Tenants who are in a situation of economic vulnerability due to the coronavirus crisis in Spain may request a moratorium or cancellation of rent from their landlord until 2nd July 2020, as established by the Royal Decree Law 16/2020, which has extended the application period to three months. To be eligible, applicants must provide the relevant documentation that proves their situation of need.
Due to this adjustment, tenants affected by the coronavirus now have a longer period to request the moratorium, as this period was most recently due to end at the beginning of this month on 2nd May, but the Government has extended applications by two more months until 2nd July. Specifically, the regulation states that it is extending "the period of three months from the entry into force of this Royal Decree Law" (30th April 2020). The application period has been open since 2nd April, as established in Royal Decree Law 11/2020 of 31st March.
Who exactly is eligible to apply for a moratorium?
Tenants who are unemployed, who have been presented with an ERTE (temporary lay-off) or who have had their working hours reduced for care purposes in the month prior to their application may apply for this moratorium on renting their usual residence. Tenants who are self-employed and have suffered a substantial loss of income are also eligible.
Who is classed as a vulnerable tenant?
Among the requirements that must be fulfilled to be recognised as "vulnerable" are the following:
- In the month prior to the moratorium, the total income of the household must not exceed the limit of three times the IPREM (approximately 1,645 euros/month), where IPREM is the reference indicator for determining social benefits in Spain. This may be increased by 0.1 times the IPREM for each dependent child or person over 65 years of age in the family unit (0.15 if it is a single-parent family unit). This limit will rise to four or five times the IPREM if any member of the family unit has been declared disabled at more than 33% or 65%, respectively.
- The rent plus basic household expenses and supplies, is greater than or equal to 35% of the net income received by all household members.
- None of the members of the family unit can be the owner of a dwelling or have legal use of a dwelling in Spain. You will have to prove that you cannot access that property in order to receive rental support.
How do you prove that you are a vulnerable tenant?
In order to prove to the landlord that the tenant is vulnerable, the tenant must present the following documents:
a) In the case of a legal situation of unemployment, this can be proven by means of a certificate issued by the entity that manages the benefits, in which the monthly amount received as unemployment benefits or subsidies is stated.
b) In the case of cessation of activity by self-employed workers, by means of a certificate issued by the "Agencia Estatal de la Administración Tributaria" (State Tax Administration Agency) or the competent body of your Autonomous Community, where appropriate, on the basis of the declaration of cessation of activity declared by the person concerned.
c) Proof of the number of people who live in the usual dwelling: you must present your family book, certificate of registration relating to those registered in the dwelling (empadronamiento) in the previous six months, as well as a declaration of disability, dependency or permanent disability if applicable.
d) Ownership of goods: you need a "nota simple" from the index service of the Land Registry of all the members of the family unit.
If any of the documents cannot be provided, a responsible declaration including express justification of the reasons preventing the contribution of the income would be sufficient.
After the end of the state of alarm and its extensions, you will have a period of one month to provide the documents that have not been provided.
Which landlords have to accept the rental moratorium?
Any tenant in a situation of economic vulnerability may request the moratorium from the lessor when the latter is a company or public entity (for example EMVS) or a large holder, understood as a natural or legal person that owns more than 10 properties, excluding garages and storage rooms, or a built area of more than 1,500 m2. This is the case only if measures have not already been achieved on a voluntary basis by agreement between the two parties.
The royal decree states that this moratorium applied to large holders can be a postponement of the payment of rent or even the total or partial remission of the rental debt. In other words, the owner of the property (large holder) must choose the following alternatives:
a) A 50% reduction in the rental income for the duration of the state of alarm decreed by the Government and the following monthly payments if the period is insufficient in relation to the situation of vulnerability caused by COVID-19, with a maximum of four months in any case.
b) A moratorium on the payment of rental income, which will be applied automatically and which will affect the period of time during which the state of alarm decreed by the Government lasts and the following monthly payments, which may be extended one by one if that period is insufficient in relation to the situation of vulnerability caused by COVID-19, with a maximum of four months in any case.
This income will be deferred from the next monthly payment. The instalments will be divided up for at least three years, which will be counted from the time when the situation of vulnerability is overcome, or from the end of the four-month period mentioned above, and always within the period during which the rental contract or any of its extensions continues to be valid. The tenant will not be penalised in any way and the amounts deferred will be returned to the lessor without interest.
What alternatives do private landlords have?
In the case of a small owners, understood as those who own less than 10 properties, he or she may voluntarily accept the deferral of the payment of rent from the tenant or the total or partial remission of the same, if nothing has been previously agreed between the parties.
The owner will have seven working days to accept the conditions, but if he or she does not accept the postponement or remission (because, for example, he or she cannot afford it either), the vulnerable tenant will have access to the programme of financial assistance regulated in the Royal Decree, such as direct assistance or a micro-credit from the ICO to pay the rent. Therefore, for private owners, the moratorium is optional.