Lease agreements in the time of the coronavirus

Lease agreements in the time of the coronavirus

Many will be wondering what will happen to the leases after the measures approved by the government to protect tenants affected by this health crisis.

There are mainly three measures that have come into effect:

– State-sponsored microcredit.

– Extension of six months for contracts ending after April 1.

– Suspension of evictions for those tenants in vulnerable situations.

Microcredits: Those people who cannot afford to pay their rent will be able to benefit from this financing; these will be interest-free and commission-free credits, guaranteed by the state, and can be paid back within six years. This period could be extended for a further four years if it is proved that the rent cannot be paid.

If you are a tenant and you are in a vulnerable situation you should contact your landlord, whether it is a big landlord (more than 10 rental properties) or a small landlord, and try to reach an agreement for the payment of the rent. Remember that you must always provide the landlord with documentary proof of your vulnerable situation, otherwise you will not be protected by the measures.

If there is no agreement, the large landlord will be obliged either to accept a 50% reduction of a maximum of four months’ rent or to accept that the rent for those four months will start to be paid once this situation has been overcome. The payments of these amounts that have ceased to be paid will be made in instalments over a period of at least three years, always within the term of the contract and its extensions.

If the landlord is a small owner, the alternative is an ICO credit without interest, which will be enabled at the next council meeting. These credits would be for the amount of six months’ rent, and can only be used to pay the rent.

It is important to note that this aid does not extend to commercial premises, as it only protects the rental of the usual dwelling.

How do I demonstrate “vulnerability”?

Well, there are two assumptions to be made:

1.- Having lost your job, being in an ERTE situation or having suffered a reduction in your working hours; if you are self-employed, you will have to demonstrate a substantial loss of income. The total income of the members of the family unit in the month prior to the application for the moratorium may not generally exceed the limit of three times the IPREM (537.84 per month, that is, may not exceed 1,613 euros). This limit is raised for children, disability, etc.

The amount of the income, plus the basic expenses and supplies, is greater than or equal to 35% of the net income received by all of the members of the family unit. For these purposes, “basic expenses and supplies” shall be understood to be the amount of the cost of the supplies of electricity, gas, heating oil, running water, fixed and mobile telecommunications services, and possible contributions to the community of owners, all of which correspond to the tenant’s habitual residence.

In order to accredit these conditions, documents must be provided, such as the certificate of unemployment with the monthly amount received; certificate of cessation of activity in the case of self-employed persons; family book and census certificate; declaration of disability; simple note from the registry with the ownership of the assets of the family unit; declaration of responsibility that the requirements have been met.

If any of the supporting documents are not available, they will be replaced by a responsible declaration that includes an explanation of the reasons, related to the COVID-19 crisis, that prevent the contribution. After the end of the state of alarm and its extensions, the tenant will have a period of one month to provide the documents that had not been provided.

Extraordinary extension of six months in the contracts.

Those contracts that expire in the two months following the entry into force of the protection measures will be extended by six months. This means that the owner cannot raise the rent during the next half year.

Suspension of evictions.

A suspension of evictions for vulnerable tenants who are left without alternative housing. The suspension will reach six months from the end of the state of alarm.

At López Morueco Abogados we hope to have helped clarify the situation, whether you are a landlord or a tenant.

Remember that at López Morueco Abogados we continue working online, and you can call us or send us an email.

Telephone: 677151246