2 December 2013
APPLICABLE ON: REAL ESTATE INTENDED FOR THE PERFORMANCE OF COMMERCIAL, INDUSTRIAL OR PRODUCTION ACTIVITIES
Decree No. 602 whereby a temporary protection regime was established for the lessees of real estate intended for the development of commercial, industrial or production activities was published in the Official Gazette No. 40.305 dated November 29, 2013.
Here are the most important components:
- The protection regime is set up temporarily until a “final, just and equitable regime” in the form of a Decree with Force of Law is issued.
- The temporary regime includes premises or establishments where commercial activities are developed, either in residential or office buildings, establishments used for tourism purposes, warehouses, offices, buildings for educational use, buildings used for medical-care centers, shopping centers and, in general, any kind of premises or establishments for the operation or development of economic, commercial, production and service activities.
- The rental fee of the properties subject to the temporary regime, may not exceed a monthly amount equivalent to Bolivars 250/m2.
- An automatic regulation of the rental fees is established in the lease contracts that set higher amounts than the ones stated in the temporary regime. If the rental fees are lower, the amount agreed in the lease contracts is maintained.
- The amount of condominium costs is limited to the 25% of the price of the rental fee.
- Clauses in lease contracts and condominium documents establishing: (i) rental fees in foreign currency, (ii) valuation of assets or intangible value added as reputation and relationships, (iii) periodic adjustments of rental fees, (iv) rental fees or fixed payments based on sales percentages, and (v) penalties, royalties, commissions or payments of any kind other different the rental fee, are deemed without effect.
- It is prohibited: (i) to establish arbitration as dispute resolution method, (ii) to provide for unilateral termination of the contract, (iii) to apply any precautionary measures of sequestration of personal assets or real estate associated with the lease agreement, (iv) the administration of lease contracts by foreign companies.
- The Ministry with responsibility for commercial activities or the designated agency is in charge with settling the disputes arising from the application of this Decree.
- Effective from the date of the Official Gazette.
Please contact María Cecilia Rachadell ([email protected]) or María Angélica Castillo ([email protected]), if you have questions or comments.