do so in court, which costs both parties money and takes up time that could be spent on rebuilding the business. That's why sensible landlords give tenants discounts as a result of negotiations. 


2. Do tenants of catering establishments have a chance to win in court?
In our opinion, such tenant claims are fully justified in the current situation. Although everything depends on the specific contract and the specific case, each situation is different. However, we certainly had and currently have a situation that the legislator described as an extraordinary change in relations. The fact that the premises are open today does not mean that they are as profitable as before. The courts will have to take this into account. 

3. Can I claim a refund of already paid rent? 
It depends very much on the specific case, but in our opinion such claims are justified. Although the line of court jurisprudence in this respect is still to be clarified.

Piotr Kłodziński

Legal Counsel

together with the Law Firm Team

 

DO YOU HAVE ADDITIONAL QUESTIONS? DO YOU NEED LEGAL ASSISTANCE IN REDUCING THE RENT RESULTING FROM THE RENTAL AGREEMENT?

WELCOME TO ADD COMMENTS BELOW OR
CONTACT THE AUTHOR: 
PIOTR.KLODZINSKI@KLODZINSKIKANCELARIA.PL


[AND] P. Machnikowski [in:] Gniewek (ed.), Civil Code.
Comment, Warsaw 2019, comm. to art. 357
1 Nb. 7.

[II] Judgment of the Court of Appeal in Kraków of December 6
2016 I ACa 644/16

[III] Judgment of the Court of Appeal in Gdańsk of January 27
2020 V AGa 110/19

[IV] See Judgment of the Court of Appeal in Kraków of 10
July 2018 I ACa 1459/17; Judgment of the Court of Appeal in Warsaw of 10
October 2017, VI ACa 1556/16; Judgment of the Court of Appeal in Rzeszów of
February 7, 2018, I AGa 34/18

[V] Judgment of the Supreme Court of March 8, 2018, II CSK
303/17

 

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How to get a reduction in the rent of a restaurant due to the coronavirus pandemic? 

Outline of the problem

Recently, in connection with the authorities' consent to the reopening of catering premises, the issue of terminating premises lease agreements gave way to questions about whether in the current situation it is also possible - after all, completely justified - to demand a reduction in the rent for the catering premises. This question is very important because from the perspective of the catering industry, the unfreezing of this branch of the economy should only be partial. This is due to the restrictions introduced both regarding the rules for arranging tables (which translates into the number of customers) and due to additional costs incurred in providing disposable cutlery, disinfectant liquid and protective walls. The ban on eating meals together with people we do not live with also has a significant impact. There has been a permanent change in relations - now, due to the ongoing epidemic, customers are simply afraid to use stationary catering establishments. In addition, a significant group of former regular customers of the catering industry have moved online and use meals ordered for delivery. All this means that the profits of restaurant owners are far from those before the pandemic, and it should be remembered that they were the reference point when concluding the lease agreement. Moreover, many entrepreneurs have to make up for the losses incurred in recent months, when they could not run their business at all, and the rent was - in our opinion - unfairly charged by some less reasonable and amicable property owners. From a logical point of view, it therefore seems justified to strive to reduce the rent of premises so that its amount corresponds to both the complete closure of stationary premises and when the restrictions are only partially relaxed. Otherwise, unfreezing the economy may not protect catering enterprises from bankruptcy.

Renegotiation of the rent amount

First of all, it is worth trying to negotiate the rent amount with the landlord. Many of them understand the situation the catering industry finds itself in, so they will want to find a way out of the situation, including further cooperation, because the current epidemic will certainly end someday. For the owner of a premises rented for catering purposes, maintaining a constant, although lower income from the rented premises will be a greater profit than the prospect of no income due to the bankruptcy of the entrepreneur. In the current circumstances, finding a new tenant will not be easy. Moreover, if we have been running a business in the same place for a long time and our relationship with the landlord is good, it is certainly in his interest to maintain the contract, because the new tenant may simply turn out to be less reliable, which will lead to conflicts or untimely settling obligations. Many property owners have a history of disputes with previous tenants. Some of them learned a lesson from it, others unfortunately did not.

