Legal
11 June 2020

The Parliament approved subsidies for rent

The Slovak Parliament approved on 9 June 2020 an amendment to the Act No. 71/2013 Coll. on granting subsidies by the Slovak Ministry of Economy as amended (the „Amendment“). The Amendment represents one of additional measures taken to reduce the negative implications and adverse financial situation of entrepreneurs – tenants caused by the state restrictions in connection to the spreading disease COVID-19 affecting their activities.

Bruno Gerda
Milina Schifferdeckerová

Subsidies will be based on the Amendment available if:

  1. The rental fee arose from a rental agreement based on which the right to use the rented premises began at the latest from 1 February 2020,
  2. The subject to the rental is a space, in which the tenant sells goods or services to final customers, including service areas and warehouses, or a market place, and
  3. In connection to restrictions aimed at prevention of consequences of spreading the infectious human disease COVID-19   imposed by e.g. health authorities or founders of schools and other school  institutions, the use of premises for the agreed purpose was made impossible by (i) closure of operations, (ii) interruption of teaching in schools and other school institutions or (iii) substantially restricted by the ban of presence of public in the operations.

The tenant will apply for the subsidy via the landlord. The landlord will submit the application for the subsidy in the name of the tenant, but on his own account. 

The application will have to contain a declaration on the compliance with the conditions for granting the subsidy:

  1. The tenant is not in a bankruptcy proceeding or in bankruptcy, or restructuring and the bankruptcy proceedings against him were not rejected due to insufficient assets,
  2. No punishment in the form of a ban on receiving subsidies or subventions was imposed on the tenant, and 
  3. No punishment in the form of a ban on receiving subsidies and support from the EU funds was imposed on the tenant.

If the requested subsidies exceed EUR 100 000 [1], the application will have to contain the information on the ultimate beneficial owner [2]. If the declaration on the fulfilment of the above conditions or the mentioned ultimate beneficial owner will not be true, the tenant will have to return the subsidies.

The state will grant tenants subsidies in the same amount in which the landlord will waive a part of the rental fee, however  up to a maximum of 50 % of the rental fee for the period, during which the tenant could not use the rented premises due to state measures connected to the spreading of the disease COVID—19. The tenants will not receive subsidies for the settlements of services commonly connected to the rent.  If it will not be possible to split the amount of payments for services from the rental fee, for the purposes of calculating the subsidy the rental fee will be reduced by 5 %.

If the landlord for example waives the rental fee in the amount of 30 %, the state will grant subsidies for rent in the same amount. The part of rental fee not covered by the subsidies can the tenant split in instalments due during maximum 48 following months started after the end of the extraordinary situation connected to the spreading of the disease COVID-19. 
If the tenant and the landlord do not agree on the waiver of a part of the rental fee, the tenant will have the right to settle the respective rental fee in equal instalments over a 4-year period starting from the end of the extraordinary situation. 

The applications will be filed electronically using a template that will be published by the Slovak Ministry of Economy on their webpage. 

The changes in the rental agreements made after 12 March 2020 will be disregarded. Also, during the payment of instalments the landlord or his legal successor cannot increase he rental fee if this increase was not agreed before 1 February 2020. 

The amendment was published in the Collection of Laws on 17 June 2020.

[1] Article 2 section. 2 of Act No. 315/2016 Coll. on registry of partners of the public sector as amended.

[2] Article 6a of Act No. 297/2008 Coll. on protection against legalization income from criminal activities and protection against funding terrorism as amended.

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