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Restrictions Across CEE/SEE Countries Affecting the Real Estate Sector

Restrictions Across CEE/SEE Countries Affecting the Real Estate Sector

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In response to the coronavirus outbreak, most CEE/SEE countries have introduced provisions to close certain premises, while only some have banned the termination of leases in order to protect tenants who have lost revenues.

All countries have declared a state of emergency and thus implemented measures to keep open essential retail shops, such as grocery stores and pharmacies, and essential services, such as home delivery and petrol stations. In a few cases, shorter working hours restrict the full operation of such premises. Practically all non-essential shops and services are prohibited, such as restaurants, cafés, bars, wellness centres and the like.

Despite the general prohibition on the operation of these businesses, a ban on the termination of leases affected by such obligatory closures has only been introduced in a few countries. Offices are generally open, with employers being recommended to allow home office, although this is usually not introduced as an obligation. The possibility to claim reduction of the rent is available for the tenants in almost every CEE/SEE country due to their general civil law rules.

The re-opening of the closed premises already started, but the exact timing and scope is still unknown and it will take certainly some months until all restrictions to close certain premises will be lifted.


Besides the general ban on shops, offices may be used for work purposes, while ensuring that a distance of at least 1 m between persons is maintained. Except for some federal states, the use of hotels is generally not prohibited; but they may not be entered for recreation and leisure, just business purposes. A ban on the unilateral termination of leases was introduced for the properties leased in the residential sector, but not for retail premises and office buildings.

Bosnia and Herzegovina and Republika Srpska

A ban on the use of restaurants, food serving businesses, shopping centres and retail shops was introduced, and it is recommended not to utilise services that require close contact, such as cinemas, concerts, hairdressers, dentists, etc. Offices may still be used, but employers are asked to cut and reorganise working hours to limit the number of workers at the same time in one place. Hotels may remain open and serve food only to their guests. No specific ban on the unilateral termination of leases was introduced.


Stores operating in shopping malls are temporarily closed, except for grocery stores and pharmacies. All other shops may operate subject to certain requirements for social distancing and disinfection. There is no ban on the use of offices. Hotels can stay open, but cafés, restaurants, spa and fitness centres within them must be closed. No ban on the unilateral termination of leases was introduced, but practically no enforcement can take place against natural persons during the state of emergency period.


Restrictions on working hours and the number of customers admitted at one time were introduced at essential shops and services, while non-essential ones are prohibited entirely. Offices may still be used, but working from home office is recommended. Hotels can stay open, provided that special health and safety measures are observed. No ban on the unilateral termination of leases was introduced, but governmental measures are expected to protect natural persons and legal entities.

Czech Republic

In addition to the closure of non-essential shops and services, the sale of accommodation services in hotels is prohibited with the exception of sales to persons on business trips and foreigners with valid work permits. The legislator introduced a new act prohibiting landlords from terminating commercial and residential leases if the tenants fail to pay rent.


A restriction was introduced on the opening hours of shops, which may be open from 6 a.m. to 3 p.m. daily. The restriction does not affect stores selling foods and chemicals, and pharmacies. Between 9 a.m. and 12 p.m. only people over the age of 65 may visit the stores, while it is generally recommended to keep at least 1.5 m distance between people. It is prohibited to hold indoor/outdoor musical or dance events, and theatres and cinemas are closed. Offices and hotels may keep open. The legislator introduced a ban on the unilateral termination of leases in certain businesses, such as tourism, catering, leisure, gambling, the film industry, performing arts, event planning and sports services.


Non-essential shops must remain closed and such services are prohibited. Offices may still be used, but leaving home is only permitted for work reasons when the work cannot be done from home. Hotels are closed too. There is no ban on the termination of lease agreements.

Montenegro and North Macedonia

In both countries commercial facilities, bars and other catering establishments are closed. Furthermore, in Montenegro, there is an obligation for owners and tenants to make outdoor furniture inaccessible for use. Food stores and pharmacies remain open in both countries. Offices and hotels may still be used, with restrictions on the provision of hospitality services. There are no measures in place that would prohibit a landlord from terminating a lease agreement.


