With rising electricity costs and increased interest rates, many companies have had to restructure in recent times. Among other things, bankruptcy petitions have dramatically increased in recent months. As if the legislator had foreseen that these tougher times were coming, a new act entered into force on 1 August this year regarding corporate reconstruction. The new act does not just contain new rules for how reconstructions should proceed, but also regulations concerning lasting agreements – such as rental contracts. But what applies and what do the changes mean for landlords?
The first, and perhaps major, change that the new act entails for landlords is that during a corporate reconstruction a tenant is entitled to terminate rental contracts prematurely with three months notice. If the tenant chooses to utilise the option, the landlord is entitled to compensation for the damage that the premature termination entails. However, the right to compensation is considered to have arisen before the decision on the tenant's reconstruction, which is why claims for damages can encompass a potential debt settlement agreement and there is therefore a risk of impairment.
Another change that will have consequences in the tenancy is that during reconstruction a tenant can request that the rental contract be fulfilled entirely or partially. This means that the landlord is prevented from terminating the contract for the portion that the tenant has requested to be fulfilled. The fact that the tenant has a right to request that the lease contract shall only be partially fulfilled means that the tenant can demand that the lease contract is fulfilled for two years, despite five years of the tenancy remaining. Continued utilisation of a premises after the decision on corporate reconstruction is notified, and where more than a month from the decision has passed, is also tantamount to the tenant requesting that the contract be fulfilled.
In the event that fulfilment of the rental contract is relevant, either through the tenant requesting it or through the tenant's continued use of the premises, the landlord can demand that the tenant provide security for the rent payments. If the tenant does not provide security or pay the rent after requesting that the tenancy shall continue, the landlord is entitled to terminate the contract.
The new legal regulations in the Company Reorganisation Act thus affect rental relationships and, as a landlord, it is therefore important to monitor one's customers' development and, for example, demand advance payment if a tenant requests that a rental contract be fulfilled.
Do you have a tenant that has applied for corporate reconstruction or do you want to be prepared when it happens? Get in touch with Lindahl and we will help you so that everything proceeds as it should.
