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Can Business Owners Claim for Damages Caused by the Pandemic?

Unlike what happened in other Autonomous Communities, the AC of Catalonia introduced a regulation of business premises rental contracts, through the approval of Decree-Law 34/2020, among the measures adopted in relation to COVID -19.

The application of this rule has led to significant damages to the owners of commercial premises, to the extent that they have had to renounce part of the rent and general expenses agreed in the rental contract, when the activities of the tenants have suffered some kind of limitation, to prevent the spread of COVID-19. A waiver of rent and general expenses that has amounted to 50% of them, when the tenants have been affected by a suspension of their activity. What has happened for long periods of time in Catalonia.

Likewise, by virtue of the Decree-Law, the owners have had to endure unilateral resolutions of the lease contract, without being able to recover the damages that this entailed.

It is logical that the owners of the premises wonder if they should definitely take charge of these losses, or if there could be some way that would allow them to recover the damages suffered. My opinion is that all is not lost and that several legal paths are presented that would allow them to recover the damage suffered. However, they must act quickly if they do not want to lose their chances of recovering from damages.

In the first place, it must be made clear that DL 34/2020 suffers from important doubts of constitutionality, insofar as it can be interpreted that it constitutes an illegitimate interference in the exclusive powers of the State to regulate the bases of contractual obligations.

If the State files an appeal of unconstitutionality, before next 8/22/2021; or any of the judges or courts of the civil jurisdiction question the unconstitutionality of this norm; there would be a certain possibility that the Decree-Law would be annulled as unconstitutional.

In these circumstances, I consider that there would be the possibility of claiming compensation from the Generalitat of Catalonia for the damages suffered as a result of the application of the unconstitutional rule. However, it is not at all clear that this avenue of complaint could be used by all owners - whatever their behavior may have been. In my opinion, it is very likely that the courts required that the owner did not peacefully enforce the statutory provision, but questioned its applicability. Therefore, a strategy with this objective must be established in the civil jurisdiction.

Secondly, in the absence of a declaration of unconstitutionality of the rule, and provided that they act before the next 10/20/2021, the owners have the possibility of claiming compensation from the Executive Council of the Generalitat, for the damages that have been caused to them. caused the application of this normative provision.

Said claim for compensation could be arbitrated through requisition; whereas, in fact, the loss of income and expenses constitutes a special expropriation. Well, there is no doubt that the owners have been deprived of an economic right and that the Forced Expropriation Law contemplates similar assumptions.

Another possible approach would be to claim compensation for the damages suffered, by claiming patrimonial responsibility from the Legislative. Although it is true that the task is legally difficult, I believe that not only the damage and the causal relationship between the latter and the content of DL 34/2020 could be proven; but also the lack of reasonableness and proportionality of the measure -whose regulation is very unfortunate- and that the regulatory legislation of the State of Alarm imposes its compensation.

While it is true that we cannot ensure the viability of any of these claims, since these legal institutions were not conceived to respond to a situation of exceptionality such as the one experienced and there is no precedent whatsoever; There is no doubt that the Courts will manifest themselves by innovating their jurisprudence, since they will have to respond to the claims raised by those who dare to claim.

However, when the response from the courts arrives, it will be too late to claim. In other words: in this case it is not political to wait for the result of the actions of the most daring, since, in the meantime, it will prescribe the opportunity to present any claim. So it must be claimed before 10/20/2021.

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Eva Pich's picture

Partner in charge of the Administrative Law department. Aside from her specialist knowledge of Administrative Law, she is also an expert on the distribution of goods and foodstuffs. She acts as adviser to numerous commercial distributors in their ongoing expansion throughout the Spanish peninsula and also counsels a number of food suppliers. Mrs.Pich has also designed the legal basis of various major public infrastructure projects undertaken by the Catalan government.

As a lawyer, Mrs. Pich tries to empathize with the client's problem - making it his own; And apply all the technical knowledge and experience to design solutions as they are useful. If they exist, if there are none, she is also very frank. "