On 19 June 2020, the Ministry of Industry and Trade (MIT) published a Call for Proposals for the COVID – Rent program, and applications for this subvention will be available from 26 June 2020, 9:00 a.m. to 30 September 2020, only online via the information system accessible from the website www.mpo.cz and verification of the applicant’s identity will take place through the NIA – electronic identity (www.eidentita.cz).
General information
COVID – Rent is a special subsidy program and is intended for entrepreneurs who, due to emergency measures, had to temporarily close its premises for retail activities and stop providing services to customers in these premises.
The maximum amount of subvention is CZK 10 million for applicants and the total allocation is CZK 5 billion, which, according to the statement of the MIT, will be increased, if necessary, to cover the applications of all eligible applicants.
The eligible applicant is the tenant who:
- is an entrepreneur (natural or legal person) and carries out business activities on the basis of Act No. 455/1991 Coll., On Trade Licensing or in a similar manner;
- uses an establishment that is not owned by it, under a lease agreement entered into before 13 March 2020, for the retail sale of goods or the provision of services to customers;
- as a result of the emergency measures taken in connection with the COVID 19 pandemic, the government has banned the retail sale of goods or services to customers at its premises for at least part of the period from 13 March to 30 June 2020; and
- is not a related party with the lessor of the premises. For the purposes of drawing subvention under this program, the tenant and the lessor may not be close persons, in the relationship of the controlling and controlled person, persons acting in concert, in a relationship where one of them exercises significant influence over the other or persons who are part of one consolidation unit.
The conditions for granting the subvention differ depending on whether the premises are located in a state-owned building or in a privately owned building.
The conditions for granting subvention related to rent in premises in a non-state building
The conditions are as follows:
- the provision of a discount by the lessor in the amount of at least 30% of the relevant rent. A permissible form of determining the discount is, for example, the conclusion of an agreement or an amendment to the lease agreement between the lessor and the applicant, but always before submitting the subvention application;
- payment of at least 50% of the relevant rent by the subvention applicant. If the payment of rent by the subvention applicant has been postponed on the basis of Act No. 210/2020 Coll., or by an agreement between the subvention applicant and the lessor, the first sentence condition is considered fulfilled if at least 50% of the relevant rent is paid by the subvention applicant, but not later than the day before the application for subvention is submitted; and
- the amount of subvention is 50% of the relevant rent.
The conditions for granting subvention related to rent in premises in a state building
The conditions are as follows:
- lease of an establishment whose lessor and the real estate in which the premises are located is subject to Act No. 219/2000 Coll., on the property of the Czech Republic and its performance in legal relations (i.e. the premises are situated in real estate owned by the state and cannot be provided 30% discount on rent);
- payment of at least 80% of the relevant rent by the subvention applicant. If the payment of rent by the subvention applicant has been postponed on the basis of Act No. 210/2020 Coll., or by an agreement between the subvention applicant and the lessor, the first sentence condition is considered fulfilled if at least 80% of the relevant rent is paid by the subvention applicant, but no later than the day before the application for subvention is submitted; and
- the amount of subvention is 80% of the relevant rent.
What will need to be submitted?
All necessary documents and affidavits will be prepared for the subvention applicant in the information system of the program, the mandatory annexes being:
- affidavit of the tenant that he is an eligible applicant and meets all the conditions of the call;
- affidavit of the lessor with a verified signature that he is renting the premises and provided the applicant with the necessary discount;
- document confirming the payment of rent for the months of January and February 2020. If the rent due date for February and January 2020 did not expire on the day of application, the document confirming the payment of rent for the period October, November, December 2019 can also be provided. If the lease agreement was concluded after 31 January 2020, proof of payment of a proportional part of the rent from the conclusion of the lease agreement until 13 March 2020 may be submitted; and
- a document confirming the payment of a part of the relevant rent for the given premises at least in the amount of the required subvention.
Other obligations and conditions
The obligation to keep the subvention documentation and to allow review will last for 10 years, i.e. similarly to subsidies. The MIT reserves the right to change the conditions of subvention and there is no legal right for the subvention to be provided.
The above is a summary of the most important conditions of the COVID – Rent program, and you can download the full text of the Call for Proposals for the COVID – Rent program from the MIT website (in Czech) here: https://www.mpo.cz/assets/cz/podnikani/zivnostenske-podnikani/2020/6/Vyzva_COVID-Najemne_final_18- 6.pdf.
The subvention will be provided from the announcement of the call until 31 December 2020.
If you have any questions about the topic or COVID programs and measures in general, we are at your disposal.
Mgr. Martin Pospíchal, lawyer – pospichal@plegal.cz
Mgr. Jakub Malek, partner – malek@plegal.cz
24. 6. 2020