Lease Payment Moratorium and Other Measures for Rentals
3 measures, little practical help for most people
If in our previous post regarding commercial leases we highlighted that “good faith between the parties is key to minimizing harm,” in this one we must reach the same conclusion.
What measures have been approved?
Lease debt moratorium: this moratorium may only be requested if the landlord is a large holder (owner of more than 10 properties) or a public housing entity/body. In our view, in the great majority of cases landlords do not meet those requirements, or this is completely unknown to the tenant.
If the landlord does meet those requirements, the tenant, who is in a situation of vulnerability due to the spread of COVID-19 (see Article 5 of the BOE link provided), may request an extraordinary temporary deferral of rent payment. After a period of 7 business days, if no agreement has been reached, the landlord must state whether they choose to:
- Reduce the rent by half, for a maximum of four months.
- Grant a payment deferral (moratorium during the state of alarm, with the possibility of an extension of up to 4 months).
This moratorium will not generate any kind of interest or penalty for the tenant.
- Suspension of evictions and removals:
this suspension will only apply if the court is provided with evidence of the tenant’s financial vulnerability arising from COVID-19, which prevents them from finding an alternative home. - Extension if the lease ends during the state of alarm:
whether due to the expiry of the contract or any of the extensions provided for in the Spanish Urban Leases Act (LAU), the tenant has the right to request — and the landlord is obliged to grant — an extraordinary extension of up to 6 months. The affected party may request it from 1 April 2020 until two months after the end of the state of alarm is declared.In short, 3 measures, little practical help for most people, and it is up to the parties to avoid greater harm through agreement.