Help for tenants

MEASURES RELATING TO RESIDENTIAL TENANCIES

The BOE (Spain's Official State Gazette) of 1 April 2020 published Royal Decree-Law 11/2020 of 31 March, which adopts additional urgent social and economic measures to deal with COVID-19 (RDL 11/2020) and which, in addition, amends Royal Decree-Law 8/2020 of 17 March, in order to correct and clarify certain points that had raised questions in
that regulation.
Given the length of the regulation, we present here only the developments that may be of interest to the insurance broker as a business, or to their clients.

Regarding tenancy agreements

Tenants are granted the right to request a six-month extension, during which the price and other terms and conditions of the existing contract continue to apply, when the minimum term or its extension under the LAU (Spain's Urban Leases Act, Ley 29/1994, of 24 November) falls due between 2 April 2020 and two months after the end of the

state of emergency. This extension must be requested by the tenant and is compulsory for the landlord to accept, unless the two parties agree otherwise. Although the right is included in the chapter on measures for vulnerable groups, no such condition is required in order to qualify for the extension of contracts, so it could be understood to apply to any type of tenant of a main
residence.

Moratorium on rent debt payments

This measure applies to tenants of a main residence who are in a position of economic vulnerability because of COVID-19, whether because they are affected by a furlough scheme (ERTE); if self-employed, because of a loss of household income; or because they do not own a home. Among other measures, they may request a moratorium on, or reduction of, rent payments, within the limits set out in the regulation.

Mortgage moratoriums

The moratorium regulation, whether under RDL 11/2020 or the moratorium established by Royal Decree-Law 8/2020, requires the borrower to be considered economically vulnerable.

The mortgage debt covered by the moratorium is that relating to the main residence, properties used for business activity, or non-primary rental homes where the owner has stopped receiving rent during the period of the state of emergency or until the month following its end. Applications may be made up to one month after the state of emergency ends.

Conditions of the moratorium:

• As with the mortgage loan moratorium regulated under Royal Decree-Law 8/2020, applying the suspension does not require agreement between the parties to take effect, nor any novation of the contract. Suspension of the contractual obligations takes effect from the moment the debtor applies to the creditor, together with the required documentation, by any means (without prejudice to compliance with registration obligations where there are guarantees other than the mortgage, or registered instalment sales).

• The suspension will last three months, which may be extended by agreement of the Council of Ministers.
• During the suspension, the creditor institution may not collect the instalment nor any interest of any kind, whether in full or in part, and the term will be extended automatically.

For further information, you can consult:

Royal Decree-Law 8/2020, of 17 March, on extraordinary urgent measures to deal with the economic and social impact of COVID-19.

Royal Decree-Law 11/2020, of 31 March, which adopts additional urgent social and economic measures to deal with COVID-19.