The activity of retail centres is prohibited, and customers are not allowed to enter the customer areas of stores and restaurants, except for essential shops. Freestanding hardware stores are shut down during the weekends. With respect to offices, working from home is recommended if technically feasible, but is not mandatory. Hotels are not allowed to offer rooms to tourists or for purposes other than renting the rooms to workers or people in quarantine. There is no ban on terminating leases, but in case a lease agreement terminates during the state of emergency, the tenant is entitled to unilaterally prolong the lease term.


Stores operating in shopping malls as well as cafés, bars and restaurants are temporarily closed. All cultural, scientific, artistic, religious, sports, entertainment, gambling, balneary and personal treatment activities performed indoors are suspended. Office buildings and hotels are still open, although the latter are not allowed to keep their restaurants and bars open whereas room service may be offered. Terminating lease agreements is possible, as no general ban has been introduced.


Shopping centres and similar facilities as well as non-essential services are closed. All gambling is prohibited. Offices may still be open, but employers are obliged to allow employees to work from home. Hotels can stay open. There is no ban on the termination of lease agreements.


In addition to the general provision to close non-essential stores, all stores are obliged to close on Sundays to perform a mandatory disinfection of the premises. There is no specific governmental action concerning offices and hotels, except a general ban on opening swimming pools, sporting establishments, wellness centres and entertainment establishments. There is no special ban on the termination of lease agreements or the obligatory renewal of leases.


Essential retail shops and services continue to operate under adjusted working hours and restrictions on the number of customers admitted at one time, whereas non-essential shops and services are closed. Offices may still be used, but hotels, wellness centres and other accommodation and recreational facilities are generally prohibited from operating. All court activities in enforcement proceedings are effectively suspended, but there is no general ban on the termination of lease agreements.


Essential shops can open, while ensuring that a minimum distance of 1.5 m between persons is maintained and that the maximum number of customers at one time does not exceed 10 % of the size of the area. Offices may still be used, and hotels can stay open if health risks can be minimised by certain adequate safety measures. There is an effective ban on termination of leases due to non-payment of rent, as it does not constitute a reason for termination by law.


Non-essential shops as well as restaurants, cafés and similar are ordered to stay closed. Offices may still be used, but the possibility of distance working was generally introduced. Hotels are closed and all public events are suspended. Although no ban on the termination of leases has been introduced, there is an effective three-month payment moratorium for tenants.


In conclusion, we stress that the timeframe for the real estate market to get back on track is very unclear at this stage. What can be said with certainty is that the financial strength and liquidity will be even more important than before. Investors with the financial means at their disposal will be able to secure new transactions, even by achieving a better pricing than their competitors, while investors who are not as liquid must take the risk of depending on the banks.

The possibility to finance and the bankability of each project will be key. The market will turn to projects in which the income volume can be foreseen at least mid-term. At this stage, the residential, logistics and office sectors will remain relatively stable, while retail and hotel investments will be hit. Even in these latter sectors, if one can secure a new product as well as labour capacities on a good price, may realize a higher profit later. Of course, budgets will need to be completely revised and drawn up again.

The pandemic situation caused the governments to intervene in the economy and such measures made a huge impact on all affected industry sectors, also the real estate sector: in the retail sector the e-commerce will develop even quicker, the hotel sector is hit very strongly, in the office sector the competition will be stronger after the crisis as the employers will need to compete even more in ensuring flexible working conditions and the possibility for their employees to work in home office. Last but not least, the residential sector will change due to the fact that the bank financing and the decreasing wages will have a material effect on financial strength of the population.

By Laszlo Krupl, Head of Real Estate, Schoenherr Hungary

Hungary Knowledge Partner

Nagy és Trócsányi was founded in 1991, turned into limited professional partnership (in Hungarian: ügyvédi iroda) in 1992, with the aim of offering sophisticated legal services. The firm continues to seek excellence in a comprehensive and modern practice, which spans international commercial and business law. 

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