Act No. 177 / 2020 Coll.
Law on certain measures in the field of loan repayment in connection with the COVID-19 pandemic
Valid
Law
Effective from 17.04.2020
Text versions:
17.04.2020
177
THE LAW
of 16 April 2020
on certain measures relating to the repayment of loans related to the COVID-19 pandemic
Parliament has decided on this law of the Czech Republic:
Subject matter
This law regulates certain measures in the field of repayment of loans in connection with the COVID-19 pandemic.
Definition of certain terms
For the purposes of this Act:
(a) credit deferred payment, money lending, credit or similar financial service;
(b) a credit consumer or an entrepreneur to whom a credit has been granted or to whom it has been transferred or who has accepted a debt from the credit thus granted;
(c) to the lender who, as an entrepreneur, has granted the loan to the lender or who has acquired a claim on the loan thus granted.
Scope
(1) This Act shall apply to credit contracted and drawn before 26 March 2020.
(2) This Act shall also apply to a loan agreed before 26 March 2020 if it is a loan
(a) secured by immovable property or immovable property rights;
(b) intended for:
1. the acquisition, settlement or retention of rights in real estate or real estate component;
2. the construction of a real estate or a real estate component;
3. payment for the transfer of a cooperative interest in a housing cooperative or acquisition of a holding in another legal person for the purpose of obtaining the right to use an apartment or family home;
4. change of construction according to the building law or its connection to public networks;
5. reimbursement of the costs of obtaining a loan for one of the purposes referred to in points 1 to 4; or
6. repayment of a loan granted for one of the purposes referred to in points 1 to 6; or
(c) provided by a building savings bank under the Act governing building savings.
(3) This law shall not apply to:
(a) a loan for which the loan was late on 26 March 2020 for more than 30 days with a cash-flow payment;
(b) a loan with which the creditor pension company or regulated entity is under a law governing supplementary supervision in financial conglomerates;
(c) credit for trading in an investment instrument;
(d) an investment instrument, an obligation to which the investment instrument is the object, or an obligation to which a claim of a financial nature arises under the Financial Security Act, which is secured by financial collateral;
(e) a credit framework that can be redrawn after partial or full repayment;
(f) deferred payment if such deferral is not charged and the duration of postponement is not contrary to normal commercial practice;
(g) the lease of a case or lease for which no obligation to purchase the subject-matter of the contract is agreed or any other possibility of acquiring ownership after a certain period of time;
(h) the continuous provision of a service or supply of goods of the same kind for which the creditor may pay in the course of their provision in the form of instalments;
(i) a loan in respect of which a movable item is left to the lender and the lender does not have a right to reimbursement; or
(j) a financial guarantee.
Withdrawal period
The protection period shall run from the first day of the first calendar month following the day on which the credit rating has been notified to the credit rating that it intends to use the protection period,
(a) by 31 October 2020; or
(b) by 31 July 2020, if the credit note indicates that it intends to make use of such a reduced period of protection.
Protection period effects
(1) The length of the protection period is deferred the time of the payment of cash debts lent to the borrower under the credit agreement.
(2) The duration of the credit guarantee is extended by the duration of the protection period.
(3) For the duration of the protection period, the lender shall have the right to interest which, in the case of the lender, is:
(a) the consumer, corresponds to the interest determined at the rate of the repo rate declared by the Czech National Bank plus 8 percentage points, if the interest was not lower,
(b) by the entrepreneur, corresponds to the interest agreed.
(4) The interest referred to in paragraph 3 shall not be remunerated and payable where the credit is
(a) by a natural person, after having completed all the cash debts whose time of execution has been deferred pursuant to paragraph 1, the payment of the credit shall not be counted against that interest until all the cash debts whose time of execution has been deferred pursuant to paragraph 1 have been met; where payment is agreed in instalments, the amount of the payments shall remain unchanged and the duration of the credit shall be adjusted accordingly, unless the credit and lending are otherwise valued;
(b) a legal person, during the period of protection at the time agreed.