The arguments presented clearly prove that the negotiating position of tenants of premises
catering is so good that, assuming a rational approach on both sides, as a result of talks with the owner, a solution satisfactory to all can be reached. In such a situation, an appropriate annex to the contract should be prepared, the provisions of which may be permanent or periodic. Temporary annexes with the possibility of renewal are also concluded. For example, the most fair solution seems to be a solution in which the rent reduction applies to the past and the next few months. After this period, depending on the development of the situation - if the restrictions are maintained and the turnover of the premises is low, the landlord will undertake to extend this period, and if they are lifted and the turnover increases to the previous level, the rent will return to the original amount. Of course, you can also work out an intermediate variant in the event that only some of the restrictions are lifted and turnover slowly increases. In such a situation, it is worth asking a law firm together with the landlord to prepare such an agreement in which an experienced attorney will help write down the parties' mutual arrangements and specify in detail all necessary issues between the parties, maintaining reasonable neutrality.

In case of no agreement – clause rebus sic stantibus

the construction of this provision is based on the assumption that failure to take into account the occurrence of special, extraordinary circumstances after the conclusion of the contract, having a significant impact on the performance of the obligation, would lead to an unjustified breach of contractual equity, i.e. to injustice. 
 W. Popiołek in: Commemorative book dedicated to Professor Bogusław Gawlik (edited by J. Pisuliński, P. Tereszkiewicz, F. Zolla), Warszawa 2012, pp. 167–168.

Pursuant to the regulation of Art. 3571 KC "If, due to an extraordinary change in relations, the performance of the obligation would be associated with excessive difficulties or would threaten one of the parties with a significant loss, which the parties did not anticipate when concluding the contract, the court may, after considering the interests of the parties, in accordance with the principles of social coexistence, determine the manner of performance of the obligation, the amount benefits or even order to terminate the contract. When terminating the contract, the court may, if necessary, decide on the parties' settlements, guided by the principles set out in the preceding sentence.

It should be noted that, unfortunately, some people still have doubts as to whether the state of epidemic and the resulting rapid and unexpected change in legal provisions can be considered an extraordinary change in relations. The change in legal provisions itself is something completely natural and entrepreneurs sometimes decide to bear the risk of such changes - in the area of business rules, labor law or tax law - but these changes have also been repeatedly considered to meet the criteria of Art. 357[1] Civil Code The current change in law is caused by an emergency situation that can also be observed outside the borders of our country and even the continent. The restrictions introduced are therefore exceptional, very severe and introduced suddenly. However, following P. Machnikowski, it should be pointed out that
that "The introduction of new, unpredictable and not applied in properly functioning societies legal prohibitions related to a specific situation (e.g. a natural disaster, epidemic, armed conflict, serious economic crisis) should be considered, in my opinion, an extraordinary change in relations.
[AND] A similar position was taken by the Court of Appeal in Kraków, upholding the position of the District Court in one of its key judgments, according to which "an extraordinary change in relations is generally understood to mean a state of affairs that happens rarely, is unprecedented, unusual, although it does not necessarily have to be a catastrophe. For example, there are various types of natural disasters, epidemics, war operations, general strike and even essential and surprising changes in legal regulations. So it's about circumstances that are not covered
typical contractual risk, and are objective and independent of the parties.[II]

