Consequences of COVID 19 for the rental market. PUBLIC AID FOR TENANTS
We promised to inform you about modifications and publications of measures adopted by the Government related to the COVID-19 emergency situation. Today we inform you about the measures related to the RENTAL MARKET.
Our financial and accounting expert, ANCACEDA, communicated us the following important updates:
The Royal Decree – Law 12/2020 of 31 March, makes a distinction between 2 types of landlords, the large holders, understood as the person, natural or legal, who owns more than 10 urban properties, excluding garages and storage rooms, or a built area of more than 1,500 m2, and small owners, understood as a person who owns less than 10 properties.
We will focus on small owners, which in our opinion are most of you, if your landlord is considered a large holder, you can contact us by private message.
As you can read below, unless agreed otherwise by the parties, it is the tenant who, in case of non-reaching an agreement, who needs to apply for the public helps.
1. Which situations are applicable?
The owner/landlord may accept from the tenant, on a voluntary basis, the temporary postponement of the payment of the rent or the total or partial waiver of the rent, if nothing has been previously agreed between the parties. It is the tenant who must request the landlord for the postponement or remission. Once the request has been received, the landlord will inform the tenant, within a maximum period of 7 working days, about the conditions for the postponement or remission of the debt that he accepts or, failing that, of the possible alternatives that he proposes in relation to these conditions.
In case the landlord is not willing to accept any voluntary agreement, and the tenant finds himself in a situation of vulnerability, the tenant may have access to a program of transitional financial assistance.
2. What are transitional rent subsidies?
These are loans from banks, guaranteed by the Government, for people who find themselves in the situation of financial vulnerability. The criteria and requirements will be supplemented by an Order from the Ministry of Transport, Mobility and the Urban Agenda. These loans have a return period of up to six years, exceptionally extendable for another four years, and do not involve any costs or interest for the applicant. This financial aid must be used to pay the rent and can cover a maximum amount of six month rent payments.
3. Can I apply for this aid?
In case find yourself in a situation of financial vulnerability due to the coronavirus, because in the month prior to the application:
- you became unemployed
- your employer had to apply for ERTE
- You had to reduce your working hours to be able to care for elderly or minors
- In case of being an employer, or other similar circumstances, you suffered a substantial loss of income
4. Do I find myself in a situation of economic vulnerability?
Tenants who, in addition to being in any of the above described situations, meet the following requirements:
- You do not reach, considering the total income of all family members, the limit of 3 times the Public Indicator of Multiple Effects Income per month (IPREM), which is more or less 1.614,00 euros/month. The IPREM may be increased by 0.1 times for each dependent child or child over 65 years of age in the family unit (0.15 if it is a single-parent family unit). This limit will be increased to four or five times the IPREM if any of the members of the family unit has been declared disabled for more than 33% or 65%, respectively.
- The amount of rent, plus basic expenses and supplies, is more than or equal to 35% of the net income received by all family members together.
- None of the family members owns or has the use (usufruct) of a property in Spain.
5. Where do I have to apply to?
Contact your financial institution, your bank through the government-backed ICO credit lines, who will inform you about the conditions.
6. How to prove that I find myself in a situation of economic vulnerability?
The tenant must prove the economic vulnerability to the bank, by submitting the following documents:
a) In case of a legal situation of unemployment: a certificate from the unemployment office which confirms the monthly amount of unemployment benefits or subsidies.
b) In case you are self-employed and (temporary) and you had to stop your activities: a certificate from the State Tax Administration Agency ( Agencia Estatal de la Administración Tributaria) based on your declaration of cessation of the commercial activity.
c) The number of persons living in the habitual residence:
- a family book or a document certifying the unmarried partner
- a certificate regarding the persons registered in the property, referring to the actual situation and the previous six months
d) Ownership of properties: nota simple from the Land Registry (Registro de la propiedad) covering all family members.
e) A declaration from the debtor or debtors that they meet the requirements for being considered as finding themselves in a situation of economic vulnerability.
This declaration will temporarily replace the previous requested certificates, in case they can not be provided, and it must include a justification of the reasons, related to the consequences of the COVID-19 crisis, which makes it impossible to present the requested documents.
After the end of the state of alert and its extensions, you will have a term of one month to provide the missing documents.
7. When can I apply for this aid?
Tenants who are facing a situation of financial violation can submit an application from April 2nd to May 2nd 2020.
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