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Can I stop paying rent during the state of alert?

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Andersen Tax & Legal explains that there are few legal examples of what caused the coronavirus pandemic

The declaration of the state of alert has not only led to the confinement of citizens to their homes, but also to the closure of many commercial premises and the economic standstill of these, as many of them are not among the activities that can remain open, as specified in Royal Decree 63/2020 of 14th March, which declared the state of alert.

Faced with this situation, and the imminent payment of rent for these properties, many people are wondering whether they could get a reduction from the landlord or stop paying rent until the state of alert is lifted in the country.

The experts at Andersen Tax & Legal explain that, at present, there are few legal examples comparable to what caused the coronavirus pandemic. However, there have been rulings related to influenza A that could serve as a reference. In addition, two legal figures also stand out that will be essential in this period for resolving contractual disputes: on the one hand, there is force majeure regulated in article 1105 of the Civil Code and, on the other, the rebus sic stantibus clause, which in exceptional situations could allow the modification of the obligations of a contract.

Can the tenant of a business premises not pay the rent for the declaration of the alarm status?

To answer this question, we must differentiate between two factual cases: that the activity carried out on the premises is one of those that has not been suspended by the royal decree; or that the business is among those that have been interrupted. Although a similar solution is reached in both cases, Andersen Tax & Legal explains that there are nuances that must be considered depending on the case.

  • Activities that have not been suspended by the royal decree
  • Activities that have been suspended by RD 463/2020
  • Force majeure
  • Rebus sic stantibus clause

The firm also points out that, given the constant and different measures being taken by the Executive, the responses may be modified.

You can read the full article in Expansión.

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