Rent: Questions Without Answers

February 22, 2025 (following the official publication of the Law of the Republic of Belarus dated February 17, 2025, No. 62-Z, hereinafter referred to as the "Law"), changes came into effect regarding the regulation of payments (monetary obligations) under lease agreements.

These changes amended clause 2 of Article 585 of the Civil Code with the following provision:

"In a lease agreement (except for a financial lease (leasing) agreement concluded by the lessor with a legal entity or an individual entrepreneur), the amount of rent and/or other obligations must be expressed exclusively in Belarusian rubles."

! Monetary obligations under lease agreements can only be expressed in Belarusian rubles. This rule applies to:

1. All types of lease agreements and leases of specific types of property, such as:

- Lease of vehicles,

- Lease of capital structures (buildings, structures), isolated premises, parking spaces, or parts thereof,

- Enterprise leasing,

- Financial leasing (including vehicle leasing).

**Exception: Financial leasing agreements concluded by the lessor with a legal entity or an individual entrepreneur;

2. Not only the fixed rental amount in the lease agreement, but also other obligations arising from the lease agreement, including:

- The lessor's expenses (costs) for the maintenance, operation, and current repairs of the leased property,

- Sanitary maintenance,

- Utility payments,

- Security payments, and other related payments.

Important: The changes to the regulation of lease relations have retroactive effect and apply to relationships that arose starting from January 1, 2025.

Current issues:

1) Bringing lease agreements into compliance with new requirements.

According to the Final Provisions of the Law (clause 2 of Article 25), lease agreements concluded before February 22, 2025, are subject to being brought into compliance with the new requirements.

! Exception: financial lease agreements (leasing), regardless of their subject composition.

The legislator excluded this type of lease agreement as subject to being brought into compliance with the new requirements. Accordingly, taking into account clause 2 of Article 392 of the Civil Code, these agreements continue to be valid unchanged until they are terminated due to proper performance or termination.

2) The period for bringing agreements into compliance with new requirements.

The law does not establish a period for bringing agreements into compliance with the new requirements. Accordingly, we should talk about reasonable periods, taking into account the actual circumstances.

However, it should be borne in mind that the fact of failure to amend the agreement is not grounds for not applying the new legislative requirements to the regulated relations. This is confirmed by previous judicial practice.

3) The relationship between the rules on the entry into force of new requirements and their extension to relations arising from a lease agreement.

The legislator has distinguished between the issues of the entry into force of amendments and the extension of new requirements to lease agreements.

According to paragraph 4 of Article 25 of the Law, the amendments made to Article 585 of the Civil Code extend their effect to relations that arose from January 1, 2025.

At the same time, taking into account paragraph 2 of Article 25 of the Law, the new rules on the lease agreement are applicable only to those agreements that are subject to being brought into compliance with the new legislative requirements.

4) Retroactive effect of the law and the continuing nature of legal relations from the lease agreement.

Given the continuing (recurring) nature of the legal relationship under the lease agreement, including the payment of lease payments, when assessing the retroactive effect of the law (the provision on the extension of new requirements to relations that arose from January 1, 2025), it is necessary to distinguish between fulfilled and unfulfilled (subject to fulfillment, overdue) obligations.

Retroactive effect does not apply to obligations that have been properly fulfilled in accordance with the provisions of the lease agreement and the legislation in force at the time of fulfillment.

Unfulfilled (improperly fulfilled) monetary obligations, as well as obligations subject to fulfillment under the lease agreement that arose after January 1, must be expressed and fulfilled only in Belarusian rubles (regardless of the introduction of relevant amendments to the agreement).

5) Determination of the applicable law of a foreign state.

Indeed, the provisions of the Civil Code are applied to lease relations regardless of the composition of the parties, including with the participation of foreign entities, if the applicable law is the legislation of the Republic of Belarus. At the same time, taking into account the general trend of legislative changes aimed at de-dollarization of the economy and strengthening of the Belarusian ruble, as well as the nature of the wording used by the legislator "only in Belarusian rubles", the changes made to the Civil Code can be assessed as super-mandatory norms subject to application regardless of the applicable law.

***

The new lease requirements affected a very wide range of highly demanded and widespread relations, gave rise to a lot of applied questions, the answers to which are based on interpretation. We, as legal consultants, expressed our point of view on some of them and are open to discussion.

At the same time, in order to ensure the stability of lease relations and the legality of the behavior of participants in the relevant relations, the opinion of the regulator on the practical implementation of the new provisions of the Civil Code and their implementation in contracts is important.