On 22 December 2020, the Spanish Council of Ministers passed some important provisions for the real estate market. The first one (RDL 35/2020) included new measures to support non-residential and industrial leases in the context of the pandemic (you can access our newsletter on the matter in this link).
The second one was passed with the aim, among others, of reinforcing the temporary suspension of evictions for the benefit of some vulnerable groups. We are referring to Royal Decree-Law 37/2020 of 22 December on urgent measures to deal with situations of social and economic vulnerability regarding housing and transport ("RDL 37/2020"). RDL 37/2020 was published on 23 December 2020 on the Spanish Official Bulletin and entered into force immediately. It includes different kind of measures (regarding transport, supplies, consumers, etc). Notwithstanding, we focus below on those which directly affect the residential market.
1. WHAT ARE THE NEW MEASURES INCLUDED IN RDL 37/2020?
The main measures are:
- an extension (in time and coverage) of the evictions' suspension as already regulated by Royal Decree-Law 11/2020 of 31 March, about which we informed you at the time (you can access our newsletter in the following link); and
- the establishment of new suspension scenarios affecting only large holders.
2. HOW DOES NEW RDL 37/2020 MODIFY THE EVICTIONS' SUSPENSION ALREADY REGULATED UNDER RDL 11/2020?
RDL 37/2020 amends Article 1 of RDL 11/2020 in order to extend the evictions' suspension until the end of the second state of alarm as declared by Royal Decree 926/2020, of 25 October, and prorogued by Royal Decree 956/2020, of 3 November (the "Second Sate of Alarm").
Additionally, RDL 37/2020 clarifies that the tenant can request this extraordinary procedural incident for the suspension of the eviction in any verbal trials that deal with claims of rent or other amounts owed by the tenant or the expiration of the term of lease agreements signed under Spanish Law on Urban Leases 24/1994 and that seek to recover possession of the property. The tenant may request the suspension, whether or not a date has been set for the effective eviction.
In order to request the suspension, the tenant must prove to be in one of the situations of economic vulnerability mentioned in RDL 11/2020 (which do not vary and you can see in our newsletter on RDL 11/2020 accessible through this link). The court clerk (letrado de la administración de justicia) will send this documentation to the plaintiff who, within a maximum period of 10 days, may accredit before the court, by the same means, that he is also in the situation of vulnerability or at risk of being in such situation if the measure of suspension of the eviction is adopted.
Following the above, the court clerk will forward the file to social services requesting from these services a report assessing the vulnerability of the tenant and, where appropriate, of the landlord, and identifying the measures to be implemented. The social services must issue this report within 10 days.
The judge, taking into account all the documentation filed, including the social services' report, will pass judgement suspending the eviction if the tenant's vulnerable situation is deemed to have been proved and it is considered that the vulnerability of the landlord, where appropriate, should not prevail. If the vulnerability is not accredited by the tenant, or the vulnerability of the landlord should prevail, the judge will pass judgement ordering the continuation of the the proceedings. In any case, the judgment setting the suspension will expressly state that, once the state of alarm has ended, the calculation of the days referred to in Article 440.3 of the Spanish Law on Civil Procedure will be automatically resumed or a date will be set for the hearing and, if applicable, the effective eviction.
During the suspension, the relevant public bodies must implement the measures indicated in the social services' report or any others deemed appropriate to satisfy the housing needs of the person in situation of vulnerability. Once these measures have been applied, the relevant public body must immediately notify the court and, within three days, the court clerk will issue an order lifting suspension.
3. WHAT IS THE NEW SUSPENSION SCENARIO AFFECTING ONLY LARGE HOLDERS?
As mentioned, RDL 37/2020 sets out new scenarios for eviction suspensions which will only apply if the relevant residential unit is owned by a natural or legal person holding more than 10 residential units. For these purposes, RDL 37/2020 includes a new Article 1.bis in RDL 11/2020 which was subsequently slightly amended by the first final disposition to Royal Decree-Law 1/2021 of 19 January.
If the owner is a large holder under the above definition, the judge can suspend the eviction until the end of the Second State of Alarm in criminal proceedings involving eviction from residential units of persons living there without title and also in verbal trials dealing with any of the following claims:
- Those that seek to recover full possession of a rural or urban property, assigned in a precarious manner, by the owner, usufructuary or any other person with the right to possess said property.
- Those seeking summary protection of the possession or ownership of a thing or right by anyone who has been deprived of it or whose enjoyment of it has been disturbed.
