Lease Agreements in Times of COVID-19
Good faith between the parties is key to minimizing harm
The exceptional situation caused by the COVID-19 pandemic has raised numerous legal questions. In this section, we aim to share our perspective regarding urban lease agreements. How does the state of alarm affect rental contracts?
Starting, as it could not be otherwise, from the well-known legal principle pacta sunt servanda (“agreements must be kept”), we must also consider the provisions of Spanish law applicable to exceptional scenarios — situations calling for action based on each case’s specific circumstances, under the principle of proportionality. For example, situations arising from causes of force majeure, or a substantial change in the fundamental circumstances under which the contract was signed, in line with the judicial doctrine of rebus sic stantibus.
Royal Decree 463/2020, which declared the state of alarm, does not explicitly address this matter, nor does Spanish legislation expressly regulate how to proceed under such a declaration. The state of alarm cannot automatically justify general exceptions based on force majeure; each case must be studied individually and interpreted restrictively. Nevertheless, the state of alarm—whose duration and ultimate impact remain uncertain—clearly represents a significant alteration of circumstances, calling for both sensitivity and mutual understanding between the parties.
At Feliu Bellapart, Solicitors in Mallorca, in light of the exceptional nature of the situation and the need to analyze each case’s unique details, we recommend adopting a cooperative and flexible approach between both parties. Through a quick, explicit, and signed agreement, the situation can be resolved practically and efficiently, avoiding lengthy and costly future court proceedings.
Due to the current extraordinary circumstances and following public health recommendations, please note that as a preventive measure against COVID-19 during the state of alarm, in-person visits to our office (Paseo Mallorca, 2, 1º) are limited to cases of extreme urgency. For any inquiries related to this topic—or others—we remain available during our regular hours by email or telephone.