On 16 October 2020, the Ministry of Industry and Trade (MIT) published the second call for proposals for the COVID – Rent program. The call was prepared in response to the first wave of autumn restrictions on business activities pursuant to the Government Resolution No. 407/2020 Coll. of 12 October 2020. However, it is already clear that the second call will have a much broader impact in connection with other restrictive measures, especially according to the Government Resolution No. 425/2020 Coll. of 22 October 2020. As part of the second call, CZK 3 billion is currently ready for distribution.
In general
The second call of the COVID – Rent program, follows on from the first call, under which it was possible to submit applications under relatively strict conditions until 30 September 2020. The aim of the second call of the COVID – Rent program is to provide support to entrepreneurs operating retail activities or providing services to customers whose operation is now limited by government crisis measures, in particular by closing their establishments to the public.
Basic rules
The state will contribute to entrepreneurs 50% of the basic rent for the third quarter of 2020 under the second call of the COVID – Rent program. The decisive period for which the contribution is provided are therefore the months of July, August and September 2020. By basic rent we mean rent without VAT and any variable components, marketing or turnover surcharges, etc.
Newly, the grant is no longer conditional on a lessor’s discount, which we consider to be a fundamental positive change compared to the first call of the program. This requirement in the first call often prevented the tenant from applying for state support, as it was blocked by the landlord due to his reluctance to participate in the support with a rent rebate.
The support is provided on the basis of a decision on the provision of a subsidy issued by the Ministry of Industry and Trade. However, there is no legal entitlement to the grant.
Amount of the grant
The contribution is paid ex post only after the applicant has paid the rent to the landlord, so the applicant must have the rent for the months of July, August and September 2020 duly paid, at least in the amount of 50%, and this will be documented in the application.
The support will be provided up to a maximum of CZK 10 million per tenant / applicant. Please note that the maximum amount of support in the amount of CZK 10 million from the first call of the program and the second call of the COVID – Rent program does not add up. The release of the funds of approved applications will be possible only after the notification of this second call by the European Commission.
From when and until when is it possible to submit applications?
The application can currently be submitted from 21 October 2020 to 21 January 2021 until 23:59 via the information system accessible from the AIS MIT Portal. Verification of the applicant’s identity will again take place by means of electronic identification, in particular eIdentity, NIA ID, IIG, my ID or via the First Certification Authority. If the applicant has already registered in the system in the first call, a new registration will not be necessary.
Who can apply for the contribution?
Entrepreneurs whose establishments must be closed or whose operations have been significantly restricted in accordance with Government Resolution No. 407/2020 Coll. of 12 October 2020 and according to the Resolution of the Government of the Czech Republic No. 425/2020 Coll. of 22 October 2020, ie, for example, operators of restaurants, cafés, bars, music clubs, cinemas, zoos, perfumery, games rooms, footwear, bookstores, beauty services and other retail and service operators (unless they are covered by the exemptions).
Please note that theatre operators cannot apply for support under the COVID – Rent program, as the COVID – Culture program has been prepared for them.
What are the conditions for granting the contribution?
Applicants for a contribution under the program are not subject to particularly difficult conditions, the fulfilment of which will result in their recognition.
The applicant must be a natural or legal person carrying out business activities and must use the establishment on the basis of a valid lease, sublease or lease agreement concluded with the lessor before 1 July 2020.
It is necessary for the applicant to pay at least 50% of the decisive rent before submitting the application. If the payment of rent has been postponed by the grant applicant on the basis of Act No. 210/2020 Coll., Or by an agreement between the aid applicant and the landlord, the condition is considered fulfilled if at least 50% of the decisive rent is paid by the aid applicant before by submitting an application for support.
For the purposes of drawing support under this program, the lessee and the lessor may not be close persons, in the relationship of the controlling and controlled person, persons acting in concert, in a relationship where one of them exercises significant influence over the other, or persons who are part of one consolidation unit.
The applicant must not be in arrears with payments to selected state institutions and support providers (eg the Czech Social Security Administration, health insurance companies or the tax office).
What documents must be submitted with the application?
The application for a contribution is submitted online via the information system, where the necessary documents and affidavits are prepared for the applicant. All attachments will have to be entered into the system by the applicant himself.
The documents that must be provided include:
- an affidavit by the beneficiary that he is an eligible applicant and fulfils all the conditions of the second call (confirmed electronically when submitting the application);
- an affidavit of the landlord on the existing tenancy relationship (generated within the system and must be signed with an officially verified signature and supported by a scanned or signed electronic signature);
- a document confirming payment of the usual amount of rent for at least two consecutive months from 1 July 2019 to 30 June 2020 (if the lease was concluded after 30 April 2020, a document confirming payment of rent from the conclusion of the lease agreement by 30 April 2020) June 2020. The recommended form of proof of payment is an account statement, confirmation of payment or receipt);
- a document confirming payment of at least 50% of the decisive rent for the given establishment (the recommended form of proof of payment is an account statement, confirmation of payment made or receipt).
If you have any questions, do not hesitate to contact us.
Mgr. Jakub Málek, partner – malek@plegal.cz
Eliška Vetýšková, legal assistant – vetyskova@plegal.cz
27. 10. 2020