POMIDA TO AP. VESYROPOULO: RENT REDUCTIONS: RESOLVING PENDING PENDING & NEED TO INTERVENTION IN REGULATING PROPERTY SUBLEASES!

With the proposed regulation and application, neither the State will be obliged to pay double compensations, nor the tenants will lose any of their rights, but mainly the landlords will not be deprived without reason of the legal their compensation, solely because they gave the right to sublease their property to their tenant in order to serve him. 

;”>To the Deputy Minister of Finance Mr. Apostolos Vesyropoulos

KOIN.: To the Governor of AADE Mr. Giorgos Pitsilis

>SUBJECT: Rent Reductions: Resolving Backlogs & need to intervene in the regulation of real estate subleases.

Dear Deputy Minister

Knowing and acknowledging your practical interest in solving the problems faced by real estate owners, especially in the midst of a pandemic, from the continued reduction of their rents, we return to our recent letters, to point out that beyond of the need to speed up the corrections and payments of the due compensations to the property owners, the main issues to be resolved immediately are the following:

1. To be allowed to be submitted by the lessors and initial declarations of COVIDfor the period March – October 2020, for non-submission through no fault of theirs, such as indicative late notification by the tenant of the suspension or affected status, etc. but the conditions of the provisions on the one hand are met of the lessee as the victim and therefore of a reduction of the rent and leave it to the person of the lessor for compensation.
2. To accept the out-of-court notificationfor the postponement of taxation of uncollected rents 2020. Related to the contained in from 15.3.2021 our letter proposed addition of a paragraph to article 39 of the CFE.
3. AADE’s rejection messagesshould also explicitly state that “The tenant is obliged to pay the entire rent.” , in order to convince the tenants to pay them.
4. To provide a solution to the problem of compensation for the owners of sublet properties:

Especially in this matter, as the current legislation is worded, it seems that only the sublessee is entitled to a rent reduction and only the sublessee is entitled to compensation, who must pay the owner-lessor the entire agreed rent. However, the sub-lessors, and especially the powerful chains, told the lessors that if the sub-rents are reduced, they in turn unilaterally reduce the main rents, ignoring the fact that the owners are not entitled to state compensation either.

We believe that state support and intervention to be functional and fair to all, but also feasible for the State, must take into account the sequence of leases and sub-leases and be designed and legislated retroactively, based on the following self-evident assumptions:

– Any rate of reduction of the lease is recognized to the sublessee, based on the activity he carries out in the lease to be recognized to the sublessee against the owner on the main lease.

– Any compensation rate on the rent the sublessor is entitled to receive, the lessor is also entitled to it, receiving it from the sublessor, or directly from the State.

Examples of application:

Example A. Rent of €1,000, with a sub-rent similarly of €1,000. a) for a closed business:The sublessee does not pay rent. The sublessor collects €800 as tax-free compensation which he is obliged to pay to the original lessor, also as his tax-free compensation, or else it should be paid directly to the lessor.

b) for an affected business:The sublessor collects €600 rent from the sublessee and €200 compensation from the State, i.e. €800 (of which €600 is taxable) which he is obliged to pay to the lessor also as due and taxable rent. In both cases the sublessor correctly has a zero balance.

Example B. Rent €1,000, with subrent €2,000. a) for a closed business: The sublessee does not pay rent. The sublessor collects €1600 as compensation, but is obliged to pay only €800 to the original lessor, as compensation, or else this amount should be paid directly to the lessor.