Suspension of business activities: can the company renegotiate the rental of the commercial lease?
The situation that the population of the Distrito Federal is currently experiencing concerning the international pandemic caused by the Coronavirus (COVID-19) is public and notorious, requiring no further details.
To address the public health emergency of international importance resulting from the new Coronavirus, the District Government published Decree No. 40,539, of March 19, 2020, which, in addition to other measures, initially suspended an extensive list of business activities until April 5, 2020.
Such suspension of business activities has occurred since 03/19/2020 under the Decree No. 40,539, of March 19, 2020 and its planned to drag on until 05/03/2020 under Decree No. 40,583, of April 1, 2020, which can be changed without further notice. It is important to note that such suspensions are being carried out by several federal entities in Brazil, in addition to the Distrito Federal, each in its way.
In the meantime, it is observed that several companies in the Federal District have been facing financial difficulties due to the unexpected closings attributed by the Government. It is questioned, however, the possibility of adopting legal measures aimed at rebalancing the contracts signed between these companies strongly affected by the aforementioned Decrees and their creditors.
From the civil contractual point of view, our Consultant, Dr. Rogério Andrade Cavalcanti Araújo makes interesting comments in the following article: "Adjustment of the effects of contracts to the new reality imposed as a result of the COVID-19 pandemic".
In theory, it would be possible to claim the thesis of the theory of unpredictability, the occurrence of force majeure and the principle of preservation of the company in favor of the businessman strongly affected by the Decrees that suspend or limit his or hers activities. Such theses would serve to subsidize an eventual extrajudicial renegotiation with non-labor creditors of the affected businessman.
More than that, if the extrajudicial negotiations do not have the intended effects, it would still be possible to file possible legal claims against each creditor aiming at the temporary rebalancing of the contractual relationships, using the theses described above.
The intended rebalancing, however, may be, for example, the requirement to temporarily reduce the value of the commercial lease with the payment of this difference in installments and at a later time.
It should be noted, however, that there are cases in which the creditor may also be unable to make concessions due to the COVID-19 pandemic. Therefore, the Judiciary goal is even more imperative, balancing the sacrifices of each one based on the criteria of equity.
There are already some precedents in favor of adopting measures that aim to rebalance contractual relations due to the New Coronavirus, for example: the preliminary decision granted in the case file of the case of 1026645-41.2020.8.26.0100 pending before the Court of Justice of São Paulo (TJSP); and the preliminary injunction granted in the case records of process number 0709038-25.2020.8.07.0001 pending before the Court of Justice of the Federal District and Territories (TJDFT).
However, it should be emphasized that this is an atypical situation that still lacks a dominant and peaceful jurisprudential understanding. For this reason, it has the risks inherent to the provision of jurisprudence, that is, the conviction in costs and fees according to the value of the case in case of failure. Since the value of the cause is precisely the value of the economic benefit intended by the party.
In this sense, to prepare a possible judicial suit aiming at a temporary reduction in the rent value, it is necessary to reflect on certain questions and gather the appropriate documentation that corroborates with each situation.
1st question: was there a total or partial impediment to the execution of the company's activities due to the Decree(s)? Partial since when? Total since when?
2nd question: if the impediment was total, what is the activity developed by the company? Is it an activity that cannot be performed in any other way, even partially (for example creating a Delivery segment)?
3rd question: if the impediment was partial, what is the percentage of reduction in revenues? What are the future projections?
4th question: if the temporary reduction in the lease price is not granted, how long would the company use up its financial reserves? In other words, how long would the company go bankrupt?
5th Question: how many employees benefit directly and indirectly from the commercial activity performed by the company here at risk?
Based on the reflections of the above questions, it is possible to establish criteria that could serve as a foundation for the definition of any reduction in the value of extrajudicial or judicial rents.
Precisely to maintain the fairness of legal relations in scenarios that are beyond forecast, such as the one we are experiencing, we realize that such questions may be useful.
For example, if the company's revenues fell by 30% according to accounting evidence, it would be possible, in theory, to justify a temporary reduction in rent in the percentage of 30%.
In the same sense, it could also be possible to negotiate a payment plan from the remaining to the reduced amount. For example, that the remaining amount subject to the reduction be paid in 10 (ten) installments together with the installments falling due after the establishment's reopening.
It should be noted that the presentation of the company's accounting documents in the event of demand judicialization is imperative precisely because the situation of economic fragility due to the suspension of the business activities object of the aforementioned decrees is not presumed, depends on the analysis on a case-by-case basis. of each company. This means that, according to the rules of burden of proof in the process, it is up to the party to prove technically (for eventual expert analysis) and, ideally, simplified (for a better and straightfoward understanding of the judge) the company's financial situation and that, if the intended reduction is not granted, the company faces the risk of not been able to maintain its activities.