Is the rent collected by the government reduced or exempted?

In order to effectively deal with the COVID-19 epidemic, Shanghai has implemented strict management measures. During the epidemic, residents' lives and business operations were greatly affected. Combined with the policy documents issued by the Shanghai Municipal Government to restore and revitalize the economy and the guiding opinions and cases of the people's courts, this paper analyzes the interpretation of policy and legal documents, qualification examination, how to apply for rent reduction and exemption, and the enlightenment to the subsequent operation of enterprises, hoping to help the lessors and lessees of the majority of houses.

I. Overview of rent reduction and exemption policies

According to the Shanghai Action Plan for Accelerating Economic Recovery and Revitalization, which came into effect on June 1 2022, and the relevant guiding opinions and precedents of the people's courts since 2020, the rent reduction and exemption policies are as follows:

1. The rent of small and micro enterprises and individual industrial and commercial households that lease state-owned houses for production and business activities shall be reduced or exempted for a period of six months.

2. For small and micro enterprises and individual industrial and commercial households that lease commercial complexes, commercial buildings, professional markets, industrial parks, innovation bases and other non-state-owned housing owners, rent reduction and exemption are encouraged (with the consent of the lessor), and the period for claiming reduction and exemption is also 6 months. At the same time, the government also gives financial subsidies and tax incentives to owners or business entities who voluntarily reduce or exempt rents: financial subsidies are given according to 30% of the total rent reduction and exemption, with a maximum of 3 million yuan; Reduce or exempt the corresponding property tax and urban land use tax; Guide banks to give preferential interest rate pledge loans and other support to lessors who reduce or exempt housing rents as needed.

There are many market subjects of house leasing, and lessors and lessees involve state-owned enterprises or institutions, private enterprises and natural persons. Moreover, although laws and policy documents stipulate the principle scheme of rent reduction and exemption, there are still many problems in the specific implementation and operation in the face of diversified market entities and complex contractual relations.

The following analyzes how to apply this rent reduction policy from the perspective of the lessor and the lessee for reference.

Relevant policies and regulations

On March 28th, 2022, the State-owned Assets Supervision and Administration Commission of the State Council issued the Notice on Doing a Good Job in Rent Reduction and Exemption for Small and Micro Enterprises and Individual Industrial and Commercial Households in the Service Industry in 2022 (No.29 [2022] issued by the State-owned Assets Supervision and Administration Commission), which stipulated that all central enterprises should, according to the requirements of Document No.271,provide assistance to small and micro enterprises and individual industrial and commercial households in the service industry that were listed as epidemic-prone areas in 2022 in county-level administrative areas (according to the national administrative division standards) Rent for six months in the current year will be reduced or exempted (for areas listed as epidemic-prone areas in the fourth quarter, rent for six months will be reduced or exempted in full in the form of rent withdrawal in the current year or rent reduction in the next year), and rent for three months will be reduced or exempted in other areas.

On May 25, 2022, SASAC of the State Council issued the Notice on Matters Related to Central Enterprises Helping Small and Medium-sized Enterprises to Solve Difficulties and Promote Coordinated Development (Guo Zifa Cai Ping [2022] No.40), stipulating that if the rent reduction policy issued by the local government of the rental house is stronger than the requirements of Document No.29, the territorial policy should be seriously implemented to ensure that the policy is not discounted.

On May 29th, 2022, the Action Plan for Accelerating Economic Recovery and Revitalization in Shanghai issued by the Shanghai Municipal People's Government stipulated that:

(two) to expand the scope of housing rent relief.

