Decree Law 35/2020 to reduce the fixed costs of leasing premises

Royal Decree-Law 35/2020, of December 22, has been published, which includes new measures to support the tourism, hospitality and commerce sectors, highlighting a 50% reduction in rent on premises that belong to a company or public entity or large owners (with more than 10 properties, excluding garages and storage rooms, or a constructed area of ​​more than 1,500 m2).
In this decree, a shock plan is approved for the hotel industry and commerce, two of the sectors most affected by the Covid-19 health crisis. The star measure of the reform includes a 50% reduction in the rent on premises that belong to a company or public entity or large owners (with more than 10 properties, excluding garages and storage rooms, or a constructed area of ​​more than 1,500 m2) . Other expenses derived from maintenance or other services, and from which the lessee benefits, will be excluded.
It is about helping the Horeca sector (restaurants, hotels and cafeterias) and commerce with the aim of giving “greater certainty” to the planning of the year 2021 and minimizing costs.

Leases for use other than housing with large holders

1. In the absence of an agreement between the parties for the temporary reduction of rent or a moratorium on the payment thereof, the natural or legal person that is the tenant of a lease for use other than housing (art. 3 Law 29 / 1994, of November 24), or industry, which meets the requirements, may before January 31, 2021 request from the lessor, when this is a company or public entity, or a large holder, understanding by such the natural or legal person who owns more than 10 urban properties, excluding garages and storage rooms, or a constructed area of ​​more than 1,500 m2, one of the following alternatives:
   1. A 50 percent reduction in the rental rent for the duration of the state of alarm to contain the spread of infections caused by SARS-CoV-2, and its extensions and may be extended to the following monthly payments, up to a maximum of four months.
   2. A moratorium on the payment of the rental rent that will be applied during the period of time that the state of alarm declared by Royal Decree 926/2020, of October 25 and its extensions, lasts, and may be extended to the following monthly payments, up to a maximum of four months. Said rent will be deferred, without penalty or accrual of interest, from the next monthly rental rent to the end of the period indicated in section 3. The deferred payment of the rent may be made for a period of two years from the end of the moratorium, and always within the term over which the lease contract or any of its extensions continues, distributing the deferred amounts proportionally throughout the period.
2. In the cases in which the lease contract provides for the payment, in addition to the rental rent, of other expenses derived from maintenance or other services, and from which the lessee benefits, these common expenses will remain excluded from the measures provided for in the previous section.
3. The lessor shall expressly communicate his decision to the lessee, within a maximum period of seven working days, from the time the lessee has made his request by reliable means. From the next rental monthly payment at the end of that period, the measure chosen by the lessor from among those described in sections a) and b) will be applied automatically, or, in the absence of express communication in time, the one requested by the tenant.
4. In the event that the parties have reached an agreement on the reduction of the rent or the moratorium on its payment that affects only part of the period comprised by the state of alarm declared by Royal Decree 926/2020, of 25 October, and its extensions, as well as a maximum of four months after the end of the last extension of said state of alarm, sections 1 and 2 of this article will also apply, but the corresponding measure provided for in section 1 will apply only for the part of the period not affected by the agreement of the parties.

Attention. The provisions will not be applicable when the lessor is in bankruptcy or when, as a consequence of the application of the planned measures, the lessor is in probability of insolvency or in the face of imminent or current insolvency, in accordance with the provisions in Royal Legislative Decree 1/2020, of May 5, which approves the revised text of the Bankruptcy Law. In the same way, the lessor who intends to apply the exclusion of the application of the measure to lessors involved in bankruptcy must prove that he is in any of the situations provided for therein.

Other leases for use other than housing.

1. The natural or legal person lessee of a lease for use other than housing in accordance with the provisions of article 3 of Law 29/1994, of November 24, or industry, whose lessor is different from those defined in Article 1, and meets the requirements set forth in Article 3, may request from the lessor, before January 31, 2021, the temporary and extraordinary postponement in the payment of rent provided that said postponement or a reduction in rent it had not been agreed by both parties on a voluntary basis.
   
2. Exclusively within the framework of the agreement referred to in the previous section, the parties may freely dispose of the bond provided for in article 36 of Law 29/1994, of November 24, which may be used for the total or partial payment of any or some monthly payments of the rental rent. In the event that it is fully or partially disposed of, the lessee must replace the amount of the deposit provided within a period of one year from the conclusion of the agreement or within the remaining term of the contract, in the event that this term was less than one year.

Requirements of the self-employed and tenant SMEs to request the reduction of the rent of the commercial premises

Self-employed workers and SMEs renters of real estate for use other than housing may access the measures provided for in articles 1 and 2 of Decree Law 35/2020 when they meet the following requirements:

1. In the case of a rental contract for a property related to the economic activity carried out by the SELF-EMPLOYED worker:
   a) Be affiliated and registered, on the date of the declaration of the state of alarm by Royal Decree 926/2020, of October 25, in the Special Regime of the Social Security of Self-Employed or Self-Employed Workers or in the Special Regime of the Social Security of the Workers of the Sea or, in his case, in one of the substitute Mutualities of the RETA.
   b) That their activity has been suspended as a result of the entry into force of Royal Decree 926/2020, of October 25, or by orders issued by the competent Authority and the competent Authorities delegated under the aforementioned royal decree.
   Attention. In the event that your activity is not directly suspended as a result of the entry into force of Royal Decree 926/2020, of October 25, the reduction in billing for the calendar month prior to which the postponement is requested or Reduction of rent by at least 75 percent, in relation to the average monthly billing of the quarter to which said month belongs referred to the previous year.
2. In the case of a property lease contract related to the economic activity carried out by an SME:
   a) That the limits established in art. 257.1 Capital Companies Law.
   b) That their activity has been suspended as a result of the entry into force of Royal Decree 926/2020, of October 25, or by orders issued by the competent Authority and the competent Authorities delegated under the aforementioned royal decree.
   Attention. In the event that your activity is not directly suspended by virtue of the provisions of Royal Decree 926/2020, of October 25, you must prove the reduction in your billing for the calendar month prior to which the postponement or reduction is requested. of the rent by at least 75 percent, in relation to the average monthly billing of the quarter to which said month belongs referred to the previous year.

How to accredit the requirements?

Compliance with the requirements established in the previous article will be accredited by the tenant before the lessor by presenting the following documentation:
a) The reduction in activity will be initially accredited by submitting a responsible statement in which, based on the accounting information and income and expenses, the reduction in monthly billing of at least 75 per cent is recorded. percent, in relation to the average monthly billing of the same quarter of the previous year. In any case, when the lessor requires it, the lessee will have to show his accounting books to the lessor to prove the reduction in activity.
b) The suspension of activity will be accredited by means of a certificate issued by the State Tax Administration Agency or by the competent entity to process the extraordinary cessation of activity regulated in Article 17 of Royal Decree-Law 8/2020, of March 17 , of extraordinary urgent measures to face the economic and social impact of COVID-19, where appropriate, based on the declaration of cessation of activity declared by the interested party.

Consequences of the improper application of reduction and postponement in the payment of rent

The tenants who have benefited from the reduction and the temporary and extraordinary postponement in the payment of the rent without meeting the requirements established in article 3, will be responsible for the damages that may have occurred, as well as all the expenses generated by the application of these exceptional measures, without prejudice to the responsibilities of another order to which their conduct could give rise.