WHAT REQUIREMENTS DO SMEs AND SELF-EMPLOYED WORKERS HAVE TO MEET TO REQUEST THEM?
Today, Wednesday 23 April 2020, Royal Decree Law 15/2020, of 21 April went into force, which among other extraordinary measures to counteract the effects of Covid-19, established measures regarding non-residential leases for SMEs and self-employed workers whose activity has been affected by the Government’s measures.
What does the new Royal Decree Law say on renting premises?
This new Royal Decree Law makes it obligatory for lessors considered ‘large holders’ to grant tenants a full moratorium (deferment) on all rent due for the duration of the state of emergency and, if this is not sufficient, also on the following monthly payments, extendible on a month-to-month basis, for up to four monthly payments.
As with the rest of the exceptional measures created during the state of emergency, under no circumstances may leases be terminated, so they remain fully in force and applicable in all their effects, including payment of rent due. Therefore, tenants may not unilaterally refuse to comply with the lease agreement, or the extraordinary measures that may apply, and if they do, the lessor may demand compliance or termination of the lease.
What is a Large Holder, for the purposes of this RDL?
Large Holders are individuals or legal entities with more than 10 urban properties (excluding garages or storage spaces), or fewer properties with a combined total floor space of more than 1,500 m².
Who can request rent deferral?
It is important to understand that, for this obligatory deferment to apply, the tenant must:
- Request it before 23 May 2020.
- Have their economic activity affected by the space leased and
- Provide proof of:
- Their status as an SME or self-employed worker whose activity has been suspended as a result of the Government’s measures.
- And that their turnover has dropped by 75%. This requirement must be verified in an affidavit from the interested party and the lessor may ask to see the accounts to confirm it.
These measures do not apply in cases when the lessor and tenant reached an agreement prior to the application of RDL 15/2020, meaning before 04/23/2020.
What happens when the owner is a small holder?
If the owner has 10 or fewer properties, the tenant can also request deferral of rent payments, under the same conditions as the Large Holders. In this case, however, the measure isn’t obligatory and the lessor may deny the request.
If the parties reach an agreement, the lessor may perceive part or all of the rent deferred through the guarantees (legal deposit and additional guarantees) established in Article 36 of the LAU (Spanish Urban Lease Act) provided by the tenant upon signing the lease agreement. If the deposit is used for this purpose, the tenant must repay it within one year (or less if the lease runs out before that).
