Measures to support tenants of state property in Russia

07/07/2020
Measures to support tenants of state property in Russia

In addition to the previously analyzed by SCHNEIDER GROUP general measures to support tenants of buildings and premises, including those that are privately owned (as we described earlier), special types of state support are provided for tenants of state property.

Some measures were introduced at the federal level (in particular, Decree of the RF Government No. 670-r “On the deferral of lease payments under federal property lease agreements for small and medium-sized enterprises (SMEs)” dated March 19, 2020 (with amendments and additions) and Federal Law No. 98-FZ “On amending certain legislative acts of the Russian Federation on the prevention and control of emergencies” of 01.04.2020 (hereinafter – “Law 98-FZ”). The authorities also approved a number of measures to support tenants of state property on the regional level (in particular, in Moscow the supportive measures were established by Moscow Government Decree № 212-PP dated 24.03.2020 “On measures of the  economic support in the regime of high alert”).

Below we systematize these types of support based on whether the tenant has got the SME status or not, as well as its field of activity (in particular, whether the tenant conducts activities in one or several sectors of the Russian economy that have been most affected by the deterioration of the situation as a result of the spread of a new coronavirus infection in accordance with the List approved by the Decree of the Government of the Russian Federation of April 3, 2020 No. 434).

1) The tenant of the affected industry, having the status of SME

a) renting the federal property from the State Treasury (including plots of land) is entitled to get:

  • exemption from the rent payments from April 1, 2020 until July 1, 2020 (the 2nd quarter of 2020) and
  • deferral of the rent payment for the 2nd and 3rd quarter 2020 (until 01.01.2023).

b) renting the federal property assigned to federal executive authorities, state enterprises and institutions, is entitled to get:

  • deferral of the rent payment for the 2nd and 3rd quarter 2020 (until 01.01.2023);

c) renting the state or municipal property and having concluded the contract for the sale of the leased immovable property in installments prior to the introduction of high alert or emergency regime in the region has the right to:

  • demand from the landlord to conclude an additional agreement to the agreement for deferring the payments stipulated by the agreement in 2020 for a period of up to one year (without interest and penalty charges).

2) The tenant of the affected industry which does not have SME status

a) renting the federal property is entitled to get:

b) renting objects of the non-residential property of Moscow is entitled to get:

  • exemption from rental payments for the period of suspension of tenant’s activities in the field of culture, sports, exhibition, entertainment, educational activities, leisure and social educational work with the population for the period of temporary suspension of activity in accordance with Decree of the Mayor of Moscow No. 12-UM dated March 05, 2020,
  • exemption from rent payments from March 1, 2020 until the termination of the regime of high alert, but not earlier than 01.07.2020, for a tenant operating in the field of public catering, trade, provision of household services to the population, tourism and hotel services (including in relation to leased land plots owned by the city of Moscow or unallocated state property located in Moscow).

3) The tenant not from the affected industry, having the status of SME

a) renting the federal property from the State Treasury (including plots of land) is entitled to:

  • deferral of the rent payment for the 2nd and 3rd quarter 2020 (until 01.01.2023);

b) renting the state or municipal property and having concluded the contract for the sale of the leased immovable property in installments prior to the introduction of high alert or emergency regime or in an emergency situation in the region is entitled to:

  • demand from the landlord conclusion of an addendum to the agreement for deferring the payments stipulated by the agreement in 2020 for a period of up to one year (without interest and penalty charges).

Law 98-FZ also establishes the right of tenants of state or municipal land plots to demand from the landlord conclusion of an additional agreement to the lease agreement to increase the lease term for the corresponding land plot without bidding for the duration of the initial lease agreement (but not more than three years). With regard to other state property (in addition to plots of land), the tenant has the right to demand the extension of the lease without bidding for up to one year on the same terms.

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