Law and regulation of rental agreements in Spain during Covid-19

Updated on 30.03.2020.

Yes, provided that they are within the activities ordered to close by the Government (which presently are all retail activities with minor exceptions)

The tenants that carry out activities, which are not ordered by the Government to close, are entitled to close the premises (unless they are bound for a contractual keep open provision) but they are not generally entitled to ask for a rent reduction.

See our response in 1. above

A legally mandatory deposit with an amount equal to 2 monthly instalments of the initial rent. A bank guarantee or an additional cash deposit (being the bank guarantee more usual).

In the case of the activities ordered to close, the measures imposed by the emergency regulations may be considered as an extraordinary event, rendering the key obligation for landlords (i.e. to deliver and maintain tenants in peaceful possession of the property) as impossible to comply with.  Case-law precedents tend to entitle a party under a bilateral contract (e.g. lease agreements) to suspend the fulfilment of the obligations should a counterparty completely failed to fulfil the corresponding obligation. Based on the afore, we understand that tenants under lease agreements negatively affected by the Emergency Regulations as explained above may be entitled to suspend payment of the rent due to the fact that they are no longer in the peaceful possession of the leased property. Only in cases where the abovementioned situation is persistent in time, the tenant shall be entitled to terminate the lease agreement.

In the case of the tenants which have not been ordered to close, we do not see that the current situation entitles those tenants to claim a reduction or suspension of their obligations under the lease agreements. This assessment may of course vary if the situation persists in time or new Government measures are adopted.