4. Small and micro enterprises and individual industrial and commercial households that lease state-owned houses to engage in production and business activities are exempt from proof materials affected by the epidemic, and in 2022, they will be exempted from paying 6 months' house rent. For private non-enterprise units that have difficulties in leasing state-owned houses, in 2022, they will be exempted from six-month rent with reference to small and micro enterprises and individual industrial and commercial households. Promote central enterprises in Shanghai and state-owned enterprises in other provinces and cities in Shanghai to reduce or exempt housing rents for small and micro enterprises and individual industrial and commercial households in accordance with the provisions of our city. In the case of indirect lease, the sublessor does not enjoy this relief policy, and the relevant state-owned enterprises and institutions should ensure that the rent-free measures benefit the ultimate lessee. (Handling method: apply for enjoyment. Responsible units: Municipal State-owned Assets Supervision and Administration Commission, Municipal Finance Bureau, Civil Affairs Bureau, Municipal Economic and Information Committee, Municipal Housing and Urban-Rural Construction Management Committee, Municipal Local Financial Supervision Bureau, Municipal Government Cooperation and Exchange Office, and district governments)

5. Encourage and guide the owners or management subjects of non-state-owned houses such as commercial complexes, commercial buildings, professional markets, industrial parks and innovation bases, and give six-month housing rent relief to small and micro enterprises and individual industrial and commercial households that are finally leased. For qualified non-state-owned housing owners or business management entities, subsidies will be given according to 30% of the total rent reduction and exemption, with a maximum of 3 million yuan, which will be implemented by the district governments. The subsidy funds will be controlled by the total fiscal budget and borne by the municipal and district governments. Restaurant chain enterprises, branches or stores that are seriously affected by the epidemic and registered in Shanghai can be regarded as small and micro enterprises that enjoy housing rent reduction and exemption if they meet the requirements of small and micro enterprises and bear the rent expenses. (Handling method: apply for enjoyment. Responsible units: district governments, Municipal Economic and Information Commission, Municipal Commission of Commerce, Municipal Science and Technology Commission, Municipal Development and Reform Commission, Municipal Finance Bureau)

6. For the state-owned and non-state-owned market entities that reduce or exempt housing rent, adopt non-contact handling and simple operation procedures to reduce or exempt the corresponding property tax and urban land use tax. Guide banks to give preferential interest rate pledge loans and other support to lessors who reduce or exempt housing rents as needed. (Handling method: apply for enjoyment. Responsible units: Municipal Taxation Bureau, Municipal Local Financial Supervision Bureau, Shanghai Headquarters of China People's Bank, Shanghai Banking Insurance Regulatory Bureau)

Second, analyze the rent reduction and exemption policy from the lessor's ("owner") perspective.

Relevant policies and regulations

(1) the Supreme People's Court's "Guiding Opinions on Several Issues Concerning Proper Trial of Civil Cases Related to COVID-19 Epidemic (II)" (Fa Fa Fa [2020]17No.) stipulates that small and micro enterprises, individual industrial and commercial households in service industries, etc. lease the houses of government departments, universities, scientific research institutes and other state-owned enterprises and administrative institutions to operate, and request them to do so because of the epidemic or epidemic prevention and control measures.

(2) The Third Series of Answers on Applicable Laws in COVID-19 Epidemic Cases (Revised Edition, 2022) issued by Shanghai Higher People's Court stipulates that small and micro enterprises, individual industrial and commercial households and other lessees should be supported if they lease state-owned houses for business because of epidemic situation or epidemic prevention and control measures, and the lessors are required to be free of rent within a reasonable period according to relevant policies of Shanghai.

Thirdly, analyze the rent reduction and exemption policy from the perspective of the lessee ("tenant")

Relevant policies and regulations

(1) "Guiding Opinions of the Supreme People's Court on Several Issues Concerning the Proper Trial of Civil Cases Involving the COVID-19 Epidemic (II)" (Fa Fa [2020]17) stipulates: "If a non-state-owned house is rented for business, the lessee has no business income or the business income is obviously reduced due to the epidemic or epidemic prevention measures, and the rent continues to be paid in accordance with the original lease contract, and the lessee requests to reduce or renew the rent.

