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Meet the Law | Law 17/2020, of May 29th

On the 29th of May 2020, the Law 17/2020 was published, and came into force on the 30th of May 2020, making public the first amendments to the exceptional regime regarding the deferment of rents due pursuant to urban lease agreements, approved by Law 4-C/2020 of the 6th of April, within the scope of the measures implemented to face the economic impact caused by the outbreak of COVID-19 disease.

We answered a few questions:

1.   What has changed?

Considering the recent developments of the outbreak caused by COVID-19 disease, the legislator has now, on the one hand, defined the time frame within which non-residential tenants may resort to that exceptional regime and, on the other hand, proceeded with an update of the law so far in force.

Therefore, on balance, two time-limits have been set: September 1st, 2020 as the deadline for the beginning of the debt settlement period under this law, and June 2021 as the deadline for the completion of this settlement period.  

2. Will the debt settlement period be the same for all non-residential tenants?

No. The period for settling debts arising under this law, i.e. the rent or instalments deferred in time, depends on the moment of inability and the consequent deferment.

On the one hand, all those who have resorted to the regime during the period of the state of emergency or the following month (March, April and May), shall begin the settlement in the second month after the term of the state of emergency, i.e. in July 2020.

In this sense, even if they have only deferred the month of April, they can begin the settlement in July.

The remaining ones, i.e. those whose inability to pay rents is observed after this period, shall begin the settlement in the month following the month deferred, always with the deadline of September 1st.

It should be noted that the legislator has also established a deadline for settling all outstanding amounts - June 2021.

3.    What is the amount to be paid each month?

The rent and the amounts deferred under this regime shall be paid in monthly instalments of no less than the result of the division of the total amount of debt by the number of months over which it is to be settled.

This amount shall be paid on top of the rent due for the month in question.

Authors

Luís Abreu Coutinho
Partner
Lisbon
Gonçalo Alçada Batista
Gonçalo Alçada Batista
Trainee
Lisbon