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Newsletter June 2020

Legal Updates

Canceled trip: Now What?

Last April 23rd, the Decree Law 17/2020 was published, establishing exceptional measures concerning the tourism sector, in the scope of the COVID-19 pandemic, applicable to travel and reservations made between March 13th and September 30th, 2020.

This diploma applies to undertaken trips organized by travel and tourism agencies, to cancelled reservations in tourist resorts and accommodation establishments and the relations between travel and tourism agencies, tour operators and tourist resorts and local accommodation establishments.

In some respects, consumer’s rights have been strengthened by being granted several rights not expressly foreseen under normal market conditions.

Thus, for instance, travelers may opt for the immediate rescheduling of the trips or for the issuance of a voucher to be used until December 31st, 2021. If it is not used, the traveler is entitled to a refund, which the agency must carry out within 14 days.

With the application of this regime, litigation is expected to arise and the Caiado Guerreiro team is, as always, fully available to assist its Clients.

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How to adapt your business activity to the context of COVID-19?

The Decree-law nr. 20-G/2020, published last may 14th, established a system of incentives – called “Programa Adaptar” – aimed at supporting microenterprises and SMEs in adapting their establishments, work organization methods and relationships with customers and suppliers to the new conditions of physical distance in the context of the COVID-19 pandemic.

This program applies to the entire continental territory and is aimed at micro-enterprises and SMEs from all sectors of activity, including Trade and Services, Accommodation and Catering, Industry and Transport, which have their situation regularized before the Tax Authorities and Social Security.

The support granted under this program takes the form of a non-refundable subsidy, corresponding to the application of the incentive rate (80%) on the value of eligible expenses. Expenses incurred since the declaration of the first state of emergency, on March 18, 2020, can be considered.

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Business Updates

160 million real estate investment

Lisbon and Oporto regions were chosen by Nexity to invest in Portugal. The leading real estate company in France intends to start building affordable housing for the middle class as early as September, with an initial investment of 68 million euros, but which could rise to 160 million.

The pandemic did not stop the French company, which found in our country favorable conditions for a return on the rapid recovery of the economy and the stability of the political options that seem to have placed Portugal in the successful case studies to combat the effects of the coronavirus.

The real estate company’s next idea will be the construction of senior residencies, a product designed not only for the Portuguese market, but also for the international market, since it is known the appetite of foreign citizens to choose Portugal to spend the golden years of retirement.

Facing the disease which changed the world, the diversification of its investment and relying on a stable and serious jurisdiction, will certainly place Nexity as an example of recovery for all companies wishing to resume their normal activity.

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Durable performance contracts in the context of the COVID-19 pandemic

The recently approved Decree-law 19-A/2020 created an exceptional and temporary regime for the financial rebalancing of durable performance contracts to which the State or another public entity is a party, such as public-private partnership (PPP) contracts.

The purpose of this law is to mitigate the negative impacts arising from the decree of the state of emergency under those contracts. However, there is a limitation of the individuals’ rights, who are unable to avail themselves of facts that occurred during the period of the pandemic, due to the suspension, during the duration of the state of emergency (which ended at April 17th), of the provisions that foresee the right to restore the financial balance or to compensation for breach of use in these contracts.

Thus, at present, the rights to redress the financial balance do not give rise to price revisions.

Additional limitations are set in the PPP, seeking to limit losses on both sides.

The provisions of this diploma, except for the specific provisions for the state of emergency, will be in force until the WHO declares the end of the pandemic caused by SARS-Cov-2.

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