Exceptional and temporary rent payment scheme

Exceptional and temporary rent payment scheme

 

Read in conjunction with the Q and As 

 

The   Council of Ministers of March 26 approved a Law Proposal that establishes a flexibility in the payment of rents during the period in which the exceptional measures to contain the coronavirus / Covid-19 pandemic are in force.

With this law proposal, which was delivered today 31st to the Assembly of the Republic, is intended to guarantee the minimum stability in the lives of people and companies, while ensuring better conditions so that, after the exception period, it is possible to overcome the difficulties for it generated.

All measures apply to rents due on April 1, 2020.

 

Residential leasing

The proposal foresees, for housing leasing, to ensure, for households that suffer a significant income drop in this period, flexibility in the payment of rents that ensures that any delays that may occur are not a default and that does not imply payment, the indemnity of 20% of the rent, provided for in the Civil Code, provided that these rents are paid within the periods provided for in the proposed law.

Authorize the Housing and Urban Rehabilitation Institute to grant interest-free loans for the payment of rent to these tenants or their landlords, when they have low income and the tenants do not use the loan and to offset the amount of monthly rent due and not pay.

Allow public entities with leased houses to, during this period, reduce or exempt from rent payments those tenants who prove to have had a drop in income, or even establish moratoriums on them.

 

Access to the scheme

To be able to access this regime, tenants need to prove that they have had a drop of more than 20% of the household’s income compared to the income of the previous month or the same period of the previous year, and that the payment of the rent is or becomes higher 35% of income.

In the case of landlords, they must prove to have had a drop of more than 20% of the household income, if it is caused by the non-payment of rents under this regime, whenever the remaining disposable income of the household falls, for this reason, below of the Social Support Index.

The landlord has the right to terminate the contract, for failure to pay past due rent, if the lessee does not make his payment, within 12 months from the end of that period, in monthly instalments of not less than one-twelfth of the total amount, paid along with each month’s income.

 

Non-residential lease

 

For non-residential leasing, the proposal provides for the suspension of rental payments, in the case of commercial establishments that have been forced to close, under the declaration of a state of emergency.

The payment of arrears may be deferred in the months in which the state of emergency prevails and in the first month thereafter, for the twelve months after the end of that period, in monthly instalments of not less than one-twelfth of the total amount, paid together with the rent in the month concerned.

 


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