COVID-19 – New restrictions for the Polish real estate sector

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In connection with the dynamically worsening epidemic situation in Poland, on November 6, 2020, the Ministry of Health published a regulation amending the regulation of October 9, 2020 on establishing certain restrictions, orders and prohibitions in connection with the occurrence of a state of epidemic (“Regulation”). The changes introduced by the Regulation will take effect from November 7, 2020 and will last until November 29, 2020.

On the basis of the Regulation, a number of new restrictions were introduced concerning the activity of particular real estate sectors; of most significance were the restrictions concerning hotel and cultural activities and the operation of shopping malls, shopping malls, commercial buildings and retail outlets.

According to the Regulation, the provision of hotel services will be permitted only in the field of hotel operations for employees, for persons using these services as part of a business trip or as part of a journey made in connection with their business activities, or for persons who are medical professionals or patients and their caregivers, if the need to provide them with accommodation results from the conditions specified for their particular healthcare services, or by the athletes using these services at training courses.

Creative activities related to all collective forms of culture and entertainment, movies or video projection in open-air cinemas or any other locations, as well as the operation of film clubs are prohibited. All cultural institutions and libraries are subject to a ban on organizing events and making collections available to the public. In both cases, activities which may be carried out using means of secure distance communication are permitted.

The number of people who are allowed to be present simultaneously within the facilities designated for sales or service activities of an area up to 100 sq. m. has been restricted to a maximum of one person per 10 sq. m. In larger facilities, with an area intended for sale or provision of services exceeding 100 sq. m., a limit of five persons per each checkout desk still applies.

In addition, in shopping malls and commercial (service) buildings, including retail parks, with a sales or service area exceeding 2,000 sq m, the Regulation established a ban on retail trade and service activities, subject to certain exceptions.

Within the scope of the ban on retail trade, commercial areas where the predominant activity consists of selling food and foodstuffs for particular uses, cosmetic products, toiletries, cleaning products, pharmaceutical and medical products, press or books, construction and renovation products, pet supplies, telecommunication services, car and motorbike accessories and fuels are excluded from the above restriction.

Tenants or owners of service premises whose main activity consists in the provision of medical or optical, postal, logistic and delivery and collection of shipments, insurance, banking, hairdressing or beauty services, catering services consisting exclusively in the preparation and delivery of takeaway food, repair of cars or motorbikes, car washes, as well as locksmith, shoemaker, tailor and laundry services are not subject to a ban. The Regulation does not include any provisions indicating that it applies to publicly accessible services, which appears to be an unintended effect.

Additionally, both retail trade and any service activities carried on commercial stands are also banned.

The temporary expiration of obligations arising from the leases, referred to in Article 15ze of the Law of 2 March 2020 on special arrangements for preventing, preventing and combating COVID-19, other infectious diseases and the crisis situations caused thereby, shall apply to premises and commercial stands in shopping malls covered by the ban. In the view of the literal content of aforementioned article, currently it is still debatable whether the temporary expiration of obligations arising from the leases will also apply to the premises located in retail parks, commercial (service) buildings or retail and service buildings (mixed-use).

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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