What Spain is doing to help rental tenants during the coronavirus pandemic

The government has announced an aid package to help the most vulnerable members of the community through the COVID-19 crisis.

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Photo by Sunyu on Unsplash
2 April 2020, Emma Donaldson

The Spanish government has approved an aid package of measures focusing on helping struggling rental tenants in the country. According to calculations made by the government, some 500,000 tenants could be affected by the economic consequences of the coronavirus outbreak. Measures include access for vulnerable tenants to state-sponsored micro-loans, a six-month extension of rental contracts that end from 1st April 2020 and preventing evictions until the end of the year. Let’s have a look at the measures in more detail.

Evictions

From 1st April 2020, evictions have been suspended in Spain, a measure that will remain in place for up to six months after the end of the state of alarm. During this period, nobody can be evicted from any property.

Contract extensions

Rental contracts due to expire in Spain will automatically be renewed for a further six months. This applies to contracts ending from 1st April 2020 and will be active for two months, subject to extension. The introduction of this measure also means that landlords will not be able to raise rent during the next six months.

Micro-loans

As a part of this aid package, the government has also implemented a “micro-loan” scheme. Aimed at the most vulnerable members of the population who have been worst affected by the crisis. These loans come without interest or commissions, are guaranteed by the State and are to be repaid over a period of six years. This scheme will be open to all those who cannot pay the monthly rent for their homes due to employment loss, an ERTE (temporary lay-off) or reduced working hours. The measure has also been extended to the self-employed who are suffering a substantial fall in their income and consequently struggle to pay rent.

Landlords

In this case, there is a difference between small and large property owners (i.e. private landlords with one or two properties, or investors with a large quantity of rented properties). Small owners will receive the rent of their house in full; however, large owners may choose between the following options: reducing the tenant's rent to 50% or restructuring it over three years. If the tenant's debt is reduced by 50%, it will be for the duration of the state of alarm and the following monthly payments if necessary in relation to the situation of vulnerability caused by the Covid-19 outbreak, with a maximum in any case of four months.

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