23 Apr The Spanish government approves new urgent measures for lease agreements for non-residential use.
The Royal Decree-law 15/2020, of 21 April, approves new urgent measures for lease agreements of non-residential use, a measure that SMEs and self-employed workers had been demanding since the declaration of the state of alarm.
The Spanish government, with the approval of the Royal Decree-law 15/2020 on 21 April 2020, has finally incorporated measures for leases for non-housing use, although these measures come at a time when many tenants had already reached agreements with their landlords due to the inability to pay rent due to the COVID-19 crisis.
The regulation distinguishes between those leases whose landlords are public housing companies or entities, or a large holder – an individual or legal entity owning more than 10 urban properties, excluding garages and storage rooms, or with a built up area of more than 1,500 m2, from those whose landlords do not meet these requirements.
The Royal Decree-Law, for the first type of lease, establishes that the individual or legal entity leasing the property may, within one month of the entry into force of this regulation, request the landlord to postpone payment of the rent for the duration of the state of alarm and its extensions and the following monthly payments, which may be extended one by one if this period is insufficient in relation to the impact caused by the COVID-19, but which may not exceed four months. The landlord must accept this moratorium provided that no agreement has already been reached between the parties.
In this way, the rent will be deferred, without penalty or interest, from the next rent payment, by means of the division of the instalments within a period of two years, counting from the date the state of alarm finishes or the maximum period of four months elapses, and always within the term of the lease agreement or any of its extensions.
For all those lease agreements whose landlords are not public housing entities or large holders, the Royal Decree-Law is much more limited. In these cases, the tenant, also within one month of the entry into force of this regulation, may request the landlord to temporarily and extraordinarily defer payment of the rent, provided that the parties have not already reached an agreement on deferment or reduction of the rent.
However, the rule does not establish for what period the tenant may request such temporary and extraordinary postponement, nor does it clarify the extension of the period during which the tenant must reimburse the landlord the rent accrued. Are we to understand that by analogy the same parameters will apply as for lease agreements whose landlords are public housing entities or large holders, or are these details left to the parties to reach an agreement? We hope that the Spanish government will clear up these uncertainties soon.
The Royal Decree-Law also leaves the door open for landlords to dispose of the deposit made by the tenants to meet the total or partial payment of some of the deferred monthly payments. In these cases, the tenant must replace the amount of the deposit within one year of the conclusion of the agreement or the remaining term of the contract, provided that it is less than one year.
Finally, as to who may benefit from this moratorium, the Royal Decree-Law establishes a series of requirements for the self-employed workers and SMEs:
- To be registered with the RETA or replacement insurance company on the date of declaration of the state of alarm in the case of self-employed workers, or to comply with the limits established in article 257.1 of the Revised Text of the Corporate Enterprises Act for SMEs;
- That their activity has been suspended as a result of the declaration of the state of alarm or subsequent orders by the competent authorities; and
- In the event that the activity has not been directly suspended, proof must be provided of a reduction of at least 75% in the turnover of the calendar month prior to that to which the deferral is requested, in relation to the average monthly turnover of the quarter to which that month belongs, referring to the previous year.
If you have any doubts or queries about these new measures, you can contact us at email@example.com