On 28 March 2020, the lower chamber of the Polish Parliament (Sejm) enacted an amendment to the Law on Special Measures for COVID-19 and Crisis Prevention (hereinafter referred to as the Amendment). With reference to the real estate business, the following provisions of the Amendment are of particular relevance.

The automatic suspension of rent and service charges when a tenant’s activity in a shopping centre has been banned

The mutual obligations of the landlord and the tenant under lease agreements will expire for the period when the activity in a shopping centre (with an area in excess of 2,000 sq.m.) has been banned.

The tenant should submit an unconditional and binding offer to the landlord to extend the lease term on the same conditions for the period for which the activity has been banned plus six months. The offer should be submitted to the landlord within three months from the date the ban has been lifted. Should the tenant fail to submit the offer within the deadline, the expiration of the mutual obligations for the period when the ban had been in place is no longer binding on the landlord.

Lease term extension until 30 June 2020

Lease agreements that would expire by 30 June 2020 can automatically be extended on the same terms once the tenant has submitted a written statement to the landlord. The tenant's written statement should be submitted no later than on the last day of the lease term.

The tenant can exercise this right provided that the tenant did not breach the lease agreement: by failure to pay at least one rent within the previous half year; or by breaching the terms of the permitted use of the premises during the term of the lease.

Suspension of the landlord’s right to terminate the lease

The landlord is not allowed to terminate the lease agreement or increase the rent until 30 June 2020. This rule applies to lease agreements which were concluded for a fixed time, as well as to those that were subject to termination upon notice.

Possibility to waive or postpone the rent in lease agreements the object of which is a property owned by the State Treasury or a municipality

The landlord of the property, owned by State Treasury or a municipality, can postpone or waive in whole or in part the rent for the properties leased or granted in usufruct – for the period of the state of the epidemic danger and/or the period of the state of the epidemic.

The above concessions can be granted: with respect to State Treasury property by the president or starosta, and with respect to a municipal property by the relevant municipality council, and until a council resolution has been passed by the governing body (wójt, president, or burmistrz).

The waiver of the receivables listed above can be granted upon the motion of an entity, the liquidity of which has worsened as a result of the negative economic consequences of the COVID-19 epidemic.

Extension of the period for the issuance of tax rulings

For the period of the state of the epidemic and/or the state of the epidemic threat, the statutory deadline for issuing a tax ruling has been extended from three to six months, regardless of whether the application for the tax ruling was submitted before or after the new legislation came into force.

No building law restrictions on buildings which will have the function of COVID-19 prevention

For the period of the state of the epidemic and/or the state of the epidemic threat, all buildings which will have the function of COVID-19 prevention, are exempt from restrictions set out in the Building Law, Zoning Law, and the Monument Protection Law

Extension of the deadline for the payment of perpetual usufruct fees

The deadline for the payment of the annual perpetual usufruct fee for the year 2020 has been postponed from 31 March 2020 to 30 June 2020.

Property tax – possibility of tax exemption, or an extension of the payment deadline

Municipal councils can introduce exemptions from property tax for part of the year 2020; or extend, until 30 September 2020, the deadlines for those tax instalments which are payable in April, May, and June 2020 for entrepreneurs whose business activity has been negatively affected due to the COVID-19 crisis.

The Amendment needs to be approved by the higher chamber (the Senat, which might approve it or issue comments) and signed by the President (who has already declared that he will immediately sign the Amendment). The Amendment will be effective as of the date following its publication.

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