Pasar al contenido principal
Inicio
  • Valores
  • Ética y buen gobierno
  • Expertos
  • Áreas / sectores
    • Administrativo y sectores regulados
      Agroalimentario
      Arbitraje
      Arte y Patrimonio Cultural
      Competencia
      Contratación comercial
      Economía circular
      Energía
      Financiación de proyectos
      Financiero y Bancario
      Fiscal
      Fusiones y adquisiciones
      Infraestucturas
      Inmobiliario
      Juego
      Laboral
      Litigación civil derivada de conductas anticompetitivas
      Mercado de Capitales
      Procesal Civil
      Procesal Penal
      Reestructuraciones e insolvencias
      Regulación financiera e inversiones alternativas
      Salud
      Societario y Gobierno Corporativo
      Tecnologías de la Información
      Urbanismo y medioambiente
  • Internacional
  • Talento
  • Actualidad
    • Noticias
    • Eventos
    • Newsletter
    • Sala de Prensa
  • Blogs
    • Blog Competencia y Agroalimentario
    • Blog Ramón y Cajal Digital
  • Contactar
  • linkedin
  • twitter
  • search
  • Aviso Legal
  • Política de Cookies
  • Política de Privacidad
  • Canal de Denuncias
  • Política de seguridad de la información
English
#SomosRyC
Royal Decree- Law 11/2020, of 31 March 2020 adopting urgent measures to deal with COVID-19
07 de Abril de 2020

The following is a summary of the main decisions taken by the Council of Ministers and contained in the Royal Decree-Law 11/2020, of 31 March, adopting additional urgent measures in the social and economic areas to deal with COVID-19.

Measures regarding litigation and bankruptcy matters 

Measures taken by Royal Decree-Law 11/2020, which affect procedural and bankruptcy matters as a result of the effects caused by the health crisis of the "COVID-19" which follow other measures, already in force, in the previous Royal Decree-Law 8/2020, of 17 March, on extraordinary urgent measures to deal with the economic and social impact of the COVID 19, are the following:

1. Home eviction proceedings

Measures adopted by the aforementioned Royal Decree-Law 11/2020, regarding evictions, are the following:

  1. Article 1.  Suspension of the eviction proceedings of vulnerable homes without alternative housing.

Fact: it will be carried out once the procedural deadlines (agreed by Royal Decree-Law 463/2020 of 14 March, declaring the state of alarm for the management of the health crisis situation caused by the COVID-19) have been lifted in the processing of eviction procedures derived from housing rental contracts, subject to Law 29/1994 of 24 November on Urban Rentals.

Circumstance: the tenant (natural person) must prove to the Court that they are in a situation of social or economic vulnerability as a result of COVID-19, which prevents them from finding alternative housing for themselves or for the people living in the rented property.

Vulnerability situation: proof must be provided that you are in one of the circumstances described in Article 5 of Royal Decree-Law 11/2020 by means of the documentation specified in Article 6 of Royal Decree-Law 11/2020.

Consequence: suspension of the eviction proceedings. Once it is requested by the tenant, after the review of the fulfilment of requirements by the Court Clerk, it will be agreed for the strictly necessary time, and the documentation will be sent to the competent social services for their consideration.

Landlord: if the landlord proves that he is also in a situation of social or economic vulnerability, he must present a written document supporting this circumstance (arts. 5 and 6 Royal Decree Law 11/2020), which will be sent by the Court Clerk to the competent social services for their consideration within the agreed period of suspension.

Suspension period: the suspension period will last a maximum of 6 months, from the entry into force of Royal Decree Law 11/2020.

  1. Article 11. Replacement of the assistance programme to persons in an eviction situation of their habitual residence by the new assistance programme to victims of gender violence, persons subject to eviction from their habitual residence, homeless persons and other particularly vulnerable persons regulated in the following article.

Purpose: to provide an immediate housing solution to victims of gender violence, persons subject to eviction from their habitual residence, the homeless and other particularly vulnerable persons.

  1. First Transitory Provision. Transitional regime applicable to the assistance programme to persons in an eviction situation of their housing.

Purpose: The benefits recognised under the programme of aid for persons in an eviction situation of their habitual residence, maintains its effects for the total period and the total amount for which it was recognised.

2. Bankruptcy

In the bankruptcy area, with respect to the provision of Article 43 of Royal Decree Law 11/2020, nothing else is added, which implies the maintenance of the provisions therein regarding the obligation to apply for bankruptcy for the debtor who is in a situation of insolvency, until two months have elapsed since the state of alert has been lifted.

A Fourth Transitory Provision is introduced into this Royal Decree Law 11/2020, which grants objective competence to the Labour Courts for the processing of the measures provided for in Articles 22 and 23 of Royal Decree Law 8/2020 (suspension of contracts and reduction of working hours due to force majeure, as well as economic, technical, organisational and production reasons). The Commercial Courts are thus deprived of the competence they had hitherto held in accordance with Article 86ter 1.2 of the Organic Law of the Judiciary and Article 64 of Law 22/2003 of 9 July on Bankruptcy.

