Since the state of emergency was introduced in Serbia on March 15, 2020, authorities have issued a number of decrees regulating – or, better yet, restricting – certain rights of citizens and industry. However, as the public health situation deteriorates from day to day, authorities must keep up with the situation and respond swiftly to new developments by imposing new restrictions.
Who are the shutters coming down next?
No beauty salons or gambling during state of emergency
In order to prevent the spread of the COVID-19 by minimizing potentially dangerous contacts among members of the public, the Serbian Government amended the Decree on state of emergency measures (“Decree”) on April 1, 2020. The Decree bans the operation of businesses where there is close personal contact between providers and users of those services, as well as contacts between several service users themselves. Specifically, the Decree ordered the closure of hair and beauty salons, fitness clubs and gyms, massage salons and providers of similar beauty and health-related services.
On April 1, 2020 the Government also passed the Decision restricting the facilitation of games of chance (“Decision”). As the Decision’s aim is to limit “close” contact between service providers and service users to contain the spread of the coronavirus, the Decision bans only those games of chance which are organized in closed venues. Put differently, organizing games of chance via telephone, TV, SMS, the Internet or other means of e-communication is still allowed.
What do these new measures mean for the affected business owners?
Having in mind that the Government introduced these new measures to restrict gathering of more people in closed-off spaces, such as gyms, beauty salons or casinos, all business owners will be affected in the same manner – by having to temporarily shut down their businesses.
These bans will surely have adverse financial consequences for the affected business owners, especially when it comes to paying rent for commercial premises leased for carrying on (now prohibited) business activities. The question, thus, arises – are such business owners entitled to rent reduction while “closed”?
As explained in our text on the effects of COVID-19 on lease agreements, business owners of businesses temporarily shut down by Government orders during the state of emergency are entitled to proportionate rent reduction in line with the Contracts and Torts Act. Accordingly, owners of beauty and hair salons, gyms, casinos and other businesses affected by the above Decree and Decision may ask their landlords to reduce the rent while such businesses are closed during state of emergency.
For more information, please contact us via covid19@geciclaw.com.
