Government measures in key jurisdictions 5th edition - Flipbook - Page 129
Spain
•
There has not been any outstanding measure taken by the Spanish Government
regarding the specific reinforcement of contracts, therefore, normal rules would apply.
•
When it comes to contract suspensions and reductions in working hours that are directly
caused by losses in activity as a result of Covid-19, a legal provision has been included in
Royal Decree-law 8/2020, of March 17 (RDL 8/2020) stating that those specific cases shall
be considered as force majeure, when duly verified.
•
It should be taken into account that the force majeure term relates with the
impossibility of the parties to perform their respective obligations due to the existence
of an event that could not have been foreseen or that, if foreseen, were inevitable. In
this respect, the scope and applicability of the force majeure would be subject to the
specifics of each case, which shall be, in last instance, examined and determined one
by one by the judicial courts.
•
Likewise, if the performance of a contract is significantly affected due to unforeseen
circumstances, it should be considered that there is a legal doctrine on hardship created
by case law, that allows obligations and contracts to be reviewed when the economic
balance of the contract has been upset and the contract has become impossible or very
difficult to perform for one of the parties due to those unforeseen circumstances.
However, it should be noted that the Spanish courts have hitherto applied hardship
principles very cautiously and the specific characteristics of each case must be
thoroughly looked at to determine whether it is applicable.
•
For more information, please visit: Companies facing the Covid-19 crisis and Force
majeure and the grounds for suspension of contracts due to Covid-19 cannot be
regarded as justifying dismissal
Property
•
Have any changes
been made to
the laws around
property, rent and
enforcement?
RDL 8/2020 incorporates a moratorium in favour of mortgage debtors who are in a
particularly vulnerable situation (i.e. the mortgagor becomes unemployed or, in the
case of a businessman, suffers a substantial loss of income or a substantial drop in
sales, that is, at least 40%).
•
If the landlord is an entity or a public housing company (entidad ‘pública de vivienda’) or a
large individual holder (i.e. an individual owning more than 10 properties or owning a built
facility bigger than 1,500 sq.m), the tenant may request temporary and extraordinary
deferment of the rent of his/her principal residence within one month from the enter into
force of Royal Decree-law 11/2020, March 31, provided that said deferment or the total or
partial remission of the rent has not already been achieved voluntarily by agreement
between both parties. In the event that the agreement had not taken place, the landlord
may choose between the following alternatives:
Contractual
Issues
What measures
have been taken
to reinforce
contracts?
– a 50% reduction over the rent while the state of emergency is in force, or
–a moratorium on the payment of the rent that will be applicable during the term of the
state of emergency (and which may be extended monthly if that term is insufficient in
relation to the situation of vulnerability caused by the Covid-19), and which may not, in
any case, exceed four months.
•
In line with the above, Royal Decree-Law 15/2020 has extended, in one additional month
starting from April 23 2020, the term granted to the tenant to request a moratorium on
the rent payment. However, in this case, the moratorium will be automatically binding to the
landlord, and the same conditions as indicated above will apply.
•
Likewise, measures related to the suspension of the eviction procedures as well as the
removals of judicial releases for vulnerable households without alternative housing
have been introduced.
Government measures in key jurisdictions
129
