In light of several reports that owners of residential and commercial properties are reducing rents due to the Coronavirus, it seems that there is no legal certainty if in situations of Force Majeure, where shops have been ordered to shut down, the right of the lessee not to pay the lessor is triggered automatically.
TVM asked Dr. Hugh Peralta for his legal opinion on the matter.
Lawyer Hugh Peralta explained that in the absence of a specific clause in the lease contract referring to the principle of Force Majeure, then lease payments could not stop automatically.
He explained that in the extraordinary circumstances we find ourselves in and in the event of a dispute between the tenant and the owner of the property, the Court would have to apply the law or fall back on general legal principles.
” I don’t know of any case law which reflects the present circumstances. Neither will you find the answer in the law. You would have to look at Roman law and their legal principles which maintain that when there is a situation such as this the owner bears the brunt .. this principle is referred to as casus sentit dominus.”
Dr Peralta said that if this issue arose in Court, several arguments could be made for and against, as was also alluded to by Prime Minister Robert Abela earlier this week.
“Some people are putting forward the argument that since this is a case of force majeure then once the place has been closed down by the government, rent is not due. This is one legal argument. I will not express my opinion. There are differing views on the matter.”
At the end of the day it is up to the court after a thorough examination of the facts to decide whether the unfortunate chain of events should be extended to the property owner once the extraordinary circumstances were brought about by the government and the tenant not being in a position to pay the owner.”