As a reminder, Order No. 2020-316 of March 25, 2020 establishes the impossibility for landlords to implement various sanctions in the event of non-payment of rent and rental charges (see our previous newsletters).

Concerning the companies benefiting from this measure, Order No. 2020-316 of March 25, 2020 stated that these measures were applicable to “natural and legal persons governed by private law exercising an economic activity that are likely to benefit from the solidarity fund mentioned in Article 1 of Order No. 2020-317 of 25 March 2020“, while referring to a Decree to be published.

It is now clear, the announced decree has been published.

Indeed, Decree 2020-378 of March 31, 2020 relating to the payment of rent, water, gas and electricity bills relating to the business premises of companies whose activity is affected by the spread of the covid-19 epidemic refers to “natural persons and legal entities under private law that are French tax residents exercising an economic activity, meeting the conditions and criteria defined in 1° and 3° to 8° of Article 1 and in 1° and 2° of Article 2 of Decree 2020-371 of March 30, 2020“.

Consequently, in order to benefit from the above measures, the tenants (natural or legal persons) must fulfil the following conditions (which are cumulative).

1/ First of all, in application of the criteria defined in Article 1 of Decree No. 2020-371 of  March 30, 2020 (points 1 and 3° to 8°), companies must meet the following conditions:

  • 1° The activity must have started before February 1, 2020;
  • 3° Their number of employees must not exceed 10 within the meaning of Article 130-1 of the Social Security Code ;
  • 4° Their annual revenue during the last financial year must not exceed 1 million For companies that have not yet closed a financial year, the average monthly revenue for the period between the date of creation of the company and 29 February 2020 must be less than 83,333 euros;
  • 5° Their taxable profit plus, if applicable, any sums paid to the director, must not exceed 60,000 euros for the last fiscal year ended;
  • 6° Natural persons or, in the case of legal persons, their majority manager, do not hold, on March 1st, 2020, a full-time employment contract or an old-age pension and have not received, during the period between 1 and 31 March 2020, daily social security benefits in excess of EUR 800 ;
  • 7° They are not controlled by a commercial company within the meaning of Article L. 233-3 of the French Commercial Code ;
  • 8° Where the companies control one or more commercial companies within the meaning of Article L. 233-3 of the French Commercial Code, the sum of the employees, turnover and profits of the related entities shall comply with the limits set out in 3°, 4° and 5°.

2/ Then, pursuant to Article 2 of Decree No. 2020-371 of March 30, 2020 (points 1 and 2), companies must :

  • have been the subject of a closure to the public that took place between 1 March 2020 and 31 March 2020
  • OR have suffered a loss of revenue of at least 50 % during the period from 1 to 31 March 2020.

This last condition seems to have been the most debated since the loss of revenue, initially set at 70%, was reduced to 50% by Decree No. 2020-394 of April 2nd, 2020, which amended Decree No. 2020-371 of March 30, 2020 on this point.

 

oOo

 

Finally, Article 2 of Decree 2020-378 of March 31, 2020 states that the persons concerned may produce a sworn statement or receipt of the submission of their application for the solidarity fund to prove that they meet the conditions to benefit from the provisions of Articles 2 to 4 of Order 2020-316 of March 25, 2020.

 

For more information :

#COVID-19 : Can the payment of rent, water, electricity or gas be suspended?

#COVID-19 : The suspension of rents and the law n°2020-290 of March 23, 2020 to face the epidemic

#COVID-19 : The payment of rents (and rental charges) and Order NO. 2020-316 of march 25 2020

Hanan CHAOUI

Partner - Commercial lease and real estate
Hanan Chaoui holds a doctorate in law and specializes in real estate. She assists her clients having leasing disputes with any type of assets and rental relations. She accompanies them on problematics such as eviction compensation and fixing the rent. She conducts audits and analysis of rental conditions as well as drafting and negotiating rental agreements.

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Oriane COHEN

Associate - Real estate & construction law
Oriane Cohen has been a member of the Paris Bar since 2018 and works in real estate law alongside Hanan Chaoui.

She assists her clients in both advisory and litigation work on all aspects of private real estate law.

She is particularly involved in rental litigation on all types of assets and rental relationships.

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