(2) "Several Policies and Measures of Shanghai to Fight the Epidemic and Help Enterprises Promote Development" stipulates: "Market operators such as large commercial buildings, shopping malls and parks are encouraged to reduce or waive rents for tenants operated by entities on the basis of consultation, and various government support policies give priority to market players who voluntarily reduce or waive rents. For enterprises whose houses and land are urgently requisitioned by the government or voluntarily reduced or exempted from renting real estate rent, if it is really difficult to pay property tax and urban land use tax, the corresponding property tax and urban land use tax may be reduced or exempted. If the rent reduction affects the performance of state-owned enterprises and institutions, it will be determined according to the actual situation in the assessment. "

(3) The Third Series of Answers to COVID-19 Epidemic Cases (Revised Edition, 2022) issued by the Shanghai Higher People's Court points out: "If the lessee rents out non-state-owned houses for business, and the lessee has no business income or the business income is obviously reduced due to the epidemic situation or epidemic prevention and control measures, it is obviously obviously unfair to continue to pay the rent according to the lease contract. If the lessee requests rent reduction, extension or deferment, he may refer to Shanghai's policy on rent reduction and guide the parties to negotiate and mediate; If negotiation and mediation fail, and it conforms to the provisions of Article 533 of the General Principles of Civil Law of People's Republic of China (PRC), the contract can be modified according to the actual situation of the case and the principle of fairness. If the house cannot be used normally due to the epidemic situation or epidemic prevention and control measures, and the lessee requests the lessor to reduce the rent within a certain period of time, it may support it as appropriate. "

4. How to apply for/negotiate rent relief

(A) the process of renting state-owned housing to apply for rent relief

1, qualification inquiry

The lessee may refer to the directory of small and micro enterprises of the State Administration of Market Supervision to preliminarily inquire whether it belongs to small and micro enterprises. If it is not listed in the catalogue, it can be confirmed with reference to the classification standards of small and medium-sized enterprises and financial enterprises. The service industry can be confirmed according to the "Three Industrial Divisions Regulations".

Step 2 submit an application

Eligible lessees can submit a written application for relief to the lessor (which can be submitted or mailed). The following materials shall be provided (with official seal):

(1) application form for rent reduction of state-owned housing;

(2) A copy of the business license and lease contract;

(3) Small and micro enterprises need to provide another copy of the query results of the directory of small and micro enterprises (with official seal). If the query results cannot be provided, other convenient and efficient identification methods can be agreed with the lessor.

Step 3 accept the application

After receiving the application materials for rent reduction and exemption from the lessee, the state-owned housing leasing unit requires to review the lessee's qualifications and standards for rent reduction and exemption.

4, the implementation of relief

State-owned housing rental units shall, after performing relevant procedures, sign a reduction agreement with eligible lessees, and reduce the rent according to the agreement. In cases involving sublease, the state-owned housing rental unit may sign a reduction agreement with the sublessor and the final lessee, and the agreement stipulates that the sublessor will reduce all the rent reduced to the final lessee.

5. Policy advice

State-owned housing rental units are the main body of rent reduction and exemption. Eligible tenants can consult relevant policies and procedures, and if there is any dispute, they can also report the situation to the higher authorities of state-owned housing rental units.

(two) the process of applying for rent relief for renting non-state-owned houses.

At present, the policy does not force lessors of non-state-owned commercial buildings to reduce or waive rent, but only encourages and advocates it. So how to apply for rent reduction to the lessor of non-state-owned housing through consultation? There are two common ways:

1, settled through negotiation

The negotiated settlement includes several schemes:

The rental amount of 1 is appropriately reduced within the range of 1-6 months;

2. Deferred payment of rent;

3 extend the lease term free of charge on the original basis;

Negotiate to terminate the contract and bear less liability for breach of contract.

