Commercial property rentals & COVID-19

Filed under : Commercial Law, Conveyancing & Property Law

Royal Decree Law 15/2020 established the possibility for small and medium-sized enterprises and self-employed workers in Spain to request a postponement in the payment of the rental of the premises that are used to carry out their activity if this was suspended as a consequence of the COVID-19 pandemic, or if this has not been suspended but their turnover has decreased by 75% compared to the same quarter of the previous year.

To be able to request the postponement, the self-employed worker must be correctly registered with the Social Security and companies must not exceed the limits of annual turnover, number of employees and assets indicated in article 257.1 of the Royal Legislative Decree 1/2010 (Companies Law).

The procedure is similar to that established for main home rentals and changes depending on whether the landlord is a ”large owner” (with more than 10 urban properties, excluding garages and storerooms, or with a property with a built area of over 1,500 square meters) or a small owner.

In the case of ”large owners”, tenants can request a postponement in the payment of the rental in the term of one month as from the date the decree came into force (until 23rd May 2020) which will be automatically applied during the state of emergency and which may be extended monthly up to a maximum of four months. The owner will have to accept the request and the rental will have to be paid in two years without interest.

When the landlord is a small owner, the parties can use the deposit to pay part or all of the rental and the lessee will have a one-year term to return the deposit.

The lessee will have to submit the relevant declarations and documentation to confirm that he meets the requirements to request the postponement and in case he does not meet them he will be responsible for the damages. For more information you can contact us by phone on +34 922719520 or send an email to [email protected]