Following the recent information note issued by this firm related to COVID-19, we inform you that on 24th March 2020, it was announced that the Government of Spain is ending up measures to help citizens who have problems paying their rent.
While this publication is being made, we are sending you a first appreciation of the impact that the declaration of the state of alarm has on the rental agreements of premises and any other use other than housing, which are those initially affected by the order to close to the public.
It is important to take into account that the current situation of health crisis does NOT automatically imply the suspension of the effects of the lease that is in force.
In fact, the tenants retain the possession and the use of the leased premises and therefore the obligations arising from the contract, including the payment of the rent, are fully in force.
However, in view of the nowadays’ exceptional circumstances and in order to adjust the imbalance that this unforeseen situation may be producing in the lessees, it would be possible to defend the application of legal instruments such as the Rebus Sic Stantibus clause.
The referred clause may be used when there is: 1) an extraordinary alteration of circumstances between the time of conclusion of the contract and the time of its performance; 2) there is an exorbitant disproportion between the obligations to be performed by the parties; 3) the cause is radically unforeseeable; 4) there is no other means of saving the damage.
It could therefore be argued that the rent should be reduced in order to mitigate the effects of the current crisis, but always bearing in mind that the principle of preservation of the legal transaction and the balance of benefits should prevail.
It would be advisable to reach temporary agreements between landlords/landladies and tenants to try to mitigate the effects of the current situation, which should be formalized in writing in order to avoid future tax implications.
For their part, the measures that the Government of Spain may take soon seem to be aimed at a moratorium on rent payments, an option that real estate companies and banks have launched in recent days.
We will keep you informed of any new legislative developments related to the effects of COVID-19.
If you have any queries regarding the effects of COVID-19, please do not hesitate to contact this firm by e-mail at firstname.lastname@example.org