The corona epidemic has had a significant impact on the ability of companies to pay. Restaurants and cafes have been closed by the government. Sales at several companies have ceased altogether or shrunk to just a fraction of the earlier one. Several of these companies do business in rented commercial premises.
The fixed-term lease of a business premises is valid for the agreed rental period. The legal practice has imposed a rather severe obligation on the tenant to pay the agreed rent throughout the duration of the contract. An indefinite lease may be terminated after the termination period agreed upon in the contract; at the same time, the obligation to pay rent is terminated.
The Act on the Rental of a Business Premises provides that the tenant may refer the reasonableness of the rent amount to the court for examination (The Act on the Rental of a Business Premises, Section 25). Reduction of rent can also be assessed on the basis of reasonableness provision (The Act on the Rental of a Business Premises, Section 5).
There is a higher threshold for changing the terms of the tenancy of a business premises than when renting a residential apartment, where, again, social aspects can be given bigger importance. This is because, in general, the rental of business premises is about the creation of a business relationship in which both the lessor and the tenant are engaged in business. In such a situation, the court intervenes in the agreement of the parties on the amount of rent only if the unreasonableness is clear (Government proposition to the Finnish Parliament 304/94 p. 115). During the corona epidemic, a situation may arise where the payment of the rent agreed in the lease becomes unreasonable. Any unreasonableness should be assessed on a case-by-case basis.
Matters about the amount of rent, including disagreements, make sense to settle primarily among the parties. Often the interest of both the lessor and the tenant is that the tenant’s business continues and, as a result, the continued payment of rent in the future will also be secured by mutual agreement. In such a situation, parties may agree, for example, to waive rent increases or a periodic rent reduction (Government proposition to the Finnish Parliament 304/94 p. 115).
An action about the reasonableness of the rent amount must be brought to the court during the tenancy (The Act on the Rental of a Business Premises, Section 25).
Attorney office Aasa-Law has handled several legal conflicts over the amount of rent in a commercial apartment, acting as legal counsel to both the lessor and tenant.