(5) For the duration of the protection period, the creditor shall not be entitled to payments other than interest agreed in the credit agreement on an ongoing basis; This does not apply to other ongoing payments in the case of a loan that is a legal person.
(6) Where insurance of the insurance risk related to a credit where it is a lending policy has been agreed, the borrower shall inform the borrower without undue delay of the obligations of the borrower which are linked to the duration of the insurance during the protection period and which the borrower is obliged to comply with during the protection period.
(7) The duration of the protection period shall be extended for the period for which a fixed lending rate has been agreed.
Notification of use of the protection period
(1) The borrower shall notify the borrower of his intention to use the term of protection, in writing or in any other way specified by the borrower for the purposes of this notification. The borrower shall identify at least one readily accessible means of notification according to the first sentence using means of distance communication; if it does not identify or disclose such a method to the credit institution, the notification may be made in any way in which the credit institution has a credit record of the occurrence of the notification.
(2) The notification shall contain a credit rating, a statement that the credit rating intends to use the protection period due to the negative economic impact of the CoVID-19 pandemic on the credit rating and the credit rating of the credit to which the notification relates. If the notification does not contain a credit designation, the notification shall cover all loans between the borrower and the borrower.
(3) Where the notification complies with the requirements referred to in paragraph 2, the lender shall, without undue delay after the notification has been made to the lender, confirm to the lender, in writing or on any other durable medium the receipt of the notification, and within 30 days of the date on which the notification was made, the lender shall communicate to the lender the date of the start and end of the protection period and the amount, number and frequency of payments to be made by the lender after the end of the protection period and the total amount to be paid by the lender. If it does not confirm the receipt of the notification, this shall not affect the running of the protection period.
(4) If the notification fails to comply with the requirements referred to in paragraph 2, the lending without undue delay after the notification has been made to the creditor, which has been credited in writing or on another durable medium of data, shall call for the removal of the defects of that notification.
Transmission of information on the use of protective time to third parties
(1) If it transfers information to a different credit institution from the credit information on any of the effects of the protection period in connection with that credit, it shall be obliged to include information that it is the effects of the protection period under this law.
(2) Where the creditee's ability to repay the debt is assessed or the risk of default by the borrower is assessed, the information transmitted pursuant to paragraph 1 shall not be taken into account.
Payment
No account shall be taken of the remuneration arrangement for acts associated with the use of the protection period.
Prohibition of late payments
From the first day of the first calendar month following the date of entry into force of this Act until 31 October 2020, the crediting authority shall not have the right to payment agreed or determined in the event of default of the debt arising from the credit agreement; This does not apply to a credit default that is a legal person.
Common provisions
(1) The Agreement on the deferral of the time-limit for the execution of a debt loan concluded from 12 March 2020 between the borrower and the borrower due to the negative economic impact of the CoVID-19 pandemic on the borrower ceases to be the first day of the protection period of the legal effects relating to the cash debt due during or after the protection period; the legal effects of such an agreement relating to the cash debt payable before the start of the period of protection remain unaffected.
(2) If a credit institution that is a legal entity that intends to use a protection period, the credit institution is obliged to abstain during the protection period of the management of the property that could serve to satisfy the borrower if it is intended to make substantial changes in the composition, use or designation of the property, or to reduce it not negligible.
Efficacy
This Act shall take effect on the day of its publication.
Vondracek v. r.
Zeman v. r.
Babiš v. r.
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Regulation Information
| Citation | Act No. 177 / 2020 Coll., on certain measures in the field of loan repayment in connection with the COVID-19 pandemic |
|---|---|
| Regulation Type | Law |
| Author | - |
| Collection | Code of Laws |
| Date of Promulgation | 17.04.2020 |
|---|---|
| Effective from | 17.04.2020 |
| Effective until | - |
| Status | Valid |
The regulation text is for informational purposes only.
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