In Spain 85% of the landlords of habitual residence in Spain are private individuals, which is why they, like the tenants, have been victims of the defaults produced as a result of the epidemic. This was highlighted yesterday at the special covid online conference that analyzed on June 18, the “Legal developments and practical problems in housing leases adopted by Royal Decree Law 11-2020”.
This Royal Decree of March 31, adopts urgent measures in the social and economic field, to avoid the risk of default of the most vulnerable households that are unable to pay the rent, guaranteeing that there are no forced evictions, while protects the landlord’s right to profitability, not only in the state of alarm, but in a later period in which, it is anticipated, the consequences that may arise will still have to be borne.
In the case of housing leases, unlike business premises, the legislator has tried to regulate specifically to provide legal certainty, without leaving almost everything to the will or negotiation of the parties. It must be taken into account that in Spain 85% of housing leases are in the hands of individuals, that is, small landowners, who have been affected by the crisis. The novelty of this RD, in his opinion, is that it tries that inexcusable aid to tenants is not at the expense of the lessor, but at the cost of public aid to meet the rent payment.
Regarding the content of the legal measures approved in this RD, it is necessary to develop the reasons and terms for a mandatory extension of these contracts, up to six months in duration, or the temporary suspension of evictions as a legal measure during the same period of duration. , for non-payment of rent or other amount due. But a modification should have been introduced so that non-payment of the rent does not constitute a legal cause to terminate the contract during the time of the health crisis. Judges should make a judgment of proportionality and reasonableness to avoid that the mere non-payment or delay of a monthly rent is sufficient cause to demand the termination of the contract. In this way, the interests of both parties are guaranteed, since it protects vulnerable families, while preventing the loss of housing for the landlord.
The RD has some defects, which could have been corrected by modifying article 27.2.a LAU to avoid the contractual resolution of the leases, whose eviction is suspended or expressly recognizing that the extraordinary extension of the duration of the leases applies to all contracts. , not only to those who are in this extension. It is a very flawed decree in its drafting and deficient in its regulation, therefore, lawyers will have to be exposed to the interpretation of the courts.
The term of the temporary suspension of evictions for homes without a housing alternative may be reduced in the event that the landlord requests it because it is also in a vulnerable situation, although it appears from the content of the rule that the will of the legislator seems aimed at protect only families that have been forced into non-payment of income by the effects of covid-19.
As for the moratorium or debt forgiveness of up to a maximum of four monthly payments, this is probably the most controversial legal measure and that will generate more problems in practice, since it does not establish compensation mechanisms for the injured owners. It is lacking that the measure is not accompanied by compensation for the affected owners, who have rights that must be protected, such as property rights.
For landlords who are not public companies or large homeowners, certain aid is recognized for their tenants. A very positive measure, since the amount of it will be up to 900 euros per month and up to 100% of the rental income or, where appropriate, up to 100% of the principal and interest of the loan that has been subscribed , with which the rent of the habitual residence has been satisfied.