Are you an owner, landlord, or tenant? Then this article interests you, and today we tell you how the coronavirus affects rental housing and we answer your doubts and questions.
In addition, we know that we are not in a normal situation so we put all our experience in the rental market and attention at your disposal to solve any doubt or question that surely there are many.
It does not matter if you are renting or have a property in your name, surely you are concerned about the situation and, more importantly, what will happen in the future?
Read on and we’ll try to answer all of your questions about rent forgiveness for tenants or how it affects property owners.
How Does The Coronavirus Affects Rental Housing?
The situation of the coronavirus and confinement at home has caught us all by surprise, starting with the government, which was not expecting this problem, which represents the economic and financial paralysis of the country.
This has caused many people to not be able to leave home to go to work, except for those workers who carry out basic activities.
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Among them are health workers, transporters or people linked to food sectors, State Security Forces and Bodies or the media.
Affected Landlords, Landlords, And Tenants Alike
In other words, not being able to go to work means an economic loss of a month’s salary, which complicates the situation for many families who live from day to day.
Not to mention, the possibility of many workers being involved in an ERTE which increases the vulnerability of the tenants or owners. And it is that not only the workers are affected, also the owners.
Many small owners are also workers who are affected by how this situation is aggravated by losing their two sources of income, their wages and the payment of their tenant’s rent.
The opposite can also happen, and it is that many owners depend solely and exclusively on the economic income that the rental of their properties entails.
And now they see how they have problems to know if the tenants are going to be able to pay the following month or not.
Government Financial Aid And Measures For Housing Rental
For this reason, the government approved a package of aid and economic measures for rent due to the coronavirus.
These measures are aimed at supporting vulnerable groups, companies and the self-employed and are a kind of “rescue plan” to try to alleviate the loss of income and financial liquidity.
These are actions and proposals for relief to alleviate the economic stress of households and that people have liquidity to pay rents.
The most important ones that affect both tenants and owners are the following:
- Rent increases are prohibited until October and evictions are suspended:
Evictions are suspended for six months from the entry into force of the state of alarm.
In addition, the automatic renewal of rental contracts that expire in the three months following the entry into force of this rule is implemented.
This extension will be six months and the terms and conditions of the current contract will be maintained. All this is possible without being able to apply any type of penalty or interest.
- Rent Moratorium:
The moratorium on the payment of rent will be extended as long as the state of alarm lasts or while the situation of vulnerability persists, with a maximum of four months.
Once this situation is overcome, the tenant will return the unpaid fees over a period of no more than three years, without any type of penalty or interest being applied.
In the event that there is no agreement, the tenant will have access to a program of temporary financing aid at zero cost with the State’s guarantee.
This credit will have no interest. In addition, a new direct rental assistance program is established on habitual residence for people who have more permanent problems with paying rent. These may be added to those mentioned in the previous cases.
- The Mortgage Moratorium Is Extended:
According to Royal Decree-Law 8/2020, of March 17, the debt moratorium for the habitual home mortgage is facilitated and the payments of the suspended installments must be postponed for the duration of the suspension.
In addition, the self-employed are added among the groups that can benefit from this moratorium.
- Support In Basic Supplies Cuts:
In order to ease the economic stress of families, suspension measures are extended for families that cannot make payment of credits related to consumption. This is in addition to the mortgage payment and will last about 3 months.
Banking entities will not be able to charge the fees and credits derived from these.
In addition, it adds to the aid for basic supplies such as electricity, gas and water. Many of which, totally or partially, are included in the rent of many tenants.
- Support Measures For People:
The government approved the electricity social bond and other proposals such as moratoriums for the self-employed, SMEs and aid for domestic employees.
How Can You Request Coronavirus Rental Assistance?
Ok, all of the above is great on paper, but how do I act if I am a tenant. The first thing is to know if the tenant is a vulnerable person who has access to aid.
Among The People And Groups That Can Request The Aid Are The Following:
- Unemployed, workers in a situation of ERTE or Temporary Employment Regulation File or who have had their hours and working hours reduced for care reasons.
- Entrepreneurs, SMEs and freelancers who have seen a loss of up to 75% of their income reduced.
- Vulnerable people. These include aid only for households that meet the above points and that do not exceed a total income per member of the family unit, from the IPREM or Public Indicator of Multiple Effects Monthly Income, which is about 1,645 euros per month.
Tenants, How Do You Show That You Are Vulnerable?
Taking into account the previous cases, the tenants who are in this situation must deliver and demonstrate that they are vulnerable with the presentation of the following documents.
- Cessation of activity by ERTE.
- Certificate of unemployment situation in which the monthly amount of the subsidy appears.
- Number of people in charge of the family unit and who live in it, registration certificate of the people residing in the property and family book.
- Cessation of activity through a certificate from the AEAT or the corresponding Autonomous Community. Failing that, the declaration of termination declared by the interested party also applies.
- Finally, and in the event that some or all of the documents can not be attached, a signed and responsible statement may be valid with the reasons that justify the payment of the rent.
These moratoriums can be requested until May 2, 2020 and must be completed with the corresponding documentation.
In summary, for tenants or owners, maximum extensions of 6 months may be applied that end as of April 2, 2020 and up to 3 months later. All this is possible if requested by the tenant and accepted by the owner or landlord.
As of the moment in which everything returns to its normal course and the eviction procedures begin again, the measures to be taken and the consideration of the suspension period must be communicated to the social services.
All this subject to the presentation and verification of the state of vulnerability and the impossibility of finding another home, which will cause the suspension of eviction retroactively and for a maximum of 6 months.
What To Do In Case Of Doubt Or Query?
We know that it is an exceptional situation and that you will have many doubts, therefore, our advice is that if you have any problem or question, do not hesitate to contact us directly.
It does not matter if you need to ask for help, you do not know how to file a procedure or you have doubts about whether you meet the requirements to show that you and your family are in a vulnerable situation, do not hesitate and contact us!The philosophy of Renovalia Real Estate to promote ethical behavior and professionalism of all its partners and customers is in our DNA.
And it is that above all we are people who are concerned about this situation and we understand the extraordinarily of the moment and the need of many families who need help either in the form of information, consultation or resolution of doubts.