Update: Government aid for tenants.
As we all know, we are living through absolutely crazy times in which information comes almost out of date. It is necessary to be updated on all the issues that are emerging day by day.
Today we are going to update the issue of government aid to tenants.
The first idea that I want to convey to you is that, this information has been prepared with great effort and care, due to the regulatory changes that occur day by day in our country.
Who can be a beneficiary of this aid?
The Royal Decree-Law 11/2020, of March 31, defines who can be the beneficiary of this aids:
a) That the person who is obliged to pay the rental income becomes unemployed, Temporary File of Employment Regulation (ERTE), or has reduced his working day due to care, in case of being an entrepreneur, or other similar circumstances that suppose a substantial loss of income, not reaching therefore the total income of the members of the family unit, in the month prior to the request for the moratorium:
- i. In general, the limit of three times the monthly Multiple Effects Public Income Indicator (hereinafter IPREM).
- ii. This limit will be increased by 0.1 times the IPREM for each dependent child in the family unit. The applicable increase per dependent child will be 0.15 times the IPREM for each child in the case of a single-parent family unit.
- iii. This limit will be increased by 0.1 times the IPREM for each person over 65 years of age who is a member of the family unit.
- iv. In the event that any of the members of the family unit has a declared disability of more than 33 percent, a situation of dependency or illness that renders him permanently incapacitated to carry out a work activity, the limit established in subparagraph i) will be four times the IPREM, notwithstanding the accumulated increases per dependent child.
- v. In the event that the person obliged to pay the rent is a person with cerebral palsy, mental illness, or an intellectual disability, with a recognized degree of disability equal to or greater than 33 percent, or a person with a physical or sensory disability, with a recognized degree of disability equal to or greater than 65 percent, as well as in cases of serious illness that renders the person or their caregiver incapable of carrying out a work activity, the limit established in subparagraph i) will be five times the IPREM.
b) That the rental income, plus basic expenses and supplies, is greater than or equal to 35 percent of the net income received by all the members of the family unit. For these purposes, «basic expenses and supplies» shall mean the amount of the cost of supplies of electricity, gas, diesel for heating, running water, fixed and mobile telecommunication services, and possible contributions to the community of owners , all of them of the habitual residence that corresponds to satisfy the lessee.
- For the purposes of the provisions of this article, a family unit shall be understood to be that made up of the person who owes the rental income, his or her legally separated spouse or registered partner, and the children, regardless of age, who reside in the dwelling, including those linked by a relationship of guardianship, guardianship or foster care and their non-legally separated spouse or registered domestic partner, who reside in the dwelling.
- The assumptions of economic vulnerability as a consequence of the health emergency caused by the COVID-19 will not be understood to occur in order to obtain moratoriums or aid in relation to the rental income of the habitual residence when the lessee or any of the people who make up the family unit that inhabits that is the owner or beneficial owner of a home in Spain. These circumstances will be considered not to exist when the right falls only on an aliquot part of it and has been obtained by inheritance or by transmission mortis causa without testament. Also exempt from this requirement are those who, being the owners of a dwelling, prove their unavailability due to separation or divorce, for any other reason beyond their control or when the dwelling is inaccessible due to the owner’s disability. or one of the people who make up the coexistence unit.
How to get that aid:
A ministerial order published in the BOE last Saturday, April 11 has developed the rental aid for tenants affected by the covid-19 that the government had already announced in March. Thus, it will give up to 900 euros a month (without exceeding 100% of the rent) to pay the lease for half a year for those tenants who have not been able to face the payment of microcredits guaranteed by the State.
This aid of 900 euros per month, developed within the 2018-2021 State Housing Plan, can only be requested by those tenants who have not recovered from the vulnerable situation and cannot cope with the return of the microcredit guaranteed by the State. The BOE explains that this aid may be granted for a period of up to six months, and may be included as the first monthly payment for the month of April 2020.
We remind that before requesting these aids, the tenant and the owner must negotiate a solution for both parties. Any tenant in a situation of economic vulnerability may request the moratorium from the landlord when the landlord is a company or public entity (for example, EMVS) or a large holder, understanding as such a natural or legal person who owns more than 10 homes.
So, 1st step.- Negotiation with the owner.–
a.- The lessee may request from the owner (when he is not considered as a large owner), within a month from the entry into force of Royal Decree-Law 11/2020, of March 31, the temporary and extraordinary postponement in the payment of the rent, provided that said postponement or the total or partial cancellation of the same had not been previously agreed between both parties on a voluntary basis.
b.- Once the request is received, the owner will communicate to the lessee, within a maximum period of 7 working days, the conditions of deferment or deferred fractionation of the debt that it accepts or, failing that, the possible alternatives that it raises in relationship with them.
c.- If the leasing natural person does not accept any agreement on the postponement and, in any case, when the owner is in the situation of supervening vulnerability referred to in article 5 of the Royal Decree Law, he may have access to the temporary aid program of financing.
