Commercial property rentals – Update

Filed under : Civil Law, Commercial Law, Legal Consultations, Property, Tenerife Office, Uncategorized

The Royal Decree-Law 35/2020 has established the possibility for small and medium-sized enterprises and self-employed workers in Spain to request a rent deferral or a 50% rent reduction before 31/01/2021, if no agreement has been reached between the parties and the owner of the premises is a “large owner” as defined by the law.

In this case, tenants can request that the rent reduction or deferral is applied during all the state of emergency period (declared by Royal Decree 926/2020 on 25th October 2020), its extensions and up to 4 months from the end of the state of emergency. The owner will have to decide the preferred option in the term of 7 working days and if no reply is given the option that was requested by the tenant will be applied; in case of deferral the rental will have to be paid in two years and always within the term of validity of the rental contract or its extensions, no interest will be applicable.

When the landlord is a small owner and no agreement has been reached between the parties, the tenant can request a temporary rent deferral before 31/01/2021 and the parties can use the deposit to pay part or all the rent; the lessee will have a term of one year to return the deposit or until the expiry date of the rental contract if this expires earlier.

In order to apply for the rent deferral or reduction the self-employed worker must be correctly registered with the Social Security and companies must not exceed the limits established by article 257.1 of the Royal Legislative Decree 1/2010 (Companies Law); they will have to prove that the activities that were carried out in the premises were suspended by presenting a Tax Office certificate, or that the turnover or income of the previous month decreased by 75% compared to the monthly turnover or income of the quarter corresponding to the same month of the previous year by presenting a declaration and the accounting books if the landlord requests it. For more information you can send an email to [email protected] (Canary Islands) or to [email protected] (Mainland Spain).