The coalition government PSOE/UP has approved a series of measures to “rescue” some 500,000 tenants affected by economic impact amid the coronavirus. Among the measures are tenants’ access to government microcredit, extending six-month contracts that expire during quarantine, and preventing evictions before the end of the year.
The measures were approved in the Council of Ministers on Tuesday, March 31:
- Suspension of evictions for residents who have no alternative accommodation. These measures will be in place for up to six months from the end of the quarantine.
- The government will guarantee microcredit loans with no interest or fees for tenants who are vulnerable.These loans can be repaid within six years. If you are unable to repay the loan within this period, it can be extended for a further four years.
- This microcredit program will be open to anyone who cannot afford to pay rent. Due to job loss, tenants who are covered by ERTE or whose working hours have been reduced. The measure also applies to the self-employed who suffer a significant drop in their income.
- The term of a residential lease will be extended in caseswhen the lease expires during a state of emergency. A six-month emergency extension will be approved. This means that the landlord will not be able to raise the rent for the next six months.
- If the landlord is a large firm or investment fund-more than 10 properties, whether an individual or a company, the affected tenant can request a 50% debt reduction. The tenant will be required to pay the remaining half of the debt in apportioned installments over the next three years.
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It remains to be seen whether these tenants will have a four-month rent moratorium. In any case, tenants whose owners are large landlords may also qualify for government support.
It remains to be seen whether these tenants will have a four-month rent moratorium.
How will these decisions affect rents?”
There is no doubt that once the situation normalizes, the criteria for access to housing for those groups currently being assisted will become much stricter. Which will make them much more insecure in the future. Most likely small landlords who have their own properties will receive their rent at the full amount as before.
Small landlords are likely to receive their rent at the same rate as before.
In case families are unable to pay the microcredit, they will be provided with assistance. This can be up to a maximum of €900 per month and up to 100% of the principal and interest on the loan signed with the ICO. And 200 euros a month to cover living expenses, utilities and comunidade.
The ministry estimates the value of interest and guarantees on ICO loans at around €700 million. 300m to help those affected by the structural crisis. And 400 million as part of the 2018-2021 housing plan.
Ministry.