Up Again Luxembourg: Premises and Workplace

Employment

1. What are the key things that employers have to consider in relation to social distancing in the workplace, e.g. open plan or spacing of desks, use of shared equipment, limited access to communal facilities, canteen / restaurant, etc.?

With regard to offices and office spaces, employers must ensure that employees respect the social distancing of at least 2 m between them and limit, if necessary, the number of employees exposed or likely to be exposed to risks.

This includes communal spaces such as a shared kitchen or lunch room, and spaces like elevators.

If this distancing cannot be ensured, the wearing of masks is mandatory. It must further be worn in all circumstances requiring social interaction.

The employer should inform and train employees on the risks and the preventive measures necessary to prevent the spreading of the virus.

Meetings should be done via video or audio-conference.

Since 29 May 2020, restaurants, bars, and cafés could reopen, including corporate restaurants, while complying with certain obligations applicable inside their establishment and on their terraces:

  • Only seated customers may be served.
  • Ten persons maximum per table, except if they are from the same household.
  • A distance of at least 1.5 meters between each table must be ensured, otherwise a barrier or a separation must be put up.
  • Customers must wear a mask when leaving their table.The wearing of a mask is mandatory for all staff that is in direct contact with the customers.
  • The establishment must close at midnight, exemptions are not possible.

On 19 July 2020, the government adopted a series of measures to combat the COVID-19 pandemic:

  • gatherings of people at home or during events of a private nature, in a closed place or in the open air that accommodate more than ten people are prohibited
  • the law exceptionally allows for any gatherings exceeding ten people present at the same time under the condition that they are seated by observing a minimum distance of 2 m. If the distance of 2 m between seats cannot be respected, the wearing of masks is compulsory; wearing a mask is also mandatory at all times for staff and for participants when not seated
  • penalty of EUR25 to EUR500 for failure to comply with isolation or quarantine measures
  • in the event of a repeat offence, failure to comply with preventive measures committed by shopkeepers, craftsmen, managers or other persons responsible for Horeca activities shall be accompanied by the withdrawal of the establishment permit for three months

2. What key hygiene and/or infection prevention measures will employers have to take to ensure a safe workplace e.g. provision of adequate handwashing facilities, regular deep cleaning of offices, etc.?

Recommendations from the Labor and Mines inspectorate and from the government include that employers should clean office spaces, toilets and any shared spaces at least once a day with a regular cleaning product, and regularly clean frequently touched surfaces (e.g. desks, tables, handles of doors, telephones, computer accessories, pencils).

It is recommended in buildings that are equipped with older ventilation systems (VMC) (i.e. that do not automatically operate with 100% fresh air) to change the settings to 100% fresh air (this change should be made by the maintenance technician).

Other hygiene-related measure include whenever possible keeping paper exchanges to a minimum by using electronic signatures, and not sharing pens.

Real Estate

3. Are there any specific obligations, liabilities or duties of conduct imposed on landlords, tenants or visitors with respect to the use or re-use and decontamination of premises; care, cleaning and maintenance of the exclusive and common areas; reporting requirements and/or measures in case of identified infections; health and safety issues - e.g. recommissioning water systems to avoid virus, installation of plexiglass screens, moving desks to comply with distancing. remodulation of fire prevention strategies (entrance/exit routes)? Is any distinction made between asset classes?

There is no order imposed on landlords from a local, governmental or public health agency or entity to disinfect the property. However, it is market practice for leases in Luxembourg to contain a covenant for the tenant to comply with all applicable legal and statutory requirements.

Typically, however, where tenants are employers, they have a number of obligations regarding the use and decontamination, care, cleaning and maintenance of the exclusive and common areas of the premises. Please see the employment-related questions above, and the People section of these FAQ, for further information.

4. Are there any rent suspension measures and/or stay of recourses and actions (including eviction) or any Government support initiatives such as a furloughed building grant scheme (if so, maybe only a part of the building should be re-occupied)? When rent suspension measures are available, what is the usual payment mechanism and timing agreed to by the parties?

Since 20 May 2020, rent increases for residential accommodation are prohibited until 31 December 2020.

The ability of both parties to reduce the rent due during a crisis and the possibility for the landlord to simply waive the rents remain unchanged.

In a press release dated 23 March 2020, the Luxembourg Confederation of Commerce recommended, as far as possible, that public and private landlords of commercial premises extend payment periods by several months, or simply waive part of the rent due.

The deadlines that apply to the procedure for obtaining subsidised rental housing have been extended until 31 October 2020.

5. Are there specific tax reliefs on payment or collection of rent instalments? Do they apply subject to actual payment or regardless? Do they apply generally or only to specific asset classes?

Tenants and landlords whose incomes have fallen substantially as a result of the current crisis can request housing assistance under certain conditions.

6. Are there any measures regarding relief from the performance of real estate-related contractual obligations?

Eviction deadlines for rental and commercial leases are no longer suspended.

7. Are there any credit facilities in place to mitigate loss of income for landlords?

There are no specific support measures for landlords, but they can apply to receive the financial support measures made available to all Luxembourg companies who have been affected by the COVID-19 epidemic.

