What economic measures have been taken during COVID-19 regarding the payment of the housing rent?

In Spain, on March 14th 2020, the Government approved the Royal Decree 463/2020, declaring the state of alarm for the management of the health crisis situation caused by COVID-19.

Likewise, on March 17th 2020, the Spanish Government passed the Royal Decree – Law 8/2020 establishing extraordinary urgent measures to face the economic and social impact of COVID-19.

The Royal Decree – Law has undertaken steps to combat the crisis of the Coronavirus:

-The supply of water and electricity to vulnerable consumers is guaranteed.

-Preferential character of teleworking.

-Moratorium on mortgage debt for habitual residence.

–Supplementary allowance for the self-employed workers due to the cessation of their business activity.

-With ERTES (Extension in the Record of Temporary Employment Regulation), the company is exempt from paying the contribution.

-Also with ERTES, workers may collect unemployment benefit without a minimum contribution period. And the time that the benefit is received will not be computed.

These are some of the extraordinary measures that the Government has arranged to alleviate the crisis of COVID-19 or Coronavirus.

But what about my rent?

However, has any aspect of rental or lease payment been regulated?

The answer is no.

However, from a legal point of view, there is a solution to the difficulty in paying rent, due to the Coronavirus pandemic.

It is clear that the circumstances taken into account when signing the rental agreement can be changed. It is true when we are facing a cause of force majeure, motivated by a pandemic.

In pandemics, the following circumstances occur, and specifically with COVID-19, the following aspects are met:

–It is irrelevant to what had been agreed.

-No-one is at fault.

-It arose unexpectedly.

-It was not a foreseeable risk when concluding the rental contract.

-The incidence is serious and relevant.

In the jurisprudence of the Supreme Court, we find sentences such as the Judgment of January 15th 2019.

It pointed out that an economic crisis cannot justify the modification of a lease, since the risk may be predictable, however, the same does not occur in a viral pandemic situation.

Therefore, since the Coronavirus has been declared by the WHO as a pandemic, we can rely on a REBUS SIC STANTIBUS clause in our Legal System.

This allows us to lower the leasing amount since it would not make sense to burden one of the parties with all the economic weight in the face of an unforeseeable situation such as the Coronavirus crisis.

The REBUS SIC STANTIBUS clause allows for the modification of the rental or lease agreement if  the unforeseeable conditions of the contract can include a significant alteration such as Coronavirus or COVID-19.

The REBUS SIC STANTIBUS rule grants the power to reduce the rental income or even terminate the contract, due to the unpredictability of the state of alarm decreed by COVID-19.

Always keeping into account the good faith of the other party.

In case of refusal, you have to go to the Courts to demand the modification or resolution of the rental contract.

Likewise, it can be requested to apply to the lease contract for housing and premises, (think about the rental or lease of business premises that have been forced to close as a result of the Coronavirus with the consequent loss of income).

From the Pérez Parras Economists & Lawyers Firm in Málaga and Nerja, we hope that this information is of interest to you.

Do not hesitate to contact our specialised legal, labour, tax and accounting team.