Konstantin Boytsov has spoken with RBC about the legal nuances of relationships between tenants and landlords of shopping centres against the backdrop of the coronavirus pandemic

Konstantin Boytsov Senior associate

In St Petersburg, one of the first sectors of the economy that has felt the impact of the coronavirus pandemic has been retail; even those who are now experiencing a surge in sales admit that it will be replaced by a lull. The closure of shopping centres is seen as practically inevitable. As a result, tenants who are deprived of income will ask for the maximum reduction in rental rates, and shopping centres will try to avoid these losses at all costs due their debts.

The key question for many is whether the epidemic can be considered a force majeure. “A decrease in the flow of visitors to a shopping centre due to a pandemic does not give the tenant the right to demand a change in the terms of the lease. A pandemic on the scale officially confirmed to date does not make it impossible for tenants to operate”, explained Konstantin Boytsov, Head of Real Estate and Construction practice at Maxima Legal, to RBC Petersburg. According to the law, force majeure can only be a direct prohibition by state bodies on the operation of shopping centres and not mere recommendations, Konstantin explained. Only in the event of it not being possible to operate would the tenant’s obligation to pay the rent be excluded.

To read the full article (in Russian), please see the RBC Petersburg website >>>