8. Is there any relief from loan repayments / enforcement of loans secured against properties?

There are no specific relief measures for this situation. A draft bill no 7556 introduced on 8 April 2020 provides for measures to mitigate the consequences of a loss of liquidity for consumers, households or micro-enterprises that have both:

  • entered into a credit agreement with any credit organisation; and
  • been affected by the pandemic such that they are no longer able to repay their debts within the period covered by this proposal within the original time limits.

9. Are public services necessary to complete the sale, acquisition or other operation of real estate assets or companies or to establish the right to open for business (planning authorities, notary public, Land Registry, Companies’ Registry, etc.)?

Public services are necessary to complete these operations.

Notaries have been declared an “essential business” and therefore continue their activities, including regarding real estate transactions.

10. Are there any specific processes or protocols available to consummate real estate operations enabling them to comply with any required social distancing (e.g. electronic signature, etc.)?

Luxembourg provides for various options to legally execute documents in the context of social distancing.

The use of electronic signatures is, in some circumstances, an appropriate method to remotely sign documents and contracts

The Luxembourg legal framework distinguishes between three types of e-signatures and e-stamps, providing for different levels of security and assurance. The appropriate method of execution will depend on factors such as the governing law of the document, the type of document that is to be signed, the form of electronic signature used and any cross-border implications.

However, only private deeds (actes sous seing privé) can be signed electronically. This therefore excludes documents that require formal notarisation in front of a public officer (actes notariés), such as contracts that concern the transfer of real, tangible property.

The Luxembourg government adopted measures concerning the holding of meetings in companies and other legal persons, to ensure business continuity of Luxembourg companies and other entities in response to the pandemic. Measures apply until 31 December 2020 and include:

  • options relating to the adoption of shareholders' resolutions constituting alternatives to the holding of a physical meeting (participation to general meeting by videoconference, or by proxy or voting by correspondence); and
  • options for members of management body to not be physically present at the registered office for the adoption of corporate approvals.

11. Are contractors who were carrying out works within the premises obliged to resume them? Can building sites reopen when they were closed down? Are there any specific provisions in relation to certain asset classes authorising continuation / resumption of works (e.g. healthcare structures)?

Except in a case of force majeure, the contractors must carry out the works in accordance with the terms of the relevant contract and may therefore be contractually obliged to renew these works.

Since 20 April 2020, the construction sector has gradually resumed operations. The recommendations and COVID-19 safety measures of the ministry of Health must be respected, and additional barrier measures must be implemented.

12. Are there remedies or contractual arrangements available to address impossibility or delay for a party to handover premises to another which are/were to be constructed or refurbished, or for such other party to take over those premises?

Construction sites suspended since 20 March 2020 have gradually resumed since 20 April 2020.

Contracts should be reviewed to assess whether or not performance of the works in question is covered by the rules above.

In the absence of any contractual provisions, courts may well determine that the factual circumstances caused by the pandemic and its consequences (especially regarding the government policies implementing containment and lockdown measures) amount to a force majeure event.

The recognition of a force majeure event relieves the contractor from the performance of the contract until after the event, but it does not terminate the contract as a whole.

The parties may need to consider the impact on clauses providing for liquidated damages in the case of delay of the completion of the project.

A force majeure event generally relieves the party relying on the clause from liability for non-performance. But other factors will need to be considered too, such as modification of existing contracts to cover a longer than expected construction period or an increase in overheads.

When assessing the potential impact COVID-19 on a project, there are broader implications outside the immediate employer/contractor relationship. Both lenders and borrowers should consider whether a construction stoppage constitutes an event of default under a loan agreement (e.g. a failure to meet deadlines). Subcontractors may also face liquidity problems.

13. Has the duration of validity of administrative authorisations pertaining to development/construction of real estate assets (in particular planning authorisations) been extended?

A building permit is, in principle, valid for one year. After this period, it is no longer valid. However, the government has decided to suspend this one-year expiry period during the COVID-19 state of crisis.

This measure is conditional on the building permit not expiring before the start of the state of crisis (i.e. before 18 March 2020).

This suspension also applies to:

  • the three-month time limit during which the public can view the construction plans related to the building permit at the communal authority; and
  • the time limit for objections against the building permit before the administrative courts – the time limit is three months from the day the building permit is posted on the building site.

Litigation and Regulation

14. Is the use of disclaimers for visitors or others coming on to the site of business useful for limiting potential future COVID-19 claims?

The question of liability depends on the factual circumstances in each case, including whether the loss or damage suffered occurred in the performance of a contractual obligation, or whether it occurred outside any contractual relationships between the visitors or others and the business using the disclaimer.

Generally speaking, a business that receives visitors may be considered responsible for their safety and security. As such, disclaimers may not release the business from liability in the event of loss or damage.

However, the majority of Luxembourg case law supports the principle that a person has a duty to mitigate their loss. So the business could be partially released from liability for damage insofar as the person who suffered it could have reasonably mitigated it, for example by wearing a mask.

Disclaimers can be a sensible way to demonstrate the diligence the business is showing regarding steps taken to guarantee the safety of its visitors.

The Luxembourg authorities have ordered that every individual must wear a mask in public places, and businesses must enforce this obligation on their premises. If they fail to do so, they may be held liable, irrespective of the measures they have implemented to inform their visitors of any risks related to COVID-19.