In Royal Decree-Law 25/2020 of April 21, published in the Official State Gazette (BOE) on April 22 and which came into force on April 23, a series of exceptional measures have been established to alleviate the situation of self-employed workers and SMEs as a result of the Covid-19 crisis and with respect to the lease agreements of the business premises they occupy as tenants.
Below we provide a schematic summary of what these measures consist of and who can benefit from them and how.
1) Measures that can be requested.
Basically, and depending on whether the landlord is a company or public housing entity, a large landlord, or if the landlord does not meet any of these conditions, the following measures may be requested:
A) In the event that the landlord is a public housing company or entity or a large property owner (one who owns more than 10 urban properties or a total surface area of more than 1500m2 ).
– The beneficiary may request from the landlord a moratorium on the payment of rent for the period that the state of alarm and its extensions last, extendable to the following months if the effects of Covid 19 continue during them, always with a maximum limit of 4 monthly rent payments.
– The rent for that period will be deferred without any penalty and without accrual of interest and the payment of the deferred rents must be paid in installments over a period of two years (always within the term of the contract) and from the moment the state of alarm ends or the maximum four months established.
– The tenant's request must be accepted by the landlord, unless both parties have previously reached an agreement on a moratorium or rent reduction.
B) In the event that the landlord is not a company or public housing entity nor a large landlord.
– The beneficiary may request a temporary and extraordinary deferral of rent from the landlord.
– Acceptance of this request will be voluntary for the landlord, and its acceptance is not mandatory for him.
– Within the framework of the negotiation of the requested deferral, and only for this case, the parties are authorized to make use of the legal guarantee deposited by the tenant, so that it may be used to satisfy total or partial rental rents, in which case the tenant must replace the amount used from the guarantee within one year from the agreement made or before the termination of the contract if that period is less than one year.
2) Deadline for applications.
Both in the case of public entities or companies and large landlords, as in the other case, the tenant's request to the landlord must be made within the maximum period of one month from the entry into force of the Royal Decree-Law, that is, until May 23, 2020.
3) Beneficiary persons.
The following people will be able to benefit from these measures:
A) Self-employed individuals who meet the following requirements:
- That the property is used for its activity.
- To be registered and in good standing on the date of declaration of the state of alarm in the RETA, in the RESS of the sea workers or in a Mutual Society substitute for the RETA.
- That their activity has been suspended with the entry into force of the state of alarm or by orders issued by the competent Authority under the state of alarm.
- If your business activity is not suspended due to the declaration of the state of emergency, you must prove that the billing for the month prior to the request for deferral has resulted in a reduction of at least 75% compared to the average monthly billing for the quarter to which this month belongs and compared to the previous year.
B) SMEs that meet the following requirements:
- That the property is used for its activity.
- That the limits established in article 257.1 of the Capital Companies Law are not exceeded, that is, the companies that can formulate an abbreviated balance sheet (those that meet two of the following circumstances: i) that the total of the asset items does not exceed four million euros, ii) that the net amount of their turnover does not exceed eight million euros and iii) that the average number of workers employed during the year is not more than fifty).
- That their activity has been suspended with the entry into force of the state of alarm or by orders issued by the competent Authority under the state of alarm.
- If your business activity is not suspended due to the declaration of the state of emergency, you must prove that the billing for the month prior to the request for deferral has resulted in a reduction of at least 75% compared to the average monthly billing for the quarter to which this month belongs and compared to the previous year.
4) Proof of the requirements by the tenant to the landlord.
The tenant's accreditation to the landlord of meeting the requirements to request the deferral will be carried out as follows:
- If the tenant has experienced a reduction in business activity but it has not been suspended due to the state of emergency, the tenant must demonstrate compliance with the required conditions by submitting a sworn statement. This statement, based on accounting information and income and expenses, must confirm a reduction in turnover of at least 75%, according to the criteria outlined above. In any case, the tenant must provide the landlord with their accounting records upon request to substantiate this reduction.
- In the event that there has been a suspension of activity as a result of the declaration of the state of alarm, this suspension will be certified by a certificate issued by the AEAT or competent body in the Autonomous Community, based on a declaration of cessation of activity declared by the interested party.
You can contact this professional office for any questions or clarifications you may have.
Warm regards,
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A graduate in Law from the University of Barcelona and with a Master's degree in Business Law from the same university, he worked at the law firm Alonso-Cuevillas Advocats and later joined the Civil and Commercial Litigation department of the law firm Bufete Bueno Bartrina. He then joined the team at the firm Casamitjana-Cuyas-Morales, and subsequently continued his career at Bufete Herrera Advocats, in the Commercial and Litigation department. In November 2015, he joined aÀmbitJurídic i Econòmic, SLP, as a professional partner, to head the Commercial and Insolvency practice.
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