Prohibition of unilateral termination of the lease

The essence of the regulation is that tenants are protected against unilateral termination by the landlord if they stop paying rent. Specifically, these are business owners for whom the restrictions resulting from the emergency epidemic measure have made it impossible or substantially more difficult to operate their business.

And it is also the tenants of the flats, for the most part, who are prevented or made substantially more difficult by the crisis from paying their rent properly.

The law also imposes time limits. In all cases, the period of the crisis measures is limited to the period during which the crisis measures are in force and, in the case of entrepreneurs, to the end of June at the latest, and in the case of tenants of flats, the limitation applies to rents until the end of July. In both categories, the landlord can only terminate the contract from the beginning of the next year for these rents (but then without notice period). De facto, this postpones the maturity of the rents in question (for March to June (or July)) until 31 December 2020. The Senate’s amendment that the state should guarantee most of the rent due in this way did not pass.

What do clients ask?

It should be noted that the law may still be amended and the period extended in time.

Other questions were directed at how it would be proven that a person was actually affected by the measures against the epidemic and therefore could not pay the rent.

This is a really important ‘detail’. The law says that the tenant shall prove the circumstances to the landlord without undue delay and with certainty corresponding to the available facts by a certificate from the competent labour office of the Czech Republic, to which the tenant must provide supporting documents for the issuance of the certificate, the form and details of which are laid down in the methodological instruction.

The methodological guideline has not yet been issued. However, this procedure no longer seems to be a happy one. For example, the tenant may also be a self-employed person or an artist who has nothing to do with the Labour Office. Paradoxically, it can also be the landlord himself, who rents out one flat and lives off it while renting another. In the Government’s original proposal, there was a general formulation instead of this rule, which would probably have been more logical. If every tenant has to go to the Jobcentre, it would make more sense for the Jobcentre to provide a special benefit to cover the rent. In this way, the state is rather transferring the risk to the landlord, while also creating unnecessary red tape.

Often, clients are interested in whether only the rent or other payments are “deferred”. Here the answer is clear: the prohibition of unilateral termination of the lease during the protection period should apply only to non-payment of rent, not to non-payment of utilities and other services.

An apparent detail was also a recurring question. Can a foreigner apply for a “suspension”? Here, too, the answer is unambiguous. There is no restriction in the law, so foreigners can apply. That is why landlords are afraid that they will not find the foreigner in the apartment after the measure is released and will not collect the debt. Here, however, it is necessary to point out the rule that the landlord has the right to terminate the lease without notice immediately if the tenant declares or otherwise becomes doubtful that he will not pay his debts. However, in the event of a dispute, this would of course be considered by the court, which would decide within a few months at the earliest.

Landlords also ask whether they can avoid “deferment” by entering into a special payment plan with the tenant and, for example, by reducing the rent. Presumably yes, but the agreement has to be really precisely worded. There is a risk that the rent will be reduced and then there will be a “deferral” anyway.

What about fixed-term leases?

Finally, it should be stressed that the specific restrictions only apply to early unilateral termination by the landlord. Thus, if the fixed-term contract expires within the relevant period, the lease normally ends. Also, termination notices given for non-payment prior to March this year are normally valid.

Last but not least, there have been “reverse” questions. Namely, whether a tenant can terminate a fixed-term contract early, even if it is not agreed in the contract, but simply does not need the apartment objectively (cannot work or study in the city). Here, the general rule directly from the Civil Code applies, which provides that a tenant may terminate a fixed-term lease if the circumstances on which the parties apparently based their obligation under the lease contract change to such an extent that the tenant cannot reasonably be required to continue the lease. This seems to be appropriate in today’s totally unpredictable situation, which often resembles the setting of a “B” science fiction film.