A lot has been said and written recently about stores closing due to COVID-19. Many retailers experience payment difficulties regarding the rent, because they often have little to no income. Representatives of the retail and real estate sector and the Ministry of Economic Affairs and Climate reached a support agreement on April 10, 2020 to (re) distribute the financial pain of the COVID-19 crisis. The banks are also part of the agreement via the members of the commercial real estate committee of ABN-AMRO, Deutsche Bank, ING and Rabobank.
The parties involved have agreed to the following in the support agreement:
- Landlords suspend the rent for a minimum of 50% up to a maximum of 100% (depending on the proportionality in size and capacity of the parties) for as many Dutch retailers as possible who have a turnover decrease of at least 25% in April, May and June 2020.
- Landlords and financiers do not make use of lease evictions nor make any claim to bank and / or group guarantees if the parties commit to and comply with the support agreement.
- Landlords and financiers only provide this support if the loss of turnover is directly demonstrably the result of the COVID-19 crisis.
Tenants must:
- make maximum effort for a safe store opening for the purpose of generating turnover from the date yet to be determined within the guidelines of the government;
- refrain from one-sided payment arrangements and commit to rent payments to the extent possible, and in consultation with the landlord.
These agreements relate to the short term and for the time being concern the months of April, May and June 2020. Long-term solutions, such as, for example, cancellation of the (general) payment obligation, will be discussed when the actual impact of the COVID-19 measures is known.
Although landlords are not obliged to comply with the agreement, it does provide guidelines on how parties in the retail sector should deal with the consequences of the COVID-19 crisis. In doing so, the parties involved appeal to landlords and tenants in the retail sector, can reach detailed agreements about the rental obligations in close consultation, keeping in mind that the financial pain must be borne together.
If you have any questions about your reintegration obligations during the Corona crisis, please contact Dominique Fransen. Do you have any other Corona crisis-related questions? Please do not hesitate to contact the Corona crisis advisory team of Valegis Advocatenor your regular contact person at Valegis.
We strive for completeness in our reporting but cannot guarantee this because developments follow each other at a rapid pace. The Dutch government regularly comes up with additions to or improvements of (new) regulations. As a result, our reports may be outdated at the time you read them. That is why we mention the date and time of posting with each message.
