- Royal Decree-Law 15/2020, published on 22 April, lets the self-employed and small businesses defer rent on shops, industrial units and other non-residential premises.
- If the landlord is a public housing body or a large property holder, the moratorium applies automatically if requested within one month.
- Deferred rent accrues no interest and is repaid over two years; you must show that the activity was suspended or that turnover fell by at least 75%.
Royal Decree-Law 15/2020 of 21 April, on complementary urgent measures to support the economy and employment, was published in the Official State Gazette on 22 April and came into force on the 23rd. Its first chapter governs leases for non-residential use, that is, of business premises, industrial units or workshops, where the tenant is a self-employed person or small business affected by the state of alarm.
Until then, tenants had negotiated case by case, with uneven results, and many landlords refused to reduce or defer rent while the premises were closed. The decree-law offers a framework: an automatic moratorium against large landlords and a deferral request against the rest, provided the requirements are met and the request is made within one month of its entry into force.
Two different situations
If the landlord is a public housing company or body, or a large property holder, that is, owner of more than ten urban properties, not counting garages and storerooms, or of more than 1,500 square metres built, the tenant can request a moratorium that the landlord must accept unless another has already been agreed. It covers the state of alarm and its extensions plus the following months, up to a maximum of four, and is repaid in instalments over two years, with no penalty or interest.
If the landlord is anyone else, the tenant can request a temporary, extraordinary deferral of rent, provided that a voluntary deferral or reduction has not already been agreed. Within this framework the parties may freely use the deposit to pay all or part of one or more monthly rents; the tenant must restore it within a year or the time remaining on the lease, if shorter.
Who can ask
The self-employed person had to be registered in the self-employed social security scheme on the date of the state-of-alarm decree, and the activity had to have been suspended by that decree or by orders of the authorities. If the activity was not suspended, a fall in turnover of at least 75% in the previous month must be shown, compared with the monthly average for the equivalent quarter of the previous year. Small companies must also stay within the limits the companies act sets for abridged accounts.
The drop in activity is shown with a sworn declaration based on the accounts, and the landlord may ask to see the books. The suspension of the activity is shown with a certificate from the Tax Agency or the competent regional body. Anyone who benefits from the deferral without meeting the requirements is liable for damages and the costs incurred.
What to do
The one-month period to apply is short. If you are a tenant, check at once whether you fall into one of the cases, gather the documents and send the request by a means that leaves a record. If you had already reached an agreement with the landlord, the decree does not apply, so it is worth putting it in writing.
If you are a landlord, check whether you are a large holder and what requests have arrived. A reasonable renegotiation, with a realistic schedule, is usually better than a prolonged dispute at a time when an empty premises is a loss for both parties. In any case, consult your legal adviser before answering a request or signing an agreement.
Deferred rent is a debt to be repaid: it is worth including it in the cash plan now.
This article is general information. It is not legal, tax or investment advice, and it does not take anyone’s particular circumstances into account.
