On March 11, 2020, the World Health Organization declared the public health emergency situation caused by COVID-19 an international pandemic. The rapid spread, both nationally and internationally, has led to the need to react quickly and to adopt urgent and forceful measures in order to cushion the impact of this unprecedented crisis.
The Government of Spain has approved a series of urgent measures reflected in Royal Decrees - Laws 8/2020 and 11/2020 in the social and economic sphere to deal with COVID-19.
Who is affected?
Regarding the approved measures, there is a moratorium on the payment of installments of both mortgage loans and personal loans for a period of three months.The measures are intended for those who are in a situation of economic vulnerability as guarantors, debtors and guarantors.
What is the non-mortgage loan moratorium?
It aims to alleviate the economic burden for citizens who cannot temporarily meet their financial obligations due to the COVID-19 crisis
In this Royal decree-law, a natural person who is in a situation of economic vulnerability indicated in article 16 is protected, may request the temporary suspension of the contractual obligations derived from all his loans without mortgage guarantee.
What requirements must meet who is going to request the moratorium?
In order to request said moratorium, the potential beneficiary must be in a situation of economic vulnerability as a result of the health emergency caused by COVID-19 for the purposes of this Royal Decree-Law and Royal Decree-Law 8/2020, of March 17, where they are defined by compliance with the following conditions :
- That the potential beneficiary becomes unemployed or, in the case of being an entrepreneur or professional, suffers a substantial loss of income or a substantial drop in turnover of at least 40%.
b) That the total income of the members of the family unit does not exceed, in the month prior to the request for the moratorium:
i. In general, the limit of three times the monthly Public Indicator of Multiple Effects Income (IPREM).
ii. The limit of 4 times the IPREM, when any of the members of the family unit has a declared disability greater than 33 percent, a situation of dependency or illness that permanently incapacitates him or her to carry out a work activity.
iii. The limit of 5 times the IPREM, when the debtor is a person with cerebral palsy, mental illness, or intellectual disability, with a recognized degree of disability equal to or greater than 33 percent, or person with physical or sensory disability, with a degree of recognized disability equal to or greater than 65 percent, as well as in cases of serious illness that accreditably disables the person or their caregiver to carry out a work activity.
The above limits will be increased by 0.1 times the IPREM for each dependent child in the family unit (0.15 times the IPREM in the case of a single-parent family unit) or for each person over 65 who is a member of the family unit.
c) That the total of the mortgage payments of the real estate referred to in article 19 , plus the expenses and basic supplies, is greater than or equal to 35 percent of the net income received by all the members of the unit. family.
d) That, as a consequence of the health emergency, the family unit has suffered a significant alteration of its economic circumstances in terms of the effort to access housing.To this end, it will be understood that there has been a significant alteration of the economic circumstances when the effort that represents the total mortgage burden, understood as the sum of the mortgage payments of the real estate referred to in article 19 on family income, has been multiplied by at least 1.3.
What is the family unit?
For the purposes of this royal decree-law, a family unit is understood to be the one composed of the debtor, his spouse not legally separated or registered domestic partner and the children , regardless of their age, who reside in the home , including those related by a relationship of guardianship , care or foster care and their spouse not legally separated or registered domestic partner, who reside in the home.
What are “basic supplies and expenses?
Only those provided in the family unit's habitual residence will be considered "basic expenses and supplies". For these purposes, "basic expenses and supplies" shall be understood as the amount of the cost of the supplies of electricity, gas, diesel for heating, running water, fixed and mobile telecommunication services and the contributions to the community of owners.
What documentation should be provided? Article 20.
It is an automatic measure and will take effect from the date of your request. The concurrence of the circumstances referred to in article 16 will be accredited by the potential beneficiary by presenting the following documents:
a) In the event of a legal unemployment situation , by means of a certificate issued by the entity managing the benefits, which includes the monthly amount received as unemployment benefits or subsidies.
b) In case of cessation of activity of self-employed workers , by means of a certificate issued by the State Tax Administration Agency or the competent body of the Autonomous Community, where appropriate, on the basis of the declaration of declared cessation of activity by the interested party.
c) Number of people living in the house :
i. Family book or domestic partner document.
ii. Registration certificate relative to the persons registered in the home, with reference to the time of presentation of the supporting documents and to the previous six months.
iii. Declaration of disability, dependency or permanent incapacity to carry out a work activity.
d) Ownership of the goods:
i. Simple note from the property registry index service for all members of the family unit.
ii. Deeds of sale of the habitual residence, of the house for rent, or of the property affected by the economic activity and of the granting of the loan or loans with mortgage guarantee in the event that a moratorium on the mortgage debt is requested.
e) In the event that a moratorium on the mortgage debt is requested for the mortgage loan for a rental dwelling in accordance with letter c) of article 19, the corresponding lease must be provided.
f) Responsible declaration of the debtor or debtors regarding compliance with the requirements to be considered without sufficient financial resources according to this royal decree-law.
If the applicant for the moratorium could not provide any of the documents required in letters a) to e) of the previous section, he may replace it by means of a responsible statement that includes the express justification of the reasons , related to the consequences of the COVID-crisis. 19, which prevent such a contribution . After the end of the state of alarm and its extensions, you will have a period of one month to provide the documents that you have not provided.
When and how can you apply?
From April 2, 2020 (date of entry into force of the measure) and until one month after the end of the validity of the state of alarm established in Royal Decree 463/2020, of March 14.
The request, accompanied by the required documentation, can be submitted to the creditor through any means that leaves proof of receipt.