Impact of the measures of Royal Decree Law 15/2020 on the payment of business premises
This Wednesday, April 22nd, the Royal Decree Law 15/2020 (RDL) has been published in the BOE by which one of the extraordinary economic measures affecting the payment of rent for business premises has been approved.
In view of the repeated extensions of the state of alarm that have taken place during the current health crisis, the Government has approved a new package of economic measures that extends and complements those adopted in previous decree-laws in order to respond to the support needs of companies and workers, among which those relating to the payment of commercial premises leases stand out.
Along these lines, the RDL mainly distinguishes two situations depending on whether the lessor is a large holder or not, and defines the requirements that lessees must meet in order to take advantage of the measures, which are applicable to properties that are the subject of a lease for use other than housing in accordance with the provisions of Article 3 of the Urban Leases Act.
In cases where the lessor is a large holder, i.e. an individual or legal entity that owns more than ten urban properties, excluding garages and storage rooms, or a built up area of more than 1,500 square metres; or is a public housing company or entity, the lessee, whether an individual or legal entity, may apply for a moratorium on the payment of rental income to be applied automatically within one month of the entry into force of the RDL. This moratorium consists of deferring payment, without interest or penalty, for the entire duration of the alarm condition, a period of time to which, once it has ended, a maximum of four more monthly payments can be added if necessary due to the impact of the COVID-19.
The deferred income will be paid in instalments over a period of two years from the end of the situation described above and any monthly extensions, and always within the period of validity of the contract. This moratorium must be accepted by the lessor unless the parties have previously agreed on a moratorium or reduction of rent.
In cases where the figure of the landlord does not fit any of the above described, the tenant may request from the landlord, within one month from the entry into force of the RDL, a temporary and extraordinary postponement in the payment of the rent, unless the parties have previously agreed on a postponement or reduction of the rent. It is added for these cases that in the context described, the deposit provided by the tenant at the conclusion of the contract may be used for the total or partial payment of some monthly fee; however, the RDL does not make any reference to the periods in which the deferred rent payment must be compensated or to the non-application of interest and penalties, so it seems that it remains at the disposal of what the parties may agree.
The self-employed and small and medium sized enterprises renting a property used for economic activity may benefit from these measures if they can prove that their activity has been suspended by the declaration of the state of alarm or that, if it has not been suspended, their turnover for the calendar month for which the deferment is requested has been reduced by 75% with respect to the average monthly turnover for the previous year of the quarter to which that month belongs.
In order to be considered self-employed in these terms, the RDL requires that you must be affiliated to and registered with the Special Social Security Regime for Self-Employed Workers or the Special Social Security Regime for Seafarers or, if applicable, one of the RETA’s substitute mutual insurance companies on the date of declaration of the state of alert, March 14.
SMEs must comply with the requirements of Article 257.1 of the Law on Corporations, consisting of not exceeding at least two of the established limits (4 million assets, 8 million net turnover, 50 employees on average per year) for two consecutive years.
The RDL leaves some points unclear by not clearing up aspects such as, for example, whether subtenants can benefit from the measures provided for tenants, or whether the owners of the properties must have full ownership of them to benefit from the established benefits, or it is sufficient to have an undivided interest or the usufruct of more than ten properties to be considered a large holder. Thus, as in other regulations issued during this period of alarm, we see how the haste and urgency of the situation in some cases causes insecurities and uncertainties that are the last thing the real estate market needs at this time.
From AddVANTE’s Commercial Department, we remain at your disposal for further information or to resolve any doubts that may arise in relation to this article.