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Rentals and coronaviruses: Measures taken by the government in housing leases

The Government, through the Real Decreto  11/2020, of March 31, adopted a package of urgent measures to support families and the most vulnerable people who have their economic capacity affected due to the COVID-19 crisis, and that they have serious difficulties in paying the rent for their habitual residence.

Therefore, and the first thing that we must take into account is that the measures adopted are intended to be able to afford the income of the habitual residence and not rents from second residences, premises or garages, etc.

Below we present the measures established by the aforementioned Royal Decree:

1. Suspension of the eviction procedure and of the removals of vulnerable households without housing alternatives.

As of the writing date of this article, the procedural terms and deadlines are still suspended, until the state of alarm ends and they are lifted, these are established as a measure that tenants who prove to the Court are in a vulnerable situation, either social or economic as a result of the effects of COVID-19 and that the latter is the reason that they are unable to find an alternative housing for themselves and for the people with whom they live, this circumstance will be communicated to the Social Services and an extraordinary suspension of the launch act.

In the event that a removal date was not yet indicated, it will be suspended until the appropriate measures are adopted by Social Services for a maximum period of 6 months from the entry into force of the Royal Decree-Law.

2. Extraordinary extension of the leases of habitual residence

Regarding those leases of habitual residence in which its termination is foreseen within the period from the entry into force of the Royal Decree-Law until the day that elapses 2 months from the end of the state of alarm, an extraordinary extension may be applied of the term of the lease for a maximum period of 6 months. This extraordinary extension must be requested by the tenant and the owner must assume it since it is mandatory for him, even if he was not satisfied with it, all this unless other conditions are set and there is a complete and mutual agreement between the two parties. 

3. Automatic application of the moratorium on the rental debt in the case of large holders and companies or public housing entities.

The lessee of an habitual residence contract may request the lessor for the temporary and extraordinary postponement of the rent payment, but the following conditions must be met: 

- The tenant must be in a situation of economic vulnerability. This situation is defined and included in the article 9 of the Royal Decree-Law, and the following are examples: becoming unemployed, ERTE, reduced working hours for reasons of care in the case of employers and the like with a substantial loss income, etc.

- The owner must be a company or public entity or a large holder, that is, a person who owns more than ten urban properties (excluding garages and storage rooms), or an area of more than 1,500m2.

- The request must be made within a maximum period of 1 month from the entry into force of the Royal Decree-Law.

To said application and in the case of not existing any previous agreements between both parties, the owner has a maximum of 7 labour days in which they will have to communicate the tenant their chosen decision between the following alternatives: 

A reduction of the 50% of the rent during the time that the estate of alarm is into force, decreed by the Government and the following monthly rents, with a maximum of 4 months, if the situation of vulnerability of the tenant was provoked by the COVID-19 and it is maintained. 

- A moratorium of the term of the rent will be applied automatically and will affect the whole period of the estate of alarm and to the following monthly rents, extendable one by one, if the situation of vulnerability of the tenant, provoked by the COVID-19, is maintained, noting that in no case can be over 4 months, fractioning the extended quotas during, at least, 3 years, without default interests. 

4. Leases of habitual residence in the case of owners who are natural persons.

The tenants that are in a situation of economic vulnerability may apply to their lessors/owners in a term of 1 month since the entry in force of the Royal Decree the temporary and extraordinary extension of the payment of the rent. To this application, the owner shall communicate their decision in the maxim term of 7 labour days. 

Even though the latter, if the owner does not accept any agreement, if the tenant credits their situation of economic vulnerability provoked by the COVID-19, they will have access to the financial measures established by the Government. 

5. Approval of a line of guarantees to finance tenants in situations of social and economic vulnerability.
The banking entities will offer financing with full coverage of the State to people who are in the aforementioned situation of vulnerability, in order to be able to pay the rent of their habitual residence, with a repayment term of up to 6 years, extendable for another 4 years, without in any case accruing expenses and interests for the citizen. It is important to keep in mind that these grants must be used to pay the rent and that said financing may cover a maximum amount of 6 monthly payments.

6. New aid program to help minimize the economic and social impact of COVID-19 on regular home rentals

These aids will be granted to those tenants who have problems in paying partial or total rent, because they have not recovered from their vulnerable situation caused by COVID-19. Such aid will be used to meet the repayment of the loans (temporary aid) mentioned above.

The amount of this aid will be up to 900 euros and up to 100% of the rent or, where appropriate, up to 100% of the loan that has been signed with which the payment of the rental of the house has been satisfied. Each Autonomous Community will determine the exact amount of these grants.

These are roughly the urgent measures adopted by the Government in order to help the tenants with the rent payment of their habitual residence, taking into account that there are particularities to consider in each specific case in order to know if you can choose to a deferment or fractioning of the payment of the rent or to the transitory aids of financing in its case.

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