How to comunicate the owner that negotiation.- Follow this easy example:
This letter must be sent to the owner. Of course, the best way is via BUROFAX, but also is accepted e-mail, or simply, a copy signed by the owner and dated. DON´T FORGET YOU HAVE ONE MONTH TO SEND IT, FROM THE DATE OF 31ST MARCH. This is an example of letter to the owner in spanish and english.
«NOMBRE DEL PROPIETARIO
Dirección del propietario
Fecha
Estimado señor,
Por medio del presente escrito, y en virtud de lo prescrito en el artículo 8 del Real Decreto-ley 11/2020, de 31 de marzo, por el que se adoptan medidas urgentes complementarias en el ámbito social y económico para hacer frente al COVID-19; pongo en su conocimiento que en la actualidad me encuentro en situación de vulnerabilidad económica, tal y como se define mediante el artículo 5 de dicha norma, lo cual le acredito poniendo a su disposición la documentación que estime oportuna.
A tal efecto, ruego me indique si es posible y tiene a bien considerar el aplazamiento temporal y extraordinario en el pago de la renta.
Dadas las circunstancias manifestadas, ruego me comunique por esta misma vía, en el plazo máximo de 7 días laborables, las condiciones de aplazamiento o de fraccionamiento aplazado de la deuda que acepta o, en su defecto, las posibles alternativas que plantea en relación con la misma.
Aprovecho la ocasión para dispensarle mi saludo afectuoso, y desearle mucha salud en estos momentos tan delicados que nos ha tocado padecer.
Atentamente.
El arrendatario.«
Now the english version:
«OWNER´S NAME
Owner´s address
Date
Dear Sir,
By means of this writing, and by virtue of what is prescribed in article 8 of Royal Decree-Law 11/2020, of March 31, which adopts urgent complementary measures in the social and economic field to face COVID- 19; I inform you that I am currently in a situation of economic vulnerability, as defined by article 5 of said regulation, which I accredit by making the documentation you deem appropriate available to you.
To this end, please let me know if it is possible and if you would like to consider the temporary and extraordinary postponement of the rent payment.
Given the circumstances expressed, please inform me by this same means, within a maximum period of 7 working days, of the conditions of deferment or deferred fractionation of the debt that you accept or, failing that, the possible alternatives that it raises in relation to the same.
I take this opportunity to extend my affectionate greeting, and wish you good health in these delicate moments that we have suffered.
Best regards.
The tenant.«
2nd step.- Ask for that aid from Government or micro loan from bank.-
The owner will have seven working days to accept the conditions, but in case of not accepting the postponement or cancellation (because, for example, he could not afford it either financially), the vulnerable tenant will have access to the financing aid program regulated in the royal decree , such as direct aid or a microcredit from the ICO. Therefore, for the small landlord the moratorium is optional.
So we have 2 options, the first one is going to our bank and ask for that micro loans following the 1st step, or asking for that help directly from the government, in the case of properties in the Canary Islands, it should be through the Canary Islands government.
In case of not being able to meet the microcredit of the ICO, the Autonomous Communities will be the ones that determine the exact amount of these grants, within the limits established for this program.
Aid will be granted through direct award and in the “cases of economic and social vulnerability arising as a result of COVID-19”, which will be determined by the autonomous communities and the cities of Ceuta and Melilla. These assumptions will always include and, as a minimum, those defined in article 5 of RDL 11/2020. Here you can see more information about it.
The Autonomous Communities and the cities of Ceuta and Melilla must specify the term (not being able to extend in any case beyond September 30, 2020) and how to submit applications, by resolution or agreement, which will be publicized, to the as soon as possible, as stated in the statement sent by the former Ministry of Development.
They are aid compatible with any other rental aid that the tenant received, even if it were charged to the State Housing Plan 2018-2021, as long as the total aid does not exceed 100% of the corresponding rental amount. They are aids to address the vulnerability caused by covid-19.
In the event of having acceded to the transitory financing aid included in article 9 of Royal Decree-Law 11/2020, the aid may reach up to a maximum amount of 5,400 euros, with which the payment of the the habitual residence.
Request for help:
The aid must be requested by the lessee to the autonomous community of the Canary Islands, until a maximum of September 30, 2020.
The request must be accompanied, in any case, by a complete copy of the current lease, with the express inclusion of the means and form of payment to the lessor, and the proof of payment of the last three monthly payments, unless the contract had a shorter term, in which case the payment will be credited from the start of the contract. This documentation must be sufficient so that, where appropriate, the aid can be paid directly to the lessor on behalf of the lessee.
Anyway, the Canary Islands government is working on the aid that is going to be given to those tenants we are talking about. Sadly, by the moment, there is no way of requesting that aid, no form to fill and nothing to do, except waiting for news from the Canary Islands Living Place Institute.
You can follow this link and wait for news from the government:
https://www.gobiernodecanarias.org/vivienda/
Please, keep in touch, and ask our lawyers about your questions.
Carlos A. Gómez de Linares
Lawyer