On 13 April 2020, the Ukrainian parliament adopted the Law of Ukraine “On the amendment to the Law of Ukraine ‘On the State Budget of Ukraine for 2020’ ”, which amends the transitory provisions of the Civil Code and clarifies the rules on rent reductions for tenants whose businesses have suffered from the quarantine restrictions imposed by the government in response to the COVID-19 pandemic. This State Budget Law went into effect on 18 April 2020.

The Civil Code provides that tenants may claim a reduction of their rental fees if they are not fully able to use their leased property due to circumstances beyond their control. The State Budget Law clarifies that the quarantine measures enacted by the Decree of the Cabinet of Ministers of Ukraine No. 211, “On Preventing the Spread of Coronavirus COVID-19 in Ukraine”, entitle the tenants to claim a rent reduction in the following cases:

• The quarantine measures restrict a certain type of business; or
• The quarantine measures restrict the access of third-party visitors to the leased property.

Thus, tenants may claim a reduction of their rental fees if they are not able to fully use their leased property due to quarantine measures. Please note, that the State Budget Law does not provide for any compensatory measures for landlords granting temporary rent reductions or rent relief to their tenants. Quarantine measures were originally introduced from 12 March until 24 April 2020 and were recently extended until 11 May 2020.

For more information on whether this rental fee reduction applies to your business, contact your regular CMS advisor or local CMS experts: Anna Pogrebna, Sergiy Datsiv, Natalia Kushniruk, Viktor Komziuk. Source: Law of Ukraine “On the amendments to the Law of Ukraine ‘On the State Budget of Ukraine for 2020’ ”

Authors:

Natalia Kushniuk, Counsel, natalia.kushniruk@cms-cmno.com

Viktor Komziuk, Associate, viktor.komziuk@cms-cmno.com

Anna Pogrebna, Partner, anna.pogrebna@cms-rrh.com

Sergiy Datsiv, Associate, sergiy.datsiv@cms-rrh.com