Publication date: 25.06.2024
Peculiarities of lease relations and use of premises during the war
Introduction
Military conflicts have a significant impact on all aspects of economic life, including leasing and use of premises. Businesses and individuals face various challenges, such as damage or destruction of property, changes in lease terms, the need to evacuate and adapt to new realities. In this section, we will consider the peculiarities of lease relations and use of premises during the war, including legal aspects, obligations of the parties, possible changes to contracts and recommendations for landlords and tenants.
The main part
Legal aspects of lease relations during the war
Force majeure circumstances
- Definition of force majeure: Military actions, mobilization, blockade, state of emergency may be recognized as force majeure affecting the fulfillment of obligations under lease agreements.
- Documentary evidence: Tenants and landlords should provide relevant documents confirming the occurrence of force majeure (e.g., certificates from the Chamber of Commerce or other competent authorities).
Possibility to change the terms of the contract
- Rent revision: In the event of a significant deterioration in the tenant's economic situation, the parties may agree to reduce the rent or grant a deferral of payments.
- Change of the lease term: Due to force majeure, the parties may agree to extend or shorten the lease term.
Termination of the lease agreement
- At the initiative of the tenant: The tenant has the right to terminate the lease in case of impossibility to use the premises due to military operations or serious damage.
- At the initiative of the lessor: The landlord may terminate the lease if the tenant fails to fulfill its obligations and this is not due to force majeure.
Additional aspects of lease relations during the war
Restoration of damaged premises
Damage assessment
- Expert assessment: Involvement of independent experts to assess the extent of damage to the premises and determine the scope of necessary repairs.
- Documentation of damage: Drawing up damage reports and taking photos for further use in legal and insurance processes.
Repair work
- Planning and organization: Developing a plan for the restoration of the premises, including budget, timeline and responsible persons.
- Financing: Finding sources of financing for the repair work, including own funds, government subsidies, and soft loans.
Performing repair work
- Selection of contractors: Selection of reliable contractors for repair work, taking into account wartime conditions.
- Control over execution: Continuous monitoring of the quality and timing of repair work.
Obligations of the parties in time of war
Lessee's obligations
- Informing the landlord: The tenant is obliged to immediately inform the landlord of any damage to the premises or other circumstances affecting the performance of the contract.
- Payment of rent: The tenant must continue to fulfill its obligations to pay the rent, unless otherwise agreed by the parties.
Lessor's obligations
- Providing the premises in a suitable condition: The landlord is obliged to ensure that the premises are in good condition, if possible in times of war.
- Repair and restoration: In the event of damage to the premises, the landlord must carry out the necessary repairs if it is provided for in the agreement and it is possible to carry out such work.
Possible changes to lease agreements
Amendments to the agreement
- Supplemental agreements: Entering into supplemental agreements to existing lease agreements to address new conditions related to military operations.
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- Written form: All amendments to the contract must be in writing and signed by both parties.
Temporary suspension of liabilities
- The parties may agree to temporarily suspend the obligations to pay rent for the period of military operations or force majeure.
- Suspension of use of the premises: The tenant may temporarily not use the premises without losing its lease rights if it is provided for in an additional agreement to the lease.
Recommendations for landlords and tenants
For landlords
- Flexibility in negotiations: Given the difficult circumstances, it is important to be flexible in negotiating with tenants to change the terms of the contract.
- Support for tenants: Providing support to tenants who have suffered significant losses can help preserve long-term tenancies.
- Property insurance: It is recommended to have insurance for the rented property covering risks related to military operations.
For tenants
- Documentation of circumstances: All events affecting the fulfillment of obligations should be properly documented.
- Interaction with the landlord: Maintaining constant communication with the landlord to resolve current issues and agree on possible changes to the agreement.
- Business insurance: It is recommended to have insurance that covers the risks associated with the loss or damage of property due to military operations.
Government support and recommendations
State support programs
- Subsidies for rent: The state may provide subsidies to cover part of the rent for businesses affected by the hostilities.
- Concessional loans: Providing soft loans to restore damaged premises or relocate businesses to safer regions.
Consultations and legal assistance
- Legal advice: The state and non-governmental organizations can provide free legal advice on lease relations during the war.
- Mediation and arbitration: Involvement in mediation or arbitration processes to resolve disputes between landlords and tenants.
Examples from practice
Cases of successful renegotiation of lease terms
- Negotiating rent reductions: An example of companies that have successfully negotiated with landlords to temporarily reduce rents due to reduced revenues during the war.
- Deferred payments: An example of tenants who received a deferred payment for several months and were able to stabilize their business.
Cases of termination of lease agreements
- Forced termination: An example of tenants who were forced to terminate their lease agreements due to the complete destruction of their premises during the hostilities.
- Payment of compensation: An example of landlords who paid compensation to tenants for early termination of contracts due to force majeure.
Conclusion.
Lease relations and the use of premises during the war require flexibility, mutual understanding and readiness for change on the part of both landlords and tenants. It is important to take into account the legal aspects of force majeure, be prepared to revise the terms of the agreement and seek support from the state and legal advisors.
