ANDORRA Law and Practice Contributed by: Albert Hinojosa and Marc Ambrós, Cases Lacambra
The tenant is obliged to arrange an insurance policy that covers the risks of fire, explosion, water leaks and civil liability for damages, to sign up for the national electricity company through an electricity journal, to pay taxes related to the economic activity that is going to take place, and to sign up to the trade register. 6.13 Restrictions on the Use of Real Estate The landlord is entitled to terminate the lease agree - ment if the tenant: • changes unilaterally the destination of the leased real estate asset and persists in this action for more than six months during the year; • subleases or transfers totally or partially the leased asset without prior consent from the landlord; • causes harm to the leased asset due to wilful misconduct or gross negligence, or carries out construction works that alter the structural configu - ration of the leased asset or its common elements; • breaches the essential conditions of the lease agreement (or breaches the conditions specifically determined as being essential in the lease agree - ment); or • carries out notoriously immoral, dangerous, annoy - ing or insalubrious activities within the leased asset or when such activities affect the leased asset’s common elements. Furthermore, the leasehold can be terminated by the landlord in case of family repossession as explained in 6.4 Typical Term of a Lease . Lastly, any activity other than residential use shall require correspondent authorisation from the competent authority ( Comú ). 6.14 Tenant’s Ability to Alter and Improve Real Estate Within limits provided for in 6.13 Restrictions on the Use of Real Estate , the tenant may alter or improve the leased asset by carrying out repairs needed due to deterioration through normal or abnormal use. The Urban Rents Law 15/2022 of 23 May 2022 ( Llei d’arrendaments de finques urbanes ) does not thor - oughly regulate the introduction of improvements to the leased asset by the tenant. Thus, there is no obstacle to the tenant introducing improvements to the leased asset, usually subject to the landlord’s
consent. This being said, the tenant must not commit waste (whether it be affirmative, permissive or ame - liorative). In cases of affirmative or permissive waste, the tenant has a duty to repair, and in the case of ameliorative waste, the tenant may be legally asked by the landlord to reinstate the premises to their initial (pre-waste) state. Upon the termination of the lease agreement, the tenant is entitled to revert the improvement works introduced to the leased asset if it can do so without causing harm to the asset. The minimum legal term for commercial leases is four years. However, if the tenant carries out improvement works that result in a cost exceeding the equivalent of three years’ rent, they have the right to require an extended lease term of up to seven years. In this situ - ation, the landlord is obliged to accept this extension. 6.15 Specific Regulations There are no specific regulations and/or laws that apply to leases of particular categories of real estate, such as residential, industrial, offices, retail or hotels, other than the Urban Rents Law, which provides the common regime for residential and commercial leas - es. 6.16 Effect of the Tenant’s Insolvency The Urban Rents Law does not expressly provide for insolvency as a termination cause for lease agree - ments but states that a default in rent payment by the tenant constitutes a termination cause in favour of the landlord and gives in itself sufficient grounds for evic - tion of the tenant. The new Code of Civil Procedure foresees a specific procedure for recovery of due rents and eviction. A declaration of insolvency is not sufficient in itself as a termination cause for the specific lease agreement in case the insolvency situation of the tenant is rap - idly reversed. Generally, Andorran courts may refuse to uphold the termination of a contract based on a breach of obligations, undertakings or covenants, or on a change in circumstances that is merely acces - sory or complementary to the main undertakings, or based on an unreasonable, inequitable or bad faith
26 CHAMBERS.COM
Powered by FlippingBook