Lease contracts during Covid-19.

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The exceptional situation in which we live as a result of the consequences of the pandemic caused by the Covid-19, has caused the cracking of normal compliance of contracts. Amongst them, those related to urban leases, both for housing or a different use.

As a result, there are cases where the outbreak of the pandemic has placed tenants in an exceptional situation resulting in the inability to pay rents agreed, due to decreasing revenues or, in the case of commercial premises or warehouses, the impossibility to carry out the economic activity due to the compulsory closing of businesses.

Assuming that the general principle has been and should be to comply with the terms of the contract, the truth is that the exceptional nature of the situation means that, logically, everyone must share the sacrifice and losses created by an unexpected and unpredictable situation like the impact of Covid-19.

Given this situation, in terms of leases, the legislator has chosen to:

  • Regulate remedies and solutions of obligatory compliance with express legal provisions in cases involving companies and public entities or large holders as lessors, vulnerable people as lessees, leases for use other than housing, self-employed or SMEs. These remedies are regulated in Royal Decree 11/20 of March 31 and which entered into force on April 2, 2020 (for regular home leases); and in Royal Decree 15/20 of April 22, 2020 (for leases of different use).
  • Not regulate and leave it to the parties involve to reaching an agreement in the rest of cases, both in leases related to housing or any other use. This means that, in the event of not reaching an agreement, the parties may go to Court to defend their interests: the landlords demanding payment of what is owed to them, or even urging eviction for non-payment, and the tenants requesting the temporary cancellation or reduction of the rent payment or its postponement, and it will be the Court (or arbitration bodies or mediators if the parties agree to go to them), who will decide the resolution of the situation after examining the specific circumstances of each case.
We analyze each of the options in more detail: READ COMPLETE ARTICLE

 

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