Coronavirus - Government measures in key jurisdictions - Flipbook - Page 27
China
4
5
Contractual
Issues
•
Performance of contractual obligations could be delayed due to the COVID-19
Epidemic. Here is an analysis about if a developer can claim exemption from liability
for the breach of contract arising from a delay in delivering houses on schedule.
What measures
have been taken
to reinforce
contracts?
•
In practice, many developers see epidemics, major public health events, universal
epidemic diseases, governmental policies and decrees relating to construction as
force majeure events, or at least situations where developers are specifically entitled
to postpone the time of delivery as agreed upon in their sales contracts. Thus, based
on the principle of autonomy of will, sellers and purchasers can enjoy and undertake
the rights and obligations to postpone the time of delivery as agreed upon in their
contracts if it is valid.
•
If there is no valid agreement, developers can apply for a force majeure or use the
principle of change of circumstances. However, the legal consequences and outcome
of such a declaration will be determined on a case-by-case basis.
•
Special Series regarding the Legal Impact of the COVID-19 Epidemic on the Real
Estate Industry. Topic One: the impact of the COVID-19 epidemic on the sale of
commodity housing.
Property
Have any
changes been
made to the
laws around
property,
rent and
enforcement?
Some local governments have introduced support and guidance policies for enterprises
affected by the COVID-19 Epidemic, which also include the adjustment of lease
agreement relationships. For instance, the Municipal Government of Beijing issued
Several Measures on Dealing with the Impact of COVID-19 Epidemic and Promote
the Sustainable and Healthy Development of Medium, Small and Micro Enterprise
on February 5, 2020. According to those measures, for medium, small and micro
enterprises which rent properties from city-owned or district-owned enterprises:
•
the rent in February shall be exempt if such enterprises (i) rent properties for the
purpose of manufacturing or operations; (ii) keep operating or stop operating in
accordance with the policies for the prevention and control of the Epidemic; and (iii)
do not lay off employees or only lay off few employees,
•
the rent in February shall be reduced to 50% of the original amount if such
enterprises rent properties for office work,
•
it is encouraged that landlords (property owners) reduce or exempt the rent of other
leased properties, which is subject to the negotiation of the contract parties, and
•
for landlords that reduce or exempt rent for medium, small and micro enterprises,
the municipal or district government would provide subsidies.
Although the policies above are only applicable to qualified “small, medium and micro
enterprises”, it may also act as a guide for other leasing parties.
•
Special Series regarding the Legal Impact of the COVID-19 Epidemic on the Real
Estate Industry. Topic Three: the impact of the COVID-19 epidemic on property lease
agreements.
Government measures in key jurisdictions
27