The Royal Decree of April 21, published on the 22nd of April and which came into force on April 23, contains urgent complementary measures to support the economy and employment.
In Articles 1 to 5, different measures are established for arranging a moratorium in payment of rent by those who rent premises for commercial purposes.
1.What is a moratorium in this context?
A moratorium means a delay in payment of the rent for the commercial premises in which you have your business.
2.How do I request a moratorium?
2.a) An agreement can be made at once between the two parties.
In the first place you must try to arrive at an agreement with the owner of the premises. You should make various proposals to him/her although the law does not suggest particular proposals, but only speaks of a delay or a reduction in the rent – as a result of which its format is left open to the two parties. If it is possible, try to make sure that any communication is in writing.
2.b) If there is no agreement between the parties:
First you must ask the owner of the premises whether he is a large-scale landlord (a public company or the owner of more than 10 premises – not including garages and lockups); and then, depending on whether he is a large-scale landlord or not, you have different options as you will see below.
2.b.1) IF THE LANDLORD IS A LARGE-SCALE LANDLORD, Article 1 applies:
Contact the owner and request in writing a delay in payment of the rent
How long do I have to apply for the delay?
One month, until the 23rd of May 2020.
Can the owner refuse?
No, it has to be applied automatically provided that the tenant meets the requirements indicated below in points 3 and 4.
For how long can payment be delayed?
Any delay granted will apply automatically and only for the period during which the state of alarm applies – with a maximum of 4 months.
Will I have to pay back the amount which I have not paid? How?
You will be able to pay it back in instalments over the two years following the end of the moratorium.
When I pay it back, will I have to pay any interest?
No, the moratorium or delay will take place without any kind of penalty or extra payment.
2.b.2) IF THE OWNER IS NOT A LARGE-SCALE LANDLORD (i.e. he or she has fewer than 10 properties, or is the owner only of garages or lockups) Article 1 applies:
Contact him or her, and request in writing a delay in the payment of the rent.
How long do I have to apply for the delay?
One month, until the 23rd of May 2020.
Can the owner refuse?
No, it is applied automatically provided that the tenant meets the requirements indicated below in points 3 and 4.
For how long can payment be delayed?
Any delay granted will apply automatically and only for the period during which the state of alarm applies – with a maximum of 4 months.
Can the deposit be used to pay the monthly payments?
Yes, the deposit – paid in accordance with the law of 9th November 1984 – can be used for payment of all or part of any of the monthly payments.
Would I have to make good the deposit later?
Yes, within two years of the date of the agreement or during the period of validity of the contract if less than one year is left.
3. What are the requirements for requesting this rent moratorium? You must be self-employed or a PYME (a registered small-business) Article 3 applies:
3.1. Self-employed – requirements:
- You must have been affiliated and active (de alta) on the date of the declaration of a state of alarm (14th March) under the “Régimen de Trabajadores por Cuenta Propia o Autónomos” or in the “Régimen Especial de la Seguridad Social de los Trabajadores del Mar”, or, if relevant, in one of the alternative RETA associations.
- Your work has been stopped as a result of the Royal Decree of 14th March, or because of orders issued by the relevant authority.
- If your activity was not suspended as a result of the Royal Decree, you should show that your income in the month proceeding the request for a rent moratorium suffered a reduction of 75% or more in comparison with the monthly average of the same three-month period in the previous year.
3.2. PYMEs – small businesses – requirements:
- You must not be above the limits established in article 257.1 of the Royal Decree 1/2010 (2nd July), which established the revised text of the law on businesses.
- Your work has been stopped as a result of the Royal Decree of 14th March, or because of orders issued by the relevant authority.
- Or if your activity was not suspended as a result of the Royal Decree, you should show that your income in the month proceeding the request for rent moratorium suffered a reduction of 75% or more in comparison with the monthly average of the same three-month period in the previous year.
4.What documentation do you have to provide for the landlord? Article 4 applies:
You must show him/her that your business has been affected by the situation of the state the alarm. He will request the following documents:
- Approved evidence that your income in the month proceeding the request for rent moratorium suffered a reduction of 75% or more in comparison with the monthly average of the same three-month period in the previous year. (If this landlord requests it, the tenant must make his/her accounts available to the landlord to demonstrate the reduction in activity.)
- In the event of total stopping of activity, this should be proved by the certificate issued by the Agencia Estatal de la Administración Tributaria or the relevant department of the Comunidad Autónoma concerning the cessation of the business activity of the tenant.
5.The consequences of an unjustified request for a moratorium. Article 5 applies:
Beware: The Royal Decree states that the tenant will be held responsible for any losses or other problems caused by the improper use of it or the provision of false information, as well as any other problems which might arise.
Margaret Hauschild Rey
Bennet & Rey Lawyers
Email: [email protected] / 699 71 93 06
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