09 Apr The Spanish government approves the first measures on residential lease agreements.
The Royal Decree-law 11/2020 approves different measures on lease agreements with the aim of mitigating the effects caused by COVID-19. However, all the measures focus on lease agreements for the use of the main residence, leaving out all other lease agreements.
As we advanced in another article, Royal Decree-law 11/2020, of 31 March, which adopts urgent complementary measures in the social and economic field to deal with COVID-19, has introduced several measures in a wide range of areas in order to support citizens, self-employed workers and entrepreneurs in the current health crisis.
Among the measures approved by the Spanish government are also a series of extraordinary measures that affect lease agreements.
A first measure has been to establish a moratorium on the rent of lease agreements for the use of main residences. Therefore, tenants who are in a situation of economic vulnerability in accordance with the criteria established by the Royal Decree-law may request the landlord to establish a moratorium on rent payments. The effects of the moratorium will differ depending on the type of landlord in question.
1.- Landlord who is a company, public housing entity or large holder (owner of more than 10 urban properties, excluding garages and storage rooms, or owner of a total built area of more than 1,500 m2). Must offer the tenant:
a) a 50% reduction of the rent; or
b) an automatic moratorium on the payment of the rent, which must be returned within three years.
Both measures will affect a maximum of fourth monthly payments, as long as the state of alarm is prolonged or, if applicable, the tenant’s situation of vulnerability persists. In any case, it must be taken into account that before applying either measure, the parties can reach another type of agreement.
2.- Landlord who is not considered a company, public housing entity or large holder. In this case, the parties may reach an agreement to defer or split the payment of the rent. In the event that no agreement is reached, the tenant may access a program of transitional financing aid also approved by the Royal Decree-law 11/2020.
Another important measure introduced is the automatic extension of leases. The landlords of properties that make up the tenants’ main residences can have their lease agreements extended for a maximum period of 6 months, provided that during the validity of the Royal Decree-law and up to two months after the end of the alarm state the period of compulsory or tacit extension of the agreement ends. During this period the terms and conditions established in the current lease agreement will continue to be applied. Likewise, this extension must be accepted by the landlord, unless the parties have determined other terms and conditions by mutual agreement.
Furthermore, the eviction proceedings derived from the lease agreements of main residences have been suspended. In the event that the tenant is in a situation of social or economic vulnerability that prevents him/her from having a home, the eviction procedure or, if applicable, the act of launching the home will be suspended. In this regard, it should be noted that the suspension of such procedures does not prevent new eviction proceedings from being filed.
Despite all the measures adopted, to date all of them exclusively affect lease agreements for the use of main residences. No measures have yet been adopted to suspend payment of rent for real estate or commercial premises. Although the Spanish government has not yet established any measures in these cases, the parties are free to reach an agreement on whatever they deem appropriate during the period of the state of alarm or even beyond.
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