Because the local government gives financial subsidies and tax incentives to owners or business entities who voluntarily reduce or exempt rents: financial subsidies are given according to 30% of the total rent reduction and exemption, with a maximum of 3 million yuan; Reduce or exempt the corresponding property tax and urban land use tax; Guide banks to give preferential interest rate pledge loans and other support to lessors who reduce or exempt housing rents as needed.

Although there are policy documents to provide incentives for voluntary rent reduction and exemption, because the owners or management subjects of non-state-owned houses have not directly received financial subsidies in advance, and the policy documents are not mandatory, many owners or management subjects of non-state-owned houses may choose to directly refuse rent reduction and exemption in order to avoid unnecessary troubles and possible losses. At this time, the lessee can also negotiate from the perspective of helping the owners apply for financial subsidies and apply for rent reduction and exemption.

During the negotiation, pay attention to keeping written evidence. After reaching an agreement, a supplementary agreement should be signed as soon as possible to determine the plan in writing.

2, litigation or arbitration settlement

If both parties fail to negotiate, the lessee may choose to bring a lawsuit to the court or apply to an arbitration institution for arbitration according to the contract.

1) Conditions that the lessee needs to meet when requesting rent reduction.

Whether the lessee of non-state-owned commercial housing proposes rent reduction or rent exemption depends on two factors: first, whether the epidemic has affected the lessee's normal use of the house, such as the lessee's inability to use the house due to the division of the three districts, or the suspension of production due to the epidemic prevention and control requirements; Second, whether the epidemic has caused great losses to the lessee's operating income, such as the inability to operate normally, the sharp decline in business volume, and the huge gap between operating income and rent. , should be combined with the purpose of leasing and industry type to judge.

In caseNo. (202 1) Shanghai 012, Early Republic of China 2 15 16, Minhang Court held that the house involved was for office use, and the epidemic did not affect the normal use of the lessee, so it did not support the lessee's request for rent reduction. People's Republic of China (PRC) (2020) No.0115. 490 14, the Pudong court held that the purpose of the leased house was to operate the oral medical industry, which was a high-risk industry during the epidemic, and the epidemic would indeed have a great impact on the lessee's operation, so it supported the lessee's request for rent reduction.

2) The evidence that the lessee needs to prepare when suing.

Evidence that the house cannot be used normally: prevention and control documents issued by local government departments, and announcement of the identification of the three districts; Notice of property closure; Dated photos; The application for resumption of production and work is not approved.

Evidence of significant impairment of operating income: bank flow, bill records, tax returns, special audit reports, water and electricity bills, and company internal resolution records.

Note that what is required here is significant impairment, that is, no income or substantial reduction, and the enterprise is not required to have no funds.

3) How much rent can the lessee ask for?

After the epidemic in Shanghai in 2020, the relevant judgment is basically based on supporting the reduction of half rent during the lock-up period, which needs to be combined with case analysis.

In the case of (202 1) Hu 0 1 Minzhong No.5883, Shanghai No.1 Intermediate People's Court halved the rent payable by Ailundi Company in February and March 2020.

Verb (abbreviation of verb) enlightenment: how to avoid such disputes in advance?

In order to avoid the possible problem of commercial housing rent during the epidemic period, it is suggested that the relevant information be agreed in writing when concluding the contract. For example:

1. Adjust the corresponding terms of the contract, and clearly stipulate the terms of force majeure, liability for breach of contract, termination of the contract, etc., such as adding the terms of rent reduction in case of force majeure.

2. Agree on the extension of rent due to epidemic and other reasons, such as exempting interest during the extension period, or agreeing on the longest extension period.

3. Agree to return the house deposit. If the contract needs to be terminated due to force majeure, agree to return the deposit.

The signing of these safeguard clauses for force majeure events such as epidemic situation has greatly reduced the pressure faced by the lessee during the epidemic situation. And in the face of the corresponding disputes, the lessee can directly give priority to the written agreement and take negotiation, arbitration or prosecution as his second way to protect rights.