Call for applications for subsidies under the third "Covid-Rent" programme

UPDATE: The Czech Ministry of Trade and Industry has published another change to the Covid – Rent III programme. Under the amended terms of the programme, businesses whose operations have not been directly restricted by government measures to combat the spread of the pandemic are eligible for the subsidy, provided that they demonstrate a 50% drop in their revenues, instead of the formerly required minimum decrease of 66%.

The Ministry of Industry and Trade of the Czech Republic has launched its third rent-support programme for businesses whose operations have been stopped or significantly limited due to coronavirus-related measures. This programme follows the previous rent-support programmes from last year, on which we reported previously here and here.

Tenants can apply for rent subsidies via a system accessible from the Ministry of Industry and Trade’s website https://aisportal.mpo.cz/AISPortal/default from 22 January 2021 until 22 March 2021.

Under the programme, businesses affected by coronavirus-related measures are entitled to rent subsidies from the state if:

• the tenant has paid at least 50% of the rent that was payable in respect of the period from 1 October to 31 December 2020 before applying for the subsidy;
• the lease agreement was concluded and effective before 1 October 2020.

Under the latest terms of the programme, even businesses whose operations have not been directly restricted are eligible for the subsidy. However, these businesses need to demonstrate at least a 66% fall in their revenues in the last quarter of 2020 compared to the same quarter of the previous year. The fall must be demonstrated in a document verified by a certified accountant, tax advisor or auditor.

The state will give the tenant 50% of the rent from 1 October to 31 December 2020 subject to a cap of CZK 10m per tenant. However, the total subsidy for the entire country is capped at approximately CZK 3bn. Similar to the previous Covid-Rent programmes, applications will be dealt with on a first-come-first-served basis. Hence there is no legal entitlement to the subsidy. As with the second Covid-Rent programme, no rent discount is required from the landlords.

Each tenant’s application for the subsidy must include an affidavit that the tenant:

• has been restricted in its business in the leased premises and qualifies for the subsidy;
• is not in liquidation or bankruptcy;
• waives any further rights in relation to the rent paid in the decisive period it might have against the state as a result of pandemic-related restrictions.

The tenant will also have to submit proof that it paid:

• full rent for at least two consecutive months between 1 July 2019 and 30 September 2020;
• at least 50% of the rent for October, November and December 2020.

The tenant will further need to show an affidavit from the landlord confirming:

• the existence of the lease agreement with the tenant; and
• that the tenant and the landlord are not affiliated.

For more information on the Covid-Rent programme, contact your regular CMS advisor or local CMS experts.