Traders, the court decision that changes everything and allows you to no longer pay rents !! – EconomyMorning

In a decision of January 20, the court approved the request for the release of a seizure allocation of rents from the first confinement in the name of “destruction of the rented thing”. If this first becomes a case law, commercial lessors would no longer be entitled to claim unpaid bills for March and April 2020.

It is with this sentence heavy with consequences that this very important article in the newspaper les begins here.

Indeed, a lessor was rejected of his request for payment of rents that a merchant did not pay due to confinement.

The Paris Court ruled to the legal impossibility of operating the leased premises due to a decision by the public authorities during the lease is assimilated to the loss of the leased property defined in article 1722 of the Civil Code. The tenant is therefore released from the obligation to pay the rent during this period ”.

The rent is not payable …

“The lessor relied on article 1722 of the Civil Code, one of the oldest in property law:” if during the term of the lease, the leased item is completely destroyed by fortuitous event, the lease is terminated as of right; if it is only partially destroyed, the lessee may, depending on the circumstances, request either a reduction in the price, or the termination of the same lease. In either case, there is no need for any compensation ”. The judge followed this reasoning and therefore decided that the tenant could not be claimed the payment of his rents during the period of the first confinement ”.

The explosive consequences of such jurisprudence!

I obviously think that we must save as much as possible our fabric of traders and our very small and medium-sized businesses.

The subject of rents to be paid, often very financially heavy, is a real subject.

The problem is that by authorizing the landlord not to pay his rent, what happens?

You report a large part of the losses on real estate, and also the SCPI of which thousands of savers are holders and in which the banks are involved up to their necks.

You transfer the loss to small owners who are generally retired traders themselves and whose rental of the commercial premises to their buyer allows them to have additional income that is generally essential.

You pass the loss on to owners, large or small, natural or legal persons who have credits and who repay these bank loans with the money from the rents collected. It is the great classic of real estate.

If ever the rents were not paid in significant proportions, we could potentially have a cause of financial and banking crisis with chain delinquencies followed by bankruptcies or difficulty in the major sector of SCPIs which are for many SCPIs of commercial real estate.

For the moment, this is only a first-instance decision, subject to appeal, but if justice sets out on this path of non-payment of rents, then it will be necessary to massively help lessors to prevent this from happening. turns into a systemic crisis.

In my opinion, and this is logical, it is not for the lessors to pay rents when the State forces them to be closed, but for the State to compensate and pay the price for its decisions.

It will therefore be necessary to transform the EMPs at least in part into a subsidy to cover commercial rents.

In short, it is a subject, you will understand, economically as sensitive as it is explosive by the chain reaction that this could cause.

Banking crises are always the most expensive to resolve, and they often stem from real estate.

Stay tuned.

It is already too late, but all is not lost. Prepare yourselves !

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