Antonio Flores’ Blog

This week has seen various legal updates regarding COVID-19, all of which point to a return to normality.

Here we show the most important ones:

Litigation

1. Lifting of the suspension of procedural terms and deadlines, with effect from 4 June 2020. Terms and deadlines for litigation writs will be recalculated by granting the full period granted by law.
2. August will only be a holiday period for litigation activity between the 1 and 10^th of the month, the rest being normal working days. However, it is recommended that hearings are limited as much as possible and that writs and other legal submissions for the period between 11-31^st of August 2020 are notified preferably before the 15^th of June, with a view we think of allowing legal professional arrange their holidays.
3. Lifting of the suspension of the statute of limitations and expiration periods, with effect from 4 June 2020.

Administrative

1. Lifting of the suspension of administrative terms and deadlines, with effect from 1 June 2020. This implies procedures such as with the municipality, traffic fines, social security etc.
2. The suspension of administrative deadlines is not applicable to tax proceedings, and applicable at national, regional or local level.

Immigration and travelling:

1. By reference to the Ministry Order approved on the 20^th of May Non-EU residents of Spain whose residency cards have expired in the interval between 3 months prior to the commencement of the state of alarm”, or lockdown (15^th of March 2020), and the first day after the state of alarm is lifted (est. 7^th of June 2020 or, if it gets extended for a last time, the 21^st of June), will enjoy an automatic extension to renew their cards of up to 6 months from the first day after the “State of Alarm” is terminated. Those residents who are abroad whilst the country is in a situation of state of Alarm will be able to enter Spanish territory within the same 6-month period (December 2020), showing the expired card and a valid airline ticket (or equivalent if using a different means of transport).
2. With regards to EU residents, they do not face this problem as it is largely irrelevant if an EU person lives in Spain permanently with, or without a residency card.
3. Until further notice, travelers into Spain will have to observe a minimum 14-day quarantine period, at home. There is to our knowledge no system to monitor the observance of this obligation.

Antonio Flores Uncategorized coronavirus, Covid-19

The COVID-19 or “Corona Virus” has brought about new situations of potential legal conflict that we could have not even imagined before. With shops closing temporarily, airlines and hotels coming to a complete standstill and the curfew affecting the mobility of people, the fulfilment of thousands of contracts is now in question by reasons well beyond the particular circumstances of the intervening parties.

So can the parties pull out, suspend, adapt or terminate contracts of continuous performance? Royal Decree 8/2020 of the 17^th of March 25 has not dealt with the consequences of the Corona outbreak, save for a moratorium on mortgage loans for those classed as vulnerable.

This said, let’s see what the various situations any renter or property owner can find themselves in.

Rental Agreements

The Government has not addressed these contracts (as of 25/3/2019) and therefore, principles of civil law must be applied. There are two:

• Fuerza Mayor or Force Majeure. It’s French for “superior force”. The long and short of it is that if some expected event of such caliber takes place that prevents the parties from performing an obligation, the performance of that obligation is excused.Articles 1105, 1182, 1184 and 1258 of the Spanish Civil Code state that “Acts of God and Force Majeure liberate debtors from fulfilling their obligations due to superior force”.

• Rebus sic stantibus et aliquid novo non emergentibus is the legal doctrine allowing for a contract or a treaty to become inapplicable because of a fundamental change of circumstances. This is similar to force majeure but touches on fairly distinct considerations:
  1. There is incident of such magnitude that alters the bases of the contract
  2. Such incident frustrates the “commercial sense” of the contract and
  3. Breaks the balance of a contract and produces damage to one party due to supervening circumstances that could have not been contemplated in the contract or are alien to normal contractual risk analysis.

The consequence of applying these principles would be that contract gets “frozen” in time, suspended of its effects for the parties.

The downside to any impending legal conflict is the time and expense of a Court procedure, unless parties to a contract can reach individual agreements in the wake of what is an unprecedented situation.

Mortgage Loans

The moratorium offered by the Government will only apply to borrowers that are deemed to be in a situation of vulnerability, and this will happen only if (all) of the following occur:

• The property must be the main dwelling.
• To be unemployed or if self-employed, to have lost at least 40% of the sales.
• The combined income of the family should not exceed €1,600 (3 times the IPREM).
• And only if the loan repayment is over 35% of the net income.

The documents and procedures the state will require are family book, tax certificate confirming the reduction of activity, property deeds and once this has been reviewed by the bank, it needs to go to be ratified before a Notary Public.

For mortgage loans not contemplated by the Royal Decree 8/2020 of the 17^th of March 25, the above noted civil law principles on rental contracts could be applied here too.

Are you in any of these situations? Contact us, we can help.

admin Uncategorized corona virus, coronavirus, Covid-19, Force Majeure, Fuerza Mayor, Mortgages, Rebus sic stantibus, spanish rentals