Requirements for the Moratorium on Lease Payments

In this article we will explain the requirements for the moratorium on the payment of leases, according to RDL 15/2020 of urgent complementary measures to support the economy and employment.

It should be noted that the moratorium applies only to leases for use other than housing.

Requirements for the application of the moratorium

If you are self-employed:

1.- To be affiliated and in situation of subscribed, in the date of the declaration of the state of alarm in the following regimes:

1. The Special Social Security Scheme for Self-Employed or Self-Employed Workers or,
2. The Special Social Security Scheme for Sea Workers or,
3. One of the Mutual Insurance Companies substituting the RETA.

2. That its activity has been suspended as a consequence of the entry into force of:

1. Royal Decree 463/2020, of March 14, or.
2. by orders issued by the competent authority.

3. In the event that its activity is not directly suspended by the State of Alarm. It will be able to be applied as long as the following condition is fulfilled:

To credit the reduction of the turnover of 75 %. This turnover with respect to the calendar month prior to the one in which the deferral is requested. It will be compared with the average monthly billing of the quarter to which said month belongs referred to the previous year.

If you are an SME:

1.- That the following limits are not exceeded:

a) That the total asset items do not exceed four million euros.

b) That the net amount of its annual turnover does not exceed eight million euros.

c) That the average number of workers employed during the year does not exceed fifty.

2.- That its activity has been suspended as a consequence of the entry into force of the Royal Decree Law of the state of alarm.

3.- In the event that its activity is not directly suspended it will also be able to be applied. This will occur when there is a 75% reduction in turnover. In the previous calendar month to which the postponement is requested. And in relation to the monthly average invoicing of the quarter to which this month belongs referred to the previous year.

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Rebus sic stantibus clause in business premises leases after covid-19.

The application of the rebus clause was made more flexible by the Supreme Court after the economic crisis of 2008. However, to date, the High Court considers that its application is not automatic, and it must be analyzed on a case-by-case basis.

Leases for use other than as a housing with Large Holder.

The lessee who meets the above requirements:

1. It may request from the lessor, when the lessor is a company or public housing entity, or a large holder,
2. Within one month from the entry into force of this Royal Decree-Law,
3. The moratorium will last as long as the state of Alarm lasts and may be extended for a maximum of 4 months,
4. It must be accepted by the lessor, provided that an agreement had not already been reached between both parties for a moratorium or reduction of the rent.

What is meant by “Large Holder”?

Large holder is understood as the natural or legal person who is the owner of more than 10 urban properties. This excludes garages and storage rooms, or a built-up area of more than 1,500 m2.

The moratorium on the payment of rent will be applied:

1. Automatically
2. It will affect the period of time that the state of alarm and its extensions last. It may also affect the following monthly payments, which may be extended one by one, if that period is insufficient in relation to the impact caused by COVID-19. This may not exceed, in any case, four months.
3. This rent shall be deferred, without penalty or accrual of interest, as from the following monthly rent payment. It will be applied by means of the fractioning of the installments over a period of two years. They will be counted:
   1. From the moment in which the aforementioned situation is exceeded.
   2. Or from the end of the aforementioned four-month period.
   3. And always within the term of the lease contract or any of its extensions.

Other non-housing leases

When the Lessor is neither:

1. Company or public housing entity nor,
2. Large tenant

The Lessee that fulfills the previous requirements, will be able to:

1. Request temporary and extraordinary deferment in the payment of rent. Provided that such deferment or a reduction of the rent has not been agreed upon by both parties on a voluntary basis.
2. This measure must be requested within one month from the entry into force of this Royal Decree-Law.
3. Exclusively within the framework of the agreement. The parties may freely dispose of the deposit provided for. This may be used for the total or partial payment of some or several monthly payments of the lease rent. In case of total or partial disposition of the same one, the lessee will have to replace the amount of the deposit within one year. Annuality that will count from the celebration of the agreement or in the remaining term of the contract, in case this term is shorter than one year.

Proof of the requirements

The fulfillment of the established requirements will be proved by the lessee with the presentation of the following documentation:

1. The reduction of activity will be accredited initially: By means of the presentation of a responsible statement.
   1. This will be made on the basis of the accounting information and of income and expenses.
   2. The reduction of the monthly invoicing in, at least, 75 per cent will be recorded.
   3. This 75 % will be taken into account with the monthly average invoicing of the same quarter of the previous year.
   4. In any case, when the lessor requires it, the lessee will have to show its accounting books. This will accredit the reduction of the activity.
2. The suspension of activity, will be accredited:
   1. By means of certificate issued by the State Agency of the Tributary Administration or.
   2. The competent organ of the Autonomous Community, in its case,
   3. It will be made on the basis of the declaration of cessation of activity declared by the interested party.

Consequences of the improper application of the temporary and extraordinary deferment in the payment of the rent.

The tenants who have benefited from the temporary and extraordinary deferment in the payment of the rent without complying with the established requirements:

1. Shall be liable for any damages that may have been caused,
2. And for all the expenses generated by the application of these exceptional measures,
3. Without prejudice to the responsibilities of other order to which the conduct of the same could give rise.

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Validity of contracts in coronavirus period.