Government measures in key jurisdictions 2nd edition final pages - Flipbook - Page 90
Spain
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Contractual
Issues
What measures
have been taken
to reinforce
contracts?
Property
Have any changes
been made to
the laws around
property, rent and
enforcement?
•
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
•
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:
– 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.
•
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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.
Government measures in key jurisdictions
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