The royal decree approved at the initiative of the Ministry of Industry of Reyes Maroto in terms of leases with a use other than housing, that is, commercial, delegates the future of the sector in the predisposition to negotiate mutually between landlords (mainly small ones) and their tenants (large, medium and small companies and self-employed), as they agree different agents in the sector.
The large print of the Decree establishes an automatic four-month moratorium on rent payments by SMEs or freelancers who are tenants of large landowners, and the possibility that SMEs or freelancers who have a small landlord can also ask for “temporary and extraordinary” deferrals.
Freelancers who can prove a drop of 75% of income, and SMEs whose assets do not exceed four million euros for two consecutive years and / or whose annual turnover does not exceed eight million euros may demand or request deferrals for two consecutive years and / or whose average number of workers during the year does not exceed 50.
Unresolved legal void
Thus, legal experts consulted by Vozpópuli they warn that the decree, as it is written, leads to tenants -even if they are SMEs or freelancers who fit the above assumptions-, and small landlords to negotiate, this is, no real moratorium has been decreed as such for these cases therefore, if the parties do not agree, nothing would stop the matter from going to court, since the tenant could have arguments even to claim the cancellation and the landlord, to claim the payments with diligence.
“The section dealing with those cases in which it is a matter of lessors not considered large holders or entities or public companies, which will not be few, is unclear and imprecise. On the one hand, although it is not clearly stated, it would have to be understood that an agreement between both parties must necessarily mediate in order for the postponement to apply in that case. In any case, it is not clear what happens if the lessor does not accept the tenant’s proposal, nor is the amount of the deferment or the term of return of the deferred amount mentioned, “he warns. Jacobo Sánchez-Andrade, Counsel of the real estate law area of the law firm Bird & Bird.
“In the justification of the decree it is explained that it was intended to provide a legislative solution to the situation generated in the leases, providing a solution to the current legal vacuum, and transferring to the text of the new rule a ‘specific regulation in line with the clause rebus sic standibus, of jurisprudential elaboration, which allows the modulation or modification of the contractual obligations if the required requirements are met: unpredictability and inevitability of the derived risk, excessive onerousness of the due provision and contractual good faith, “he explains. Pedro Albarracín, Director at Andersen Tax & Legal.
This issue “will surely further collapse our courts in coming months with claims arising from conflicts arising from lack of clear criteria”
“As can be seen, that ‘intention’ has not been reflected in the final wording of the approved measure, since the final content of the same only introduces the possibility of SMEs and freelancers to temporarily postpone the payment of rent , and only on a mandatory basis for the lessor when the lessor is a company or public entity or a ‘large holder’, thus leaving aside all other possible leasing relationships, “adds Albarracín on a matter that, in his opinion, “our Courts will collapse even more in the coming months with claims derived from the conflicts that arose due to the lack of a clear criterion.”
Doubts about the deposit
“The Government’s solution is for the owner and lessor to fully bear the cost of the measures, without any specific financial aid being provided in this regard,” he says. Ignasi you live, lawyer of the office Sanahuja Miranda.
Unlike what happened with residential rents, the Government has not established in this case a direct line of loans or aid for tenants (neither large nor small landlords) but has adhered to allow small landlords to use their tenants’ bonds for the transitory payment of the income of a way that also raises legal questions.
“When (the Government) enables the bond to be used, it is not clear which one it refers to. If it is the legal bond, it will normally be deposited by the lessor in the corresponding autonomous body, so to have it the landlord must go to your claim before the end of the lease (notwithstanding that this would mean a serious temporary decrease in the source of financing of these CCAA if the use of this resource becomes general) “, says Sánchez Andrade.
“This without counting the cases in which the lessor had not complied with its obligation to deposit the bond, assuming that it leaves the lessor in an uncomfortable position, because if she could dispose of that amount by having it in her possession, she would be hinting at her non-compliance in front of the lessee and the Administration (the latter may even impose penalties for not having made such a deposit.) In the case of an additional deposit, if this were, for example, a bank guarantee, it would not be available without execute the guarantee itself (which would not make sense.) Therefore, the clearest and most direct way in which we understand the bond could be immediately available would be in cases where there is an additional cash bond (other than the legal one ) held by the lessor. “
The approval of said financial support measure (bond) may be one more argument for those who defend the non-validity of the suspension of the obligation to pay the rents ”
“The approval of said measure of financial support may be one more argument for those who defend the non-provenance of the suspension of the obligation to pay the rents since it is conceivable that, if our Government considers that with the current legislation, if it were appropriate said suspension, it would not have been necessary to approve the possibility of postponing the payment of the rents, “adds Albarracín.
“Notwithstanding the foregoing, this question does not necessarily have to be decisive and / or binding in any way when, in the coming months, when the courts begin the analysis and resolution of the specific conflicts that arise, accept or reject the possible claims of those potential tenants who, taking into account their particular circumstances, defend an eventual origin of the suspension or termination of their lease contracts under the clause rebus sic standibus or because of force majeure. “
Four months of grace and uncertain future
At the same time, the great landlords have been forced to pay the rents for a maximum period of four months and collect those rents within a period of two years without penalty for the tenant.
“We hoped that the Government would offer greater support to a sector as key as a catalyst for the economy, which will be closely linked to the recovery in domestic consumption. We regret that the approved measures have not been extended to the entire retail sector, affecting only to the self-employed and to small and medium-sized companies, when the crisis situation is shared by all “, they have stated from the Association of Estate Agents with Rental Property, the employers of large owners, including companies such as the one listed on the Ibex, Merlin Properties, or GMP.
“We miss more support from the Administration with direct aid to meet those payments that are deferred, as they were granted in moratoriums for housing through ICO loans, and as other neighboring countries have done where governments do they are covering part of the rents during the mandatory closing period, “they add, while arguing:” We positively appreciate that the temporary moratorium has been chosen as a standard as a benchmark criterion, which will help to apply a homogeneous criterion in the ongoing negotiations, offering all parties greater legal certainty. “
“For some sectors, such as the hotel industry (in case the tenants-operators obviously meet the SME criteria), the maximum period of four months of postponement may be insufficient, taking into account that the 2020 season is seriously compromised”, Sánchez Andrade warns in parallel.
It is perceived that many landlords are seeking to reach agreements because it may be more problematic to find a tenant now for small holders, or in four months in the case of large holders, than to give up on the rents ”
“It is perceived that many landlords were and are seeking to reach agreements because perhaps the litigation is not profitable at this point and / or because it may be more problematic to find a tenant now for small holders, or in four months in the case of big, that yield in the rents “, affirms an important source of the sector.
“The general predisposition is that agreements be reached for deferrals or even waivers and that judicial recourse is not used, although the wording of the decree does not help,” says another market source. “It is a reality that even within the world of large landowners, who are obliged to postpone if asked, there will be many who can endure these four months without passing it on in any way, but there will be others who will not.”