Subsidy for rent payments, applications are now available online

On 9 June 2020, a new type of government subsidy was approved by the National Council of the Slovak Republic. Under the newly approved measure, the state will provide subsidies to cover the payment of rent as a form of government’s response in mitigation of negative economic impact resulting from the adopted emergency measures in relation to preventing the spreading of COVID-19.

This article will provide details on who is eligible and how to apply for the subsidy. As there is no legal entitlement to the subsidy and resources are limited, it is of essential importance that you prepare for submitting of your application as soon as possible.

Rent subsidy: General information

• Rent subsidy is designed for tenants, however, the application is submitted (and simultaneously the subsidy is technically received) by the landlord
• Rent subsidy application must comprise an agreement between both parties on the provision of discount from the rent during the period of hindered usage  – it is not necessary to enter into a separate agreement on the provision of discount
• Anticipated total amount of all provided subsidies is EUR 200 million. Subsidies will only be paid out until the above amount is fully spent; it is therefore of essential importance to apply for the subsidy as soon as possible
• Applications are submitted electronically on the slovensko.sk portal; the landlord and the tenant must activate qualified electronic signature; without a qualified electronic signature, it will not be possible to apply for the subsidy; if you still do not hold an electronic ID, activated electronic signature and a mailbox at slovensko.sk, it is essential to arrange those as soon as possible
• All necessary information can be accessed at www.najmy.mhsr.sk; should you have any questions, you may turn to the ministry’s hotline at najmy@mhsr.sk

Conditions you need to comply with to receive thee subsidy

• The relationship between the landlord and the tenant is regulated by a rental/lease agreement  
• The rent is paid in monetary amounts (i.e. barters, cases of free-of-charge usage etc. are not eligible)
• The right of the tenant to use the subject of the lease arose before 1 February 2020 (the subsidy is not provided to new lease relationships arising after 1 February 2020)
• Usage of the subject of the lease was disabled by forced closing of the property, by interruption of instruction at schools and educational facilities or substantially restricted by the ban on public entry of the subject of the lease (e.g. restaurants which sold meals over-the-counter/walk-through/drive through are eligible since the public entry to the leased premises was still restricted) in relation to the prevention of spreading of COVID-19
• The company must not classify as an undertaking in difficulty; this condition is prescribed by the Temporary Framework of State Aid measures approved by the European Commission. The key condition for an undertaking in difficulty – the undertaking’s equity must exceed 50% of its basic capital as of 31 December 2019.

What premises will be eligible for the subsidy

• Premises where the tenant sells goods or provides services to end consumers (however, these must not be residential premises)
• The property includes the related servicing premises, warehousing, and parking,
• A leased place at a market
• Cinemas, museums, galleries, cultural centres etc.
• Bricks-and-mortar stores of e-shops (although this is a paradox as e-shops significantly gained during the corona crisis in the form of higher revenues; they nevertheless are eligible for the state subsidy on their bricks-and-mortar stores for end consumers).

Please note: The subsidy does not include office spaces.

For what period is the subsidy eligible?

• The subsidy shall be provided for the ‘period of hindered usage’ of the property (period during which the usage of the subject of the lease was disabled by forced closing of the property, disabled by interruption of instruction or substantially restricted by banned entry of the public to the property).
• The period of hindered usage is defined as the period when the establishments were closed by the authorities (the period when the establishments remained closed voluntarily e.g. due to lower number of customers shall not be included in this period)

The above period may differ for the respective establishments depending on the gradual opening of establishments by Slovak authorities.

What is the amount of the subsidy?

• The landlord will provide a discount of 0 % – 50 % from the total rent (based on an agreement between the landlord and the tenant)
• Where the landlord is a state property administrator, the amount of the subsidy shall be fixed as 50% of the original amount of rent negotiated in the agreement
• State subsidy will equal the amount of the provided discount (for the period of hindered usage)
• In case of 0% – 50%, the tenant is entitled to distribute the payable rent not covered by the discount/subsidy in 48 monthly instalments

The subsidy shall not concern the invoiced operating costs, utilities, turnover-based rent, and the VAT (for VAT payers), nor will it concern interest rates, fees, default interest or contractual penalties.

Note for the landlords: the wording of the offer for discount provision must not be conditioned! Where the landlord conditions the provision of discount therefore restricting the right of the tenant to distribute the instalments into 48 months, the process may represent a case of circumventing the law. However, where the landlord agrees with the tenant subsequently – after obtaining of the subsidy – that the tenant will repay the remaining amount of the rent sooner than within 48 months, this process is compliant with the law, as long as the condition of earlier repayment does not represent a condition for the provision of the discount. Maximum amount of the subsidy for the applicant (tenant) by the respective sectors is provided in the table below:

The law does not prohibit subsidies for the cases where the landlord and tenant are related parties: Even in these cases, you may apply for the subsidy. The amount of subsidy provided shall be calculated proportionally considering the period, which the specific measure concerned (more detailed information can be found at https://najmy.mhsr.sk/obdobie.html).

Starting dates for submitting of the applications in the respective regions (the earliest date when the applications can be submitted depending on the registered seat of the undertaking):

The deadline for submission of applications is 30 November 2020.