The spanish government approves a new package of measures to protect rents, mortgages, consumers and workers’ rights

The Spanish Government has approved Royal Decree-Law 11/2020, which consists of a new package of measures aimed at supporting workers, consumers, families and the most vulnerable groups, so that their financial situation can be alleviated and they can have a minimum income and thus be able to pay their fixed costs.

Some of the main measures of this Royal Decree related to HOUSING RENTAL are

  • The suspension of evictions and the launch of housing for vulnerable households without alternative housing for a maximum period of six months, which will begin to count from the resumption of the activity of the courts, once the Covid-19 crisis has been overcome.
  • An extraordinary extension of the leases of habitual residence whose expiration occurs from this moment until two months after the end of the state of alarm. The extension must be requested by the tenant and will have a maximum extension of six months, during which time the terms and conditions established for the current contract will continue to apply, unless the parties agree otherwise.
  • Deferral on the debt for the payment of rent for tenants of a main residence in a situation of economic vulnerability derived from Covid-19.

The Royal Decree states that this deferral can be a postponement of the payment of rent or even the total or partial cancellation of the rental debt.

Once this situation has been overcome, the tenant will return the unpaid quota or quotas over a period not exceeding three years, without any type of penalty or interest being applied.

This deferral of the rental debt will be automatic when the lessor is a large holder of housing, both public and private, that is, when the lessor has 10 or more properties

When the landlord is a small owner (when he or she owns less than 10 dwellings), he or she may voluntarily accept from the tenant the deferral of the payment of rent or the total or partial waiver of the rent; but if he or she does not accept it, the tenant may have access to the programme of transitional financial assistance from banks which is fully covered by the Spanish Government.

In this case, the aid may cover a maximum of six -month rental payments and the repayment period will be six years, exceptionally extendable for a further four, and in no case will it accrue any costs or interest for the applicant

  • Rental Assistance Program for renting a permanent home. In addition, a program of aid to tenants of regular housing who do not recover from the situation of vulnerability and cannot afford to repay the loan is also contemplated. For these individuals, aid of up to 900 euros per month and up to 100% of the rental income or, if applicable, up to 100% of the principal and interest of the loan taken out to pay the rent for the usual residence is provided.

Given that the measures are limited to the fact of constituting the tenant’s habitual residence and the need for the tenant to be in a situation of vulnerability, it is necessary to clarify that the habitual residence is the one where there is a permanent and fiscal residence.

Other measures of this Royal Decree related to CONSUMER AND USER PROTECTION are:

  • Right to terminate certain contracts without penalty to the consumer, who may recover the money paid when the provision of the service is impossible (such as show tickets).

In the case of contracts for the provision of periodic services (such as nurseries, gyms, academies, etc.) the company may not collect new receipts until the service can be provided normally, without this giving rise to the termination of the contract, except by the will of both parties.

  • Temporary suspension of the contractual obligations arising from any loan or credit without a mortgage guarantee (within this type of loan we can include those arranged to finance the purchase of a car or a household appliance) that was in force on the date this Royal Decree was approved, when it is contracted by an individual who is in a situation of economic vulnerability by the COVID-19. The creditor may be asked to suspend its obligations up to one month after the end of the state of alert. The suspension will have a duration of three months (extendable by Agreement of the Government) and during the period of validity of the suspension the creditor will not be able to demand the payment of the quota and no interest will be due, neither ordinary nor delayed.
  • The companies supplying electricity, oil products, natural gas and water must guarantee the supply to consumers who are natural persons in their habitual residence, while the state of alarm is in force.

Other SOCIAL AID measures provided for in the Royal Decree are:

  • A new subsidy is created for household employees affected by the cessation or reduction of activity and for temporary workers whose contract ends and who are not entitled to benefits.
  • The Social Security is empowered to grant deferrals on the payment of social security contributions to companies and self-employed workers and the deferment of payment of debts to the Social Security is allowed until 30 June.
  • Self-employed workers who are entitled to unemployment benefit may defer their March social security contributions free of charge for the days they have worked.
  • Mortgage debt deferral on property used by the self-employed for their economic activity, in addition to the deferral on mortgage debt for the purchase of a primary residence previously established.

What requirements must be met to be recognized as a VULNERABLE PERSON BY THE COVID-19?

For the purposes of obtaining deferrals or aid in relation to the rental income of the main residence, the cases of economic vulnerability as a result of the health emergency caused by the COVID-19 will require the joint fulfilment of the following requirements:

  1. That in the month prior to the request for the deferral, the person who is obliged to pay the rental income becomes unemployed, Temporary Employment Regulation File (ERTE), or has reduced his or her workday due to care, in the case of being an employer, or other similar circumstances that imply a substantial loss of income, not reaching the total income of the members of the family unit, in general, the limit of three times the Public Indicator of Multiple Effects Income per month (hereinafter IPREM, about 1.645 euros/month), which may be increased by 0.1 times the IPREM for each dependent child or elder over 65 in the family unit (0.15 if it is a single-parent family unit). The limit will rise to four or five times the IPREM if any of the members of the family unit is declared to have a disability of more than 33% or 65%, respectively.
  2. That the rent, plus expenses and basic supplies, is greater than or equal to 35% of the net income received by all members of the family unit.
  3. That none of the members of the family unit is the owner of a dwelling or has the usufruct of a dwelling in Spain.

CONCLUSIONS

Most of the measures taken by the Government are aimed at vulnerable people and regular housing and therefore do not apply to those who have a second home in Spain, as is the case with most of IMONT’s clients.

We inform you that the Government has guaranteed that there will be no supply cuts, but this does not mean that the corresponding receipts can be stopped without justified cause.

In case they stop to pay invoices, receipts or quotas of loans of any type without being included in some of the assumptions gathered in this Royal Decree, it will be necessary to consider that the suppliers and banking organizations will be able to claim it with the corresponding interest of delay that they have established.