State not planning on paying rent support to shops

A shopping mall in Estonia.
A shopping mall in Estonia. Source: Siim Lõvi /ERR

The state is not planning on paying rent support to shops closed due to the emergency situation but is encouraging lessors and traders to reach agreement.

Among other proposals sent to the government, the Estonian Traders Association asked for rent support to shops closed because of the emergency situation caused by the outbreak of the novel coronavirus.

According to the proposal, the support should be proportionate to the concessions provided by the owner of the commercial building, that is, if the lessor offers the tenant a 25 percent rent discount, the state would then compensate an additional 25 percent.

"We understand that in a situation where there is no commercial activity or it is significantly reduced, rent obligation is a fixed cost that creates no added value. At the same time, lessors have expenses that might hinder their readiness for temporarily decreasing or stopping rent payments," now former Minister of Foreign Trade and IT Kaimar Karu answered the traders.

The government encourages lessors and traders to reach agreement with the minister adding that during an emergency situation, the rental contract can be terminated before the regular period of notice. According to representatives, shopping centers have started individual negotiations with tenants to temporarily modify their rental agreements, but shopping centers cannot bear the total costs alone.

Due to the emergency situation prompted by the coronavirus outbreak, shopping malls in Estonia have been partially closed from March 27. The only facilities allowed to remain open at shopping centers are food stores, pharmacies, sales outlets of telecommunications companies, bank offices, parcel stations, and stores where technical aids and medical devices issued on the basis of a technical aid card or a medical device card are sold or rented.


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Editor: Anders Nõmm

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