At this point, it is worth pointing out one more circumstance, omitted by those commenting on the above provision in the context of the current situation. Considerations on whether a change in regulations can be assessed as an extraordinary change in relations are, of course, right, although this is not the only circumstance that should be analyzed. If no restrictions were introduced on the operation of premises in the form of legal provisions, we would still be dealing with an extraordinary change in the situation. Many customers of catering establishments do not decide to use their services not because they do not like the greater distance between tables, but because of the fear of the virus. The decline in turnover is therefore due to fewer customers, a change in their behavior, and not a change in regulations. At the same time, the consumers' decision is not caused by a decline in the quality of services provided in a given premises, but by the extraordinary, unprecedented situation of the pandemic. There is a high risk of contracting the virus not only in the premises itself, but also on the way there
him – on the street, in public transport or in a taxi. Moreover, bans on meeting people who do not live together at the table effectively discourage customers. If obligations related to disinfection of premises or the use of disposable cutlery were not introduced, the owners of the premises would still have to incur these costs to meet the requirements of customers afraid of being infected with the virus. Failure to introduce such measures, despite their voluntary nature, would expose the premises to a decline in the number of customers because they would choose places completely equipped with safety measures. Following the case law: "examples of events causing an extraordinary change in relations include crop failure, epidemics, war operations, general strikes, various types of natural disasters, an extraordinary, particularly profound change in the economic situation, a sharp change in price levels in a specific market, long-term paralysis of means of transport or communication, change of the political and socio-economic system of the country e.t.c."
[III] Courts of Appeal throughout Poland have made similar statements many times.[IV] The Supreme Court also points out that "an extraordinary change in relations is understood as an event that rarely occurs, is extraordinary, exceptional, and normally unheard of. The causes of this condition include natural events (harvest failure), social events (epidemic, natural disasters, economic crisis) commonly occurring.[V]

The change in the tenant's situation is therefore a consequence of the change in regulations, but even with them
Without it, the situation in the restaurant industry couldn't be much more different. All these circumstances justify the firm statement that the commented provision should apply. This is the purpose of this regulation - it is to be a break from the rule dating back to Roman times pacta sunt servanda (contracts must be kept). It is justified by the fact that humans cannot predict future events, and the current achievements of science and technology are not always - as evidenced by the current situation - able to eliminate unforeseen risks quickly enough. Therefore, the parties to the contract, both the creditor and the debtor, need an appropriate legal tool. When concluding a contract, we determine its content and individual benefits based on external factors, the changes of which, even negative ones, we accept and, consequently, we agree to
associated risks. However, if these changes take the form of extraordinary and unpredictable events, it is justified to provide the party to the legal relationship with protection.

Due to the fact that the above regulation is unique, it is also a method
determining the level of protection granted requires the use of exceptional measures - the use of this regulation always requires a court decision. Only a court, i.e. an independent body equipped with appropriate competences, is able to reshape the legal relationship between the parties and even bring it to an end. This solution should be assessed as correct, although it must be remembered that court proceedings are not usually matters that take place overnight. Nevertheless, all of the above circumstances can be taken into account during mediation proceedings or in an arbitration court, which will significantly speed up the consideration of the case and enable the parties to agree on new, satisfactory conditions. Eliminating the risk of dissatisfaction of one of the parties, and thus the use of legal remedies, significantly shortens the entire process.

The current situation justifies using the described solution. Using professional help will help you avoid failure and loss of trial costs due to ignorance of procedural regulations.

Defect of hired goods

Pursuant to Art. Art. 664 § 1 "If the leased item has defects that limit its suitability for the agreed use, the tenant may demand an appropriate reduction in rent for the duration of the defects." You can read more about the types of defects on our website blog. At this point, it is enough to point out that the restrictions on the use of the premises result from the introduced legal provisions, therefore it is a legal defect. While the application of this provision is not obvious in the case of residential premises, the situation is different in the case of catering premises. First, you should carefully analyze the provisions of the contract, in particular whether it contains a definition of the purpose of the concluded contract. A restaurant is intended to be used to conduct business activities of a specific nature. The rental itself - in a situation where catering services cannot be provided or their provision is severely limited - in our opinion does not meet the criteria.
the purpose for which the contract was concluded. There is no real possibility of providing catering services to the same extent as agreed by the parties or what any reasonable tenant would expect. This is a defect beyond the landlord's control, but it does not change the fact that the use of the premises is significantly limited. Therefore, the use of this regulation may prove to be a solution adequate to the situation, but the content of the contract will be key here, and each case should be analyzed individually.

