Presentation of Article 14 of Law No. 2020-1379 of November 14, 2020 authorizing the extension of the state of health emergency and laying down various measures for managing the health crisis
The context of the establishment of law 2020-1379 of November 14, 2020
To deal with the Covid-19 epidemic, a new state of health emergency regime was temporarily created in the public health code by the law of March 23, 2020 . It remained in force for almost 16 weeks until July 10, 2020, after being extended by the law of May 11, 2020 . It was on its basis that the general confinement of the country was decided in the spring of 2020.
Given the rebound of the epidemic, this exceptional system was again declared by a decree of October 14, 2020 , from October 17 for one month.
Law 2020-1379 (hereinafter “the Law”) extends the state of health emergency by three months, i.e. until February 16, 2021 inclusive, throughout the national territory. The transitional exit regime from the state of health emergency is also extended until April 1, 2021 . It will thus allow the Prime Minister and the prefects to take certain measures when the state of health emergency has ended.
The Law also authorizes the Government to restore or extend, by means of ordinances, the measures it had taken during the first wave of the Covid-19 epidemic (aid to businesses, partial unemployment, labor law, deadlines procedures and hearings of administrative and judicial jurisdictions).
The Law, in its article 14, provides for a new system intended to protect the lessees of professional or commercial premises in which the activity operated has been affected by an administrative closure decision or by the health restrictions implemented.
Presentation of article 14
The taken procedures
The rents and rental charges relating to professional and commercial premises operated by companies that are administratively closed or whose activity is particularly affected by the health restrictions implemented remain due however , default in payment will not be (immediately) punishable.
This is why the companies concerned cannot :
- incur interest, penalties or any financial measure;
- any action, sanction or forced execution against them for late or non-payment of rent or rental charges relating to professional or commercial premises in which the activity carried out is affected by an administrative police measure.
The text also states that:
- the real and personal sureties guaranteeing the payment of the rents and rental charges concerned cannot be implemented;
- the lessor cannot practice precautionary measures;
- the enforcement proceedings that may have been initiated by the lessor against the tenant for non-payment of rent or due rental charges are suspended.
These provisions are of public order but do not prevent compensation within the meaning of article 1347 of the Civil Code.
The companies concerned
Natural and legal persons under private law carrying out an economic activity affected by an administrative police measure taken pursuant to Article 1 – I, 2° and 3° of Law No. 2020-856 of July 9, 2020 organizing the exit the state of health emergency or article L.3131-15-1 5° of the Public Health Code (administrative closure measure or health restrictions).
The eligibility criteria for the system must be specified by decree, which will determine the workforce and turnover thresholds of the persons concerned as well as the threshold of loss of turnover observed as a result of the administrative police measure. .
If the precise criteria for application are not yet known, we can, as they stand, assume that they will be similar to those set in the framework of the measures taken in March 2020, i.e.:
- companies with less than 1 million euros in turnover, less than 60,000 euros in taxable profits and having a workforce of less than or equal to 10 employees
- businesses forced to remain closed until further notice (non-essential businesses, cafes, bars, restaurants, etc.) or which have suffered a significant loss of turnover (70% in March 2020)
The application of these measures over time
These measures apply:
- Rents and rental charges due for the period during which the company's activity is affected by an administrative police measure.
- Retroactively from October 17, 2020 and until the expiry of a period of two months from the date on which the activity of the company concerned ceases to be affected by the administrative police measure.
Late payment interest or financial penalties will only be due and calculated from the expiry of the aforementioned two-month period.
Critical analysis
While these measures are clearly similar to those taken under Order 2020-316 of March 25, 2020, they nevertheless appear to be even more protective of the interests of lessees whose activity is affected.
The Law indeed provides in an unprecedented way that:
- the lessor can no longer take precautionary measures to guarantee the payment of rents and rental charges from October 17, 2020 until the expiry of a period of two months from the date on which the activity of the undertakings concerned ceases to be affected by the administrative police measure.
- All enforcement proceedings that may have been initiated by the lessor against the tenant for non-payment of rent or due rental charges are suspended.
It remains to be seen whether the impossibility for the lessor to take precautionary measures and to pursue the enforcement measures that it had already taken to recover the "exigible" rents and rental charges only concern the rents and rental charges due from of October 17, 2020 or if they also concern those which had already expired before the entry into force of the system.
In the second case, the lessor's possibilities of action would be truly paralyzed since it would be impossible, throughout the duration of the confinement and up to two months later, to continue to collect its rents and unpaid rental charges, regardless of whether or not they were due prior to October 17, 2020.
Only time will surely bring the expected answers…
