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Can I suspend the payment of the rental of the business premises?

Yesterday, 22nd of April, the new measure approved by the Government entered into force, granting deferment of rent payments to tenants of premises and industry until the State of Alarm lasts.

Francisco Lorenzo Martínez

Date 23/04/2020

Yesterday, 22nd of April, the new measure approved by the Government entered into force, granting deferment of rent payments to tenants of premises and industry until the State of Alarm lasts.

At Balms Abogados our clients ask us for advice and to know with guarantees, if they have the right to postpone the payment of their rentals. The rule approved yesterday establishes a series of requirements, for this reason it is important to know that you must comply to request from today the deferment of the payment of your rent.

Balms Abogados recommends checking that legal requirements are met before requesting deferment of rent payment. Below we explain it in a summarised way by following these simple steps:

STEP 1.- Is my company an SME?

The rule grants this right to the self-employed and SMEs.

SMEs are all those companies that have less than 250 workers and have an annual turnover of not more than 50 million euros or when their annual balance sheet does not exceed 10 million euros.

Where is this company data checked? The company ledgers for this exercise can be used. In case of doubt we can also use the online tool of the Ministry of Industry at the following link that will confirm or not the status of SMEs by following a questionnaire: https://soypyme.ipyme.org/Home

STEP 2.- If my company is an SME, what requirements do I also have to meet in order to be able to defer payment of my rental income?

The company must meet the following requirements together:

A)    That the activity has been expressly suspended by Royal Decree 463/2020, of the 14th of March, State of Alarm, see the list of activities in the Annex to the regulation.

B)     That the following financial limits are not exceeded in this exercise:

b.1) That the total assets of the company do not exceed 4 million euros. The asset is all the assets of the company and that have an assigned value on the books of the company.

b.2) That the net amount of its annual turnover does not exceed 8 million euros. The result of the company's income discounting taxes and bonuses.

b.3) That the average number of workers employed in the year does not exceed 50. The workers employed by the company during this year.

C) If the activity has not been expressly suspended by Royal Decree 463/2020, of the 14th of March, the lessee must prove the reduction of your billing in the calendar month prior to which the postponement is requested by at least 75 percent, in relation to the average monthly billing of the quarter to which said month refers to the previous year.

STEP 3.- If you meet the requirements, what should you do?

The tenants have until the 22nd of May to notify the landlord that they are temporarily deferring the payment of the rent of their business premises, taking advantage of this legal moratorium, and they must also prove and with the accounting documentation before their landlord that they comply with each and every one of the previous requirements.

The same law warns that in the case of not being able to justify the fulfilment of the requirements or have incorrectly deferred the rent, the lessee will be responsible for all the damages and losses caused to the lessor.

To make sure of your right and to do it with absolute guarantee, you can contact our team of lawyers specialised in Balms Abogados, who will advise you for your greater tranquillity when exercising your rights before the lessor.

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