Government measures in key jurisdictions 3rd edition final - Flipbook - Page 118
Spain
Contractual
Issues
What measures
have been taken
to reinforce
contracts?
•
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
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%).
Property
Have any changes
been made to
the laws around
property, rent and
enforcement?
•
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