- Those initiated by holders of in rem rights registered with the Land Registry, demanding the effectiveness of such rights against those who oppose them or disturb their exercise, without having a registered title that legitimates the opposition or disturbance.
The judge, before deciding on whether or not the eviction should be suspended, will carefully consider the case having into account the following circumstances, among others:
- The circumstances relating to whether the entry or stay in the property is motivated by a situation of extreme necessity. For the purpose of analysing the state of need, the social services' report shall be taken into account.
- The circumstances relating to the cooperation of the inhabitants of the property with the competent authorities in the search for alternative housing solutions.
To apply for eviction suspension in these scenarios, it is not enough for the person who lives in the property to prove that he or she is in one of the situations of economic vulnerability of RDL 11/2020, but it is also necessary for at least one inhabitant to be a dependent person, this being understood to mean people who for reasons derived from their age, illness or disability, and linked to the lack or loss of physical, mental, intellectual or sensory autonomy, require the attention of one or more other persons or significant assistance to carry out basic activities of daily living or, in the case of persons with intellectual disability or mental illness, other support for their personal autonomy. All these circumstances must be accredited to the court and the court clerk who will forward the file to social services so that they can issue a report within 15 days.
The judge, if the situation of the inhabitants has been duly accredited and all other circumstances have been assessed, will pass judgement suspending the eviction for the time remaining until the end of the Second State of Alarm. During the suspension, the relevant public bodies must implement the measures indicated in the social services' report or any others deemed appropriate. Once these measures have been applied, the relevant public body must immediately notify the court and, within three days, the court clerk will issue an order lifting the suspension.
On the other hand, if the vulnerability and dependence of the inhabitants are not considered duly proved, or some of the exceptional situations listed below occur, the judge will pass judgement ordering the continuation of the proceedings. The exceptional situations that determine the continuation of the proceedings are:
- When the entry or stay has taken place in a property owned by a natural person if that person has his main residence or accredited second residence in that property.
- When the entry or stay has taken place in a property owned by a natural person or legal entity that has assigned it by any valid legal title to a natural person who has his main residence or accredited second residence there.
- When the entry or stay in the property has taken place through intimidation or violence over people.
- When there are reasonable suspicions that the property is being used for the carrying out of illicit activities.
- When the entry or stay has taken place in public or private properties intended for social housing and the relevant property has already been assigned to an applicant.
- When the entry into the property has taken place after the coming into force of RDL 37/2020.
4. HAVE ANY AIDS BEEN PASSED FOR THE SUPPORT OF THOSE LANDLORDS AFFECTED BY THESE MEASURES?
Landlords affected by the suspension referred to in Article 1 of RDL 11/2020 (which affects both large holders and any other type of landlord) will have the right to request compensation when the relevant administration, within three months of the date on which the social services report is issued, has not taken the measures indicated in that report.
The compensation will be the average residential rental income in the area in which the property is located, determined from the relevant reference indexes or other objective references that are representative of the rental market, plus the current expenses of the property that the landlord can prove that he has assumed, for the period between the judgement providing for the suspension and the moment in which it is lifted by the court or the end of the Second State of Alarm. If this value is higher than the rent received by the landlord, the compensation will consist of the rent not received during the same period, plus current expenses.
This request for compensation may be made up to one month after the end of the Second State of Alarm.
Those affected by the suspension provided for in Article 1.bis of RDL 11/2020 (now introduced by RDL 37/2020, i.e. the new suspension scenario which refers only to large holders) will be entitled to the same compensation mentioned above but only if they can prove that the suspension of the eviction has caused them economic damage because the relevant property was in the market when the entry took place.
Within a maximum period of one month, the Government must pass by royal decree the necessary measures so that the Autonomous Communities can use the resources of the State Housing Plan 2018-2021 to meet all these compensations and also to set out the procedure for the presentation, processing and resolution of applications.
5. ARE PROCEEDINGS IN PLACE AFFECTED BY RDL 37/2020?
RDL 37/2020 affects eviction proceedings initiated after its entry into force, as well as proceedings in place, even when the suspension has already been agreed in accordance with RDL 11/2020.
However, it will not apply if the suspension agreed under RDL was lifted due to the vulnerable situation of the landlord.
In any event, compensations mentioned in the previous section will only apply to suspensions agreed after the entry into force of RDL 37/2020.
