Approximation to the latest measures approved by the government concerning leasing agreements

The Government has approved by Royal Decree-Law 35/2020 of 22 December, 37/2020 of 22 December and Royal Decree-Law 1/2021 of 1 January, new measures relating to the leasing of business premises and the suspension of housing eviction proceedings.

Royal Decree-Law 35/2020 of 22 December on measures aimed at leasing business premises.

Last December, the Government approved by Royal Decree-Law 35/2020, a series of measures aimed at leasing contracts for business premises which recognise, for tenants who meet certain requirements, the right to obtain a temporary reduction in rent or a deferment in the payment of rent, with the following scope:

1. a 50% reduction in rent for the duration of the state of alarm, its extensions and up to four additional months, or
2. a moratorium on the payment of rent for the duration of the state of alarm and up to 4 additional months. The deferred payment may be made for a period of two years from the end of the moratorium.

The requirements to be able to benefit from the deferment or moratorium provided for in RDL 35/2020 are as follows:

• The owner must be a public company or large landlord (owner of 10 or more urban properties, or a built-up area of more than 1,500 m2).
• That the lessee is not in insolvency proceedings.
• That the lessee, whether an individual or a legal entity, is self-employed or an SME.
• That the tenant’s activity has been directly suspended as a consequence of the measures agreed by the state of alarm, or without being suspended, has seen a reduction in turnover in the calendar month prior to that in which the rent deferment or reduction is requested of at least 75% in relation to the average monthly turnover of the quarter to which the said month belongs in relation to the previous year.

If all the requirements are met except for that relating to the lessor’s status as a large holder or public company, the lessor will not be obliged to agree to the deferment or reduction of the rent requested by the lessee. However, if the parties reach an agreement, RDL 35/2020 enables the parties to use the deposit provided for in art. 36 of the LAU for the total or partial payment of some of the monthly rent instalments.

If the tenant and the landlord have already reached a previous agreement regarding the reduction of the rent or the moratorium of its payment, but said agreement affects a period of time shorter than that foreseen for the measures of RDL 35/2020 (end of the state of alarm declared by Royal Decree 926/2020, of 25 October, and its extensions, and the four months following the end of the last extension of said state of alarm), the tenant may also benefit from the measures provided for in RDL 35/2020, but they will only apply to the part of the period not affected by the parties’ agreement.

In order to benefit from this right, the tenant must apply to the owner for the rent reduction or deferment before 31 January 2021.

NEW DEVELOPMENTS REGARDING THE SUSPENSION OF HOUSING EVICTION PROCEEDINGS. RDL 37/2020 and RDL 1/2021:

Following the declaration of the state of alarm, among the measures in the social and economic sphere agreed by the Government to address COVID-19, Royal Decree Law 11/2020 of 31 March was approved in which, among other measures, it was agreed to suspend eviction procedures and evictions of vulnerable households, the extension of habitual residence rental contracts and the moratorium on rental debts.

Initially, the suspension of eviction proceedings was set for a maximum period of 6 months. Subsequently, by RDL 30/2020 it was extended until 31 January 2020. RDL 37/2020 approved on 22 December 2020 has agreed to extend again the suspension of eviction proceedings affected by RDL 11/2020 until the end of the state of alarm.

In order for the suspension of eviction proceedings provided for in RDL 11/2020 to apply, the tenant must prove that he/she is in one of the following situations of economic vulnerability:

1. That the person obliged to pay the rent becomes unemployed, is on ERTE, or has reduced their working hours for reasons of care, or other similar circumstances that entail a substantial loss of income, and that the total income of the members of the family unit does not reach the limit of three times the IPREM (1,694.70 € per month, according to IMPREM of 2021), this limit is increased according to the number of dependent members of the family unit, disabilities of a member, etc..
2. That the rental income, plus basic expenses and supplies, is greater than or equal to 35 per cent of the net income received by all the members of the family unit.

If the lessor accredits that he/she may also be in the situation of economic vulnerability described in letter a) above or at risk of being placed in it, in the event that the measure of suspension of the eviction is adopted, the judge, in view of all this and the report submitted by the social services, may not agree to the suspension of the eviction and go ahead with the eviction.

These suspension measures are established on an extraordinary and temporary basis, and it is expected that they will cease to have effect as soon as the state of alarm declared by Royal Decree 926/2020 of 25 October, extended by Royal Decree 956/2020 of 3 November, comes to an end.

RDL 37/2020 has introduced a new article into RDL 11/2020, article 1 bis, which provides for the suspension during the state of alarm of eviction proceedings and the eviction of economically vulnerable people without a housing alternative in cases of eviction for precariousness, summary guardianship or possession or those requested by the holders of rights in rem registered in the Land Registry, that is, in cases of illegal occupation proceedings brought before the civil courts.

By RDL 1/2021 of 19 January, Article 1 bis has been amended once again, extending its scope to evictions arising from criminal proceedings. In these proceedings, the judge is empowered to suspend the eviction until the end of the state of alarm, provided that the following circumstances are met:

• In the case of dwellings belonging to legal entities or individuals who own more than 10 dwellings
• That the people who live there without a title are in a situation of economic vulnerability.
• That the people who live there are dependents (in accordance with the provisions of Art. 2 of Law 39/2006), victims of violence against women or have a dependent or minor person living in the same dwelling.

It is established that in no case will the suspension proceed if in the entry or stay in the dwelling has taken place in the following cases:

1. When the occupation takes place in a property in which a natural person has their habitual residence or duly accredited second residence, by any valid legal title (whether the owner, tenant, usufructuary or any other valid legal title).
2. When the entry or stay in the property has taken place by means of intimidation or violence against persons.
3. When there are reasonable indications that the property is being used for illegal activities.
4. When the entry or stay has taken place in publicly or privately owned properties destined for social housing and the housing has already been assigned to an applicant by the administration or entity that manages said housing.
5. When the entry into the dwelling has taken place after the entry into force of the Royal Decree-Law.

The legal department of AddVANTE is at your disposal to clarify any doubts that may arise in this regard.