Covid – 19 and lease of business agreements
Termination of the agreement for excessive onerousness rejected
On June 18, 2020, the Court of Rimini rejected an urgency proceeding brought by a tenant of an hotel aimed at inhibiting the enforcement by the lessor of the bank guarantees provided according to the lease of business agreement entered into.
According to the tenant, the enforcement of the bank guarantees by the landlord would have been unlawful since the lease of business agreement should have been terminated pursuant to art. 1467 of the Italian Civil Code (i.e. the general hardship remedy provided for under Italian law).
The tenant’s grounds were based mainly on the fact that: i) the containment measures adopted by the Government in connection with Covid 19 outbreak prevented the tenant from operating the hotel from March 2020 and ii) the reopening of the hotel, having to comply with the hygiene and health rules enacted in the meantime, would have led to a significant reduction in the capacity of the hotel and the disbursement of huge amounts to adopt the security protocols in force.
According to the Court, the temporary nature of the containment measures adopted by the Italian government in March, April and May 2020 in connection with Covid -19 outbreak did not prevent the lessee from resuming its business activity. The above, also considering the relief measures adopted by the Government which tenant may avail of in order to resume its activity. The Court therefore rejected the requests raised by the tenant.
The termination of agreement for excessive onerousness due to Covid – 19 does not appear to be a viable remedy for tenants.
For further information please email to: email@example.com