The support agreement for the Retail sector in this Corona crisis – dated 15 April 2020 – mr. K. Bastian

On April 10, 2020, the Ministry of Economic Affairs, together with a
number of landlords, retailers and banks have reached a support agreement with als
main goal to create a distribution of the ‘financial pain’ between
‘retailers (and their shareholders), landlords, banks and government’.

Signatories to the agreement are Detailhandel Nederland, INretail,
real estate organizations IVBN, Vastgoed Belang and VGO and the Ministry of
Economics. The banks are also taking part, through the members of the
commercial real estate committee of ABN AMRO, Deutsche Bank, ING and Rabobank.

The Support Agreement builds on the joint call of the parties
March 24, 2020. The Support Agreement focuses on five pillars:

– A short-term relief for the affected branches;

– A safe store opening and agreements with retail entrepreneurs;

– Transparency regarding the loss of turnover;

– Possible relief in the long term;

– Support from both the government and financiers.

In short, the support agreement comes down to the following: if
retailers during the months of April to June 2020 at least 25%
experience loss of turnover, as a direct result of the Corona crisis, the
possibility to (partially) pay the rent payments for those months
apron.

The suspension applies to a minimum of 50% of the rental price, with the creation
of lighting is paramount. Under the agreement, it is possible to
proceeding to a suspension of 75 to 100%, provided that this is the case in all
reasonableness is also possible for the lessor.

The Support Agreement notes that customization is required for three retailers
is required, provided there is a constructive arrangement on the side
from the retailer. It concerns the following retailers:

– International retailers;

– Retailers with branches and formulas abroad;

– Retailers with an international shareholder.

In the period in which the rent may be suspended, the landlords promise
in turn that they will not resort to evictions. In
to what extent this agreement can really be regarded as an allowance
still the question, since an expulsion is in principle only possible
is after a rent arrears of three months.

Against the promise that the landlords will not leave the shopkeepers
state the obligation of the shopkeepers to promote their business as much as possible
to try not to let the turnover drop too much
to walk.

This maximum effort is even more important because a retailer only has one
can invoke the Support Agreement if there is full and
verifiable transparency with regard to both turnover and respect
of the loss of sales. In any case, the loss of turnover has
relates to the so-called ‘offline turnover’. Online turnover is according to it
Support agreement part of the customization.

After those three months, each retailer, per lessor and/or per location
looked at what the total loss of turnover has been and whether it is possible to recover the
to convert suspension into a ‘possible remission of
payment obligations’; therefore only after the actual impact
of the Corona crisis is clear. How things will work is
not yet clear; this will be discussed in more detail in May.

To whom does the Support Agreement apply? That is not clear
from the agreement. The agreement does state the following: ‘Rental suspension
for as many Dutch retailers as possible who have a drop in turnover of
at least 25% in April-May-June 2020.’

Who falls under the concept of ‘as many Dutch Retailers as possible’?
Looking at the text of the Support Agreement, it should be sufficient
that you are a retailer in the affected sector(s). So one would stand up
be able to state that the Support Agreement applies to all
affected retailers.

In conclusion: the Support Agreement makes it possible for all affected stores
are possible due to the Corona crisis over the months of April to June
rent suspension from a minimum of 50% to a maximum of 100%. Appearance
At the end of May, a further evaluation and elaboration of follow-up agreements between
parties take place. Customization is possible ‘per retailer, per landlord
and/or per location.’ With regard to the rent suspension percentage
taken into account for both parties (retailer and lessor).
proportionality as well as carrying capacity. It is only called upon
right to temporary suspension if (i) there is a
loss of turnover of at least 25% and (ii) this is demonstrably caused by
the corona crisis.

Salient detail in the Support Agreement: it only concerns a ‘gentlemen’s
agreement’. Individual hosts who don’t want to grant a suspension
or retailers refusing to pay the rent due to the Corona crisis
therefore not bound by the Support Agreement.

The Support Agreement does not say a word about the catering industry. Support agreement or not,
the rental problem remains one for all entrepreneurs in this Corona crisis
tricky point.

Would you like more information about what a possible reasonable solution would be
may be in your sector or do you want to know whether you can legally rely on it
contingencies can be done? Then please contact us.

Click here for the published article.

mr. K. Bastiaans – franchise lawyer

Ludwig & Van Dam Franchise attorneys, franchise legal advice. Want
you respond? Go to bastiaans@ludwigvandam.nl