Judiciary alters readjustment and reduces tenant rent in the epidemic

The Covid-19 epidemic caused shopping centers to remain closed for a long period of time and gradually resume their activities. The imbalance in store lease contracts has led the Judiciary to admit changes in rent readjustment rates and even a reduction in the correction percentages.

Mall tenants were deeply affected by the Covid-19 epidemic
reproduction

This is shown by two recent court decisions in São Paulo, in favor of store owners at São Bernardo Plaza Shopping, in São Bernardo do Campo, and at Morumbi Shopping, in the south of the capital. In both cases, the plaintiffs were represented by the firm Cerveira, Bloch, Goettems, Hansen & Longo Advogados Associados.

In the case of ABC Paulista, the store owner rebelled against the forecast of rent adjustment based on the General Price Index – Internal Availability (IGP-DI), an index that shot up due to the devaluation of the real and moved away from the market value of the property and inflation.

In December 2020, the cumulative for the last 12 months for the IGP-DI reached 23.14%. The Broad National Consumer Price Index (IPCA) changed by 4.52.

With this, the court of the 9th Civil Court of São Bernardo do Campo granted the request to change the inflation adjustment index provided for in the contract, to the IPCA. Thus, the mall must reimburse any differences that have already been paid in excess.

“Once the unpredictable reason that unbalanced the value of the installment between the time it was established and the implementation of the last adjustment was found, in addition to the mere recomposition of the power of the currency, its pertinent change pursuant to article 317 of the Civil Code, by replacing the IGP-DI by IPCA/IBGE, with the scope of assuring the real value of the contracted installments”, he concluded.

in Morumbi
In the action referring to Shopping Morumbi, the shopkeeper asked for exemption and a reduction in rent due to the epidemic, in addition to replacing the index. The court of the 5th Civil Court of São Paulo concluded that the maintenance of rental values ​​during the closing period of the mall, determined by the state authorities, imposed an excessive burden on the tenant.

Therefore, it determined a 50% reduction in the monthly rent value in the period between December 2020 and June 2021. On the other hand, it denied the request to replace the readjustment index.

“We are not here to exempt or suspend payments at all, but to adapt them to reality because it is not fair to suspend rents for the time that the sanitary measures that impeded the full exercise of the plaintiff’s economic activity lasted, under penalty of transferring them to the defendant the entire consequence of the stoppage, since it also bears with the sharp decrease of its revenue”, says the sentence.

Click here to read the decision of São Bernardo do Campo
Process 1011788-19.2021.8.26.0564
Click here to read São Paulo’s decision
Process 1004974-28.2021.8.26.0002