On April 1, Royal Decree-Law 11/2020, of March 31, was published, which adopts additional urgent measures in the social and economic sphere to confront COVID-19.
The twelfth Final Provision indicates that the measures envisaged will remain in force until one month after the end of the term of the declaration of the state of alert, except for those measures which have a specific period of duration that will be subject to same, notwithstanding the fact that the Government may, after evaluating the situation, extend the term.
Among the various measures adopted, we will highlight those aimed at allowing families who are in a proven situation of economic vulnerability as a result of the crisis caused by this pandemic COVID-19 to make their rental payments on their main residence.
Law 29/1994, of November 24, on Urban Leases
The measures are intended for lessors and lessees who have signed a main residence lease agreement in accordance with the provisions of Law 29/1994, of November 24, on Urban Leases and meet a series of requirements that we describe below:
The lessor must be a company, public housing entity or large holder. A natural or legal person who has more than ten urban properties, excluding garages and storage rooms, or a constructed area of more than 1,500 m2 is considered a large holder.
The lessee must be in a situation of economic vulnerability as a result of the health crisis caused by COVID-19.
In order that said economic vulnerability be understood as existing, the concurrence of the following requirements will be necessary:
a) That the lessee becomes unemployed, through a Temporary Employment Regulation File (ERTE), or has reduced his workday due to care of others or himself ,in case of being a businessman or entrepreneur , or other similar circumstances that imply a substantial loss of income and do not reach or exceed therefore the total income of the members of the family unit, in the month prior to the request for the moratorium, in general, the limit of three times the monthly Multi-Effect Public Income Index (IPREM). This limit will be increased for each child, person over 65 or person with a disability. The IPREM for the year 2020 is 537.84 euros.
b) That the rental income, plus basic expenses and utilities (gas, water etc), is greater than or equal to 35% of the net income received by all the members of the family unit.
It is considered that there is no economic vulnerability in a situation where the lessee or any of the people who make up his family unit is the owner or usufruct of a house in Spain.
The lessee must prove economic vulnerability to the lessor in the terms provided in article 6 of this Royal Decree-law.
Request for deferral or total or partial cancellation of the rent
The lessee must request the lessor, within one month from the entry into force of the aforementioned Royal Decree-law, the temporary and extraordinary deferral in the payment of rent, unless this deferral has already been achieved by agreement of the parties.
In the absence of an agreement between the parties, the lessor shall expressly communicate, within a maximum period of seven working days, his decision chosen from the following alternatives:
a) A reduction of 50% of the rental income, for a maximum period of four months.
b) A moratorium on the rental income, without the four months being exceeded in any case. Said rent will be deferred, by dividing the monthly instalments for at least three years, and always within the period during which the term of the lease or any of its extensions continues.
Consequences of the inappropriate application of the moratorium and government subsidies
The lessee will be liable for any damages that may have been produced, as well as the costs incurred, notwithstanding other possible responsibilities.
Lessor different from that foreseen in article 4 of this Royal Decree-Law, that is, Lessor natural person who is not a large holder of real estate
In this case, the lessee who is in a vulnerable situation, within a month from the entry into force of the Royal Decree-law, may request the temporary and extraordinary postponement in the payment of the rent, provided that said postponement or the cancellation had not already been agreed by the parties.
Once the request is received, the lessor will communicate to the lessee, within a maximum period of seven working days, the conditions of deferral or deferred fractioning of the debt that he accepts or, failing that, the possible alternatives that he offers in relation to them.
If the lessor does not accept any agreement on the deferral, the lessee may have access to the transitional financing aid program consisting of a line of guarantees to cover said financing on behalf of the State.
Complements to the previous measures
These measures are complemented by the suspension of evictions and removals and with the extraordinary extension of the leases of main residence, regulated in articles 1 and 2 of the aforementioned Royal Decree-law.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.