I. The context of the establishment of Ordinance 2020-316 of March 25, 2020
Law No. 2020-290 of March 23, 2020, concerning emergency measures to deal with the Covid-19 epidemic, notably established a state of health emergency and allowed the Government to adopt, by decree, emergency measures related to the Coronavirus-Covid-19 crisis.
In this context, an order no. 2020-316 relating to the payment of rents, water, gas and electricity bills for the business premises of companies whose activity is affected by the spread of the Covid-19 epidemic has been adopted.
Article 11(g) of the enabling act authorizes the Government to take any measure necessary to:
- To postpone in full or to spread out the payment of rent, water, gas and electricity bills relating to professional and commercial premises,
- And to waive financial penalties and suspensions, interruptions or reductions of supplies that may be applied in the event of non-payment of these invoices, for the benefit of micro-enterprises, as defined in Decree No. 2008-1354 of December 18, 2008, whose activity is affected by the spread of the epidemic.
II. The content of the order
A. Measures taken
Full deferral or staggered payment of rents relating to professional and commercial premises.
If landlords fail to pay rent or related charges for their professional and commercial premises, they will not be able to:
- to apply to the lessee any financial penalty or late payment interest, no damages, no penalty payment, no penalty clause or any clause providing for forfeiture,
- to invoke the execution of the termination clause included in the lease;
- activate guarantees or bonds,
This is notwithstanding any contractual stipulation and the provisions of Articles L. 622-14 and L. 641-12 of the Commercial Code.
The provisions detailed above apply to rents and rental charges whose payment due date falls between March 12, 2020 and the expiry of a period of two months after the date of cessation of the state of health emergency declared by article 4 of the aforementioned law of March 23, 2020.
B. The companies concerned
Natural and legal persons under private law engaged in economic activity who are particularly affected by the economic, financial and social consequences of the prolongation of COVID-19 and the measures taken to limit its spread, are eligible for the solidarity fund , in other words:
- Very small businesses, the self-employed, micro-entrepreneurs and members of the liberal professions with a turnover of less than €1 million and an annual taxable profit of less than €60,000
Which ones:
- were subject to an administrative closure OR
- suffered a 70% drop in revenue in March 2020 compared to March 2019
Natural persons and legal persons under private law who continue their activity within the framework of a safeguard, receivership or liquidation procedure upon communication of a certificate drawn up by one of the judicial representatives appointed under the judgment opening said procedure.
III. Critical Analysis
A. Regarding the measures taken
The enabling order goes beyond the measures initially provided for under Emergency Law No. 2020-290 of March 23, 2020, since it provides, in addition to the full postponement or spreading of rent payments and the waiver of financial penalties and suspensions, interruptions or reductions of supplies that may be applied in the event of non-payment of these invoices, for the impossibility for the landlord to:
- To invoke the termination clause included in the lease;
- To activate guarantees or bonds.
The question of the legality of these measures arises in relation to the enabling law.
B. As for the persons concerned
The enabling order restricts the scope of the measures enacted as envisaged in the enabling law:
- While the law no. 2020-290 of March 23, 2020 provides that the measures taken can be for the benefit of micro-enterprises, that is to say for the benefit of companies which employ fewer than 10 people and which have an annual turnover or a balance sheet total not exceeding 2 million euros;
- The enabling order stipulates that it applies to very small businesses, the self-employed, micro-entrepreneurs and members of the liberal professions with a turnover of less than 1 million euros and an annual taxable profit of less than 60,000 euros
And it extends it, on the other hand, to companies subject to collective proceedings, a priori without any size requirement, the question of the legality of this extension also arises in relation to the enabling law.