Consequential partial impossibility of performance

Pursuant to Art. 495 §2 of the Civil Code "If the performance of one of the parties has become only partially impossible, that party loses the right to the appropriate part of the mutual performance." Therefore, if the tenant cannot use the premises to a certain extent, his benefit to the landlord, i.e. the rent paid, should be proportionally reduced. It is worth pointing out that the above article in § 1 indicates that this impossibility results from independent circumstances, and the COVID-19 pandemic can be considered as such. You can read more about the concept of impossibility of providing services on our website blog. At this point, it is enough to point out that in the current situation the impossibility of providing services is both objective and subjective. In the current situation, neither this particular landlord nor any other landlord would be able to ensure full use of the catering premises, because the restrictions introduced are uniform for everyone. Using the premises with restrictions imposed on the tenant may make sense, but the restrictions introduced justify a claim for a rent reduction if the landlord, although through no fault of his own, is unable to provide the premises with the properties agreed upon by the parties. In this respect, it is also crucial to analyze the provisions in order to correctly identify the purpose of the concluded catering premises lease agreement. It does not matter that the landlord is in no way responsible for the situation. In our opinion, this provision also applies to reasons beyond the control of the parties, such as changes in legal provisions.

Summary

In the current situation, reducing the rent of premises is the only reasonable action that can allow many enterprises providing catering services to survive and, at the same time, ensure the durability of real estate lease relationships, which will ultimately benefit all landlords. First of all, it is worth starting negotiations with the other party to the contract, presenting your arguments. This may lead to the conclusion of an appropriate annex to the contract and a reduction in rent, at least for a certain period. However, if the talks do not bring results, it is worth using the solutions presented
legal. The subsequent partial inability to provide services gives us grounds to demand a reduction in rent, and it is worth consulting the content of your contract with a lawyer in this respect to assess whether you will be able to use this institution.
The situation is similar in the case of a defect in the premises, although qualifying the current situation as a defect is controversial. The most effective legal basis for reducing the rent and other fees arising from the lease agreement in the absence of agreement with the owner is to use the code's extraordinary change of relations clause. In our opinion, it gives by far the greatest chance of achieving the desired result, but in order to properly apply it, it is necessary to go to court. However, even with this solution, the parties to the dispute are not forced to wait for a long-term court judgment, because the case can be resolved in the course of previous negotiations, mediation or arbitration. It is also worth remembering that in many cases the use of other contractual security measures by the landlord may be temporarily suspended (until a final judgment is issued) by the court by way of security provisions requested together with the lawsuit. 

FAQ:
1. Should restaurant owners reduce rents while the premises are closed and now that the traffic despite being open is significantly reduced? 
Yes. However, they can only be forced to do so in court, which costs both parties money and takes up time that could be spent on rebuilding the business. That's why sensible landlords give tenants discounts as a result of negotiations. 


2. Do tenants of catering establishments have a chance to win in court?
In our opinion, such tenant claims are fully justified in the current situation. Although everything depends on the specific contract and the specific case, each situation is different. However, we certainly had and currently have a situation that the legislator described as an extraordinary change in relations. The fact that the premises are open today does not mean that they are as profitable as before. The courts will have to take this into account. 

3. Can I claim a refund of already paid rent? 
It depends very much on the specific case, but in our opinion such claims are justified. Although the line of court jurisprudence in this respect is still to be clarified.

Piotr Kłodziński

Legal Counsel

together with the Law Firm Team

 

DO YOU HAVE ADDITIONAL QUESTIONS? DO YOU NEED LEGAL ASSISTANCE IN REDUCING THE RENT RESULTING FROM THE RENTAL AGREEMENT?

WELCOME TO ADD COMMENTS BELOW OR
CONTACT THE AUTHOR: 
PIOTR.KLODZINSKI@KLODZINSKIKANCELARIA.PL


[AND] P. Machnikowski [in:] Gniewek (ed.), Civil Code.
Comment, Warsaw 2019, comm. to art. 357
1 Nb. 7.

[II] Judgment of the Court of Appeal in Kraków of December 6
2016 I ACa 644/16

[III] Judgment of the Court of Appeal in Gdańsk of January 27
2020 V AGa 110/19

[IV] See Judgment of the Court of Appeal in Kraków of 10
July 2018 I ACa 1459/17; Judgment of the Court of Appeal in Warsaw of 10
October 2017, VI ACa 1556/16; Judgment of the Court of Appeal in Rzeszów of
February 7, 2018, I AGa 34/18

[V] Judgment of the Supreme Court of March 8, 2018, II CSK
303/17

 

Rate this post