Latest measures concerning energy bills, rents and commercial lease charges

In the context of the Covid-19 pandemic, the Government wished to implement measures concerning energy, rent and utility bills. These measures are specified in the Decrees of March 30th and 31st, 2020 and the Ordinance of March 25th, 2020.

Not all companies are eligible.

I - Texts analysis:

Which companies are concerned?

Natural and legal persons of private law exercising an economic activity that are eligible to benefit from the solidarity fund, i.e. those fulfilling the following conditions (extract from Decree no. 2020-371 of 30 March 2020) :

1. They started their activity before February 1st, 2020
2. Their number of employees is less than or equal to ten. (This threshold is calculated in accordance with the terms and conditions provided in the Article L. 130-1 I of the Social Security Code).
3. The amount of their turnover recorded during the last financial year is less than one million euros. For companies that have not yet closed a financial year, the average monthly turnover for the period between the creation date of the company and February 29th, 2020 must be less than EUR 83,333.
4. Their taxable profit plus, where applicable, any sums paid to the director in respect of the activity carried out, does not exceed EUR 60,000 for the last financial year. For companies that have not yet closed a financial year, the taxable profit plus, where applicable, the sums paid to the director is established, under their responsibility, on February 29th, 2020, over their period of operation and reduced to twelve months;
5. Individuals or, in the case of legal entities, their majority manager, did not hold a full-time employment contract or an old-age pension on March 1st, 2020 and did not receive, during the period between March 1st, 2020 and March 31st, 2020, daily social security benefits in excess of EUR 800.
6. They are not controlled by a commercial company within the meaning of the article L. 233-3 of the French Commercial Code
7. When they control one or more commercial companies within the meaning of the article L. 233-3 of the French Commercial Code,
8. the sum of the employees, turnover and profits of the related entities comply with the thresholds set out in 2, 3 and 4.

The concept of turnover is understood as turnover before tax or, when the company reports to the non-trade profits category, as net revenue before tax.

 

They must have in addition:

1°- been banned from receiving the public between March 1st, 2020 and March 31st, 2020;

2°- Or suffered a loss of turnover of at least 70% during the period between March 1st, 2020 and March 31st, 2020, (the 70% has been lowered to 50% announced by the Minister of the Economy)

• Compared to the same period of the previous year;
• Or, for companies created after March 1st, 2019, compared to the average monthly turnover over the period between the creation date of the company and February 29th, 2020;
• Or, for natural persons having benefited from leave for sickness, industrial accident or maternity during the period between March 1st, 2019 and March 31st, 2019, or for legal entities whose managers have benefited from such leave during this period, compared to the average monthly turnover over the period between April 1st, 2019 and February 29th, 2020.

 

Ordinance no. 2020-316 extends the scope to companies in safeguard, receivership or liquidation (based on the communication of a certificate from one of the legal representatives appointed by the judgment that opened these proceedings).

 

What are the measures for the benefit of the targeted companies?

For water, gas and electricity bills:

What is it about? Prohibition for suppliers of suspension, interruption, reduction, contract termination, for non-payment of bills.

Period concerned: From March 25th, 2020 and until the cessation date of the state of health emergency.

How to do it?  The request must be made to the electricity, gas and water suppliers, who cannot refuse to grant a deferral to eligible companies.

The company must:

• Produce a declaration on honor of compliance with the conditions of eligibility and the accuracy of the information declared;
• And present the acknowledgment of receipt of their request for eligibility for the solidarity fund or, when they have filed a payments cessation statement or are in difficulty, when applicable, a filing copy of the payments cessation statement or the judgment to open collective proceedings.

Deadline payment thus deferred shall be spread evenly over the deadlines for bills payment after the last day of the month following the date of the health emergency state end, over a period of not less than six months.

 

For rents and charges:

What is it about? Prohibition of financial penalties or interest for late payment, damages, penalty payments, execution of resolutory clause, penalty clause or any clause providing for forfeiture, or activation of guarantees or sureties, due to non-payment of rent or rental charges.

Period concerned: rents and charges for which the due date for payment is between March 12th and the expiry of a 2 months period after the health emergency state end.

 

 

II - Some recommendations

The company fits within the scope of the beneficiaries mentioned in the texts:

• For energy bills: respect the formalism indicated above;
• For your rent bills: inform your landlord of the decision to defer rent under the emergency law of March 23rd, 2020 in order to deal with the covid-19 epidemic of the Order of March 25th, 2020 and the Decree of March 31st, 2020.

Warning: As the rents have not been cancelled, the rents remain due. The reimbursement terms of the rent remaining due at the end of the confinement are to be negotiated amicably with your landlord.

• Examine bank financing solutions for the rent payment.

The company does not fit into the scope of the beneficiaries described in the texts, but is faced to difficulties to pay the rent:

• Notify your lessor of the difficulties encountered. The parties can negotiate to decide to defer the rent and a spreading plan.
• Examine bank financing solutions on rents;

In the case of difficulty with the lessor in negotiating, other legal avenues should then be explored depending on the drafting of the lease and the situation of the tenant (business subject or not to a closure obligation, business with no cash flow, etc.).

 

 

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