The files that were processed or were being processed at the time of the entry into force of Royal Decree Law 11/2020 will still be valid.

3. Procedural facilitation

The Nineteenth Additional Provision promotes procedural facilitation once the state of alarm is lifted, in the social, contentious-administrative and commercial courts.  Pending the publication of this Action Plan, everything points to the fact that it could refer to reinforcement measures in light of a significant increase in the cases in these jurisdictions. This is expressed in the following terms:

Nineteenth additional provision. Procedural facilitation.

Once the declaration of the state of alarm has been left and, in consequence, the granted extensions, if applicable, the Government, at the proposal of the Ministry of Justice, will approve as soon as possible and in any case within a maximum period of 15 days, an Action Plan to speed up judicial activity in the social and contentious-administrative jurisdictional orders as well as in the area of the commercial courts with the aim of contributing to the rapid economic recovery objective after overcoming the crisis.

Measures for the protection of consumers and users applicable to certain contracts which cannot be performed due to COVID-19

Article 36 of Royal Decree Law 11/2020 establishes the following measures for the protection of consumers and users, applicable to certain contracts whose execution is impossible as a result of the state of alarm and the measures adopted to contain the pandemic:

1. Sales contracts or single tract service delivery: in these cases, consumers may exercise the right to terminate the contract for a period of 14 days, when it’s  not possible to obtain from the proposal(s) for revision offered by each of the parties (on the basis of good faith), a solution which restores the reciprocity of interests of the contract. Proposals for revision may include, inter alia, the offer of bonds or substitute vouchers to the reimbursement. It will be understood that no proposal for revision can be obtained, if 60 days have elapsed since the impossible performance of the contract without an agreement by the parties.

If the contract performance seems impossible, the entrepreneur is obliged to return the sums paid by the consumer (except for expenses incurred duly itemised and provided to the consumer) in the same form in which payment was made within a maximum of 14 days, unless the consumer expressly accepts different conditions.

2. Consecutive nature delivery services: in these cases, consumers may exercise the right to terminate the contract on the same terms as those for single-tract services. However, the company may offer options to recover the service, only if the consumer is unable to accept or does not accept such recovery (the amounts already paid will be refunded in part, corresponding to the period of the service not provided for that reason). Or, with the consumer's acceptance, reduce the amount resulting from future fees for the provision of the service. Likewise, the payment of new fees or monthly payments will be paralysed until the service can be provided again normally; however, the contract will not be terminated (except by the parties’ agreement).

3. Combined travel contracts cancelled by virtue of COVID-19: in these cases (including those cancelled due to measures to contain the pandemic taken by the authorities at the destination), the consumer may choose to request a refund or make use of the voucher for an amount equal to the refund, which will be provided by the organizer or, where appropriate, the retailer. The voucher may be used within one year from the end of the state of alarm. If it is not used within that period, the consumer may exercise the right to a full refund of any payment made. The offer of a temporary replacement voucher must have sufficient financial backing to guarantee its execution.

However, the organizer or, where appropriate, the retailer must reimburse consumers and users, if the latter request termination of the contract in accordance with Article 160. 2 of the General Law for the Defence of Consumers and Users and other complementary laws (this means, before the start of the journey, when unavoidable and extraordinary circumstances occur in the place of destination or in the vicinity that significantly affect the execution of the journey or the transport of passengers to the place of destination). Only if that the services providers included in the package travel contract, have proceeded to the total refund of the amount corresponding to their services. If only some of the services providers of the combined trip made the return to the organizer or, if appropriate, the retailer, or the amount returned by each of them was partial, the consumer or user will be entitled to a partial refund corresponding to the refunds made, being deducted from the amount of the voucher delivered by the resolution of the contract.

The maximum period for making the above-mentioned refunds is 60 days from the date of termination of the contract or from the date on which the services providers made the refund.

Measures in commercial and financial matters

Royal Decree Law 11/2020 contains new rules in financial matters and amends Articles 40 and 41 of Royal Decree Law 8/2020 and some special rules for the financial sector:

1. Recovery of pension plans (Additional Provision Twenty): Given the health crisis caused by the COVID-19, the Royal Decree contains the possibility of recovering pension plans in the event of unemployment or cessation of activity as a result of the crisis.

Thus, for the next six months since the Royal Decree 463/2020, for the management of the health crisis situation caused by the COVID-19, has come into effect that the participants in the pension plans may, exceptionally, make their consolidated rights effective only in certain cases indicated in the Additional Provision. For example, and among others, being in legal situation of unemployment as a result of a temporary employment file derived from the health crisis situation; or being the owner of establishments whose opening to the public has been suspended as a result of the provisions of Royal Decree 463/2020.

The amount of the available consolidated rights may not exceed, for example, and among others, the salaries that are not received during the temporary employment regulation file.

In any case, the reimbursement of those consolidated rights will be made at the request of the participant, subject to the tax regime established for pension plan profits, and must be made within a maximum of seven working days from the date the participant files the corresponding supporting documentation.

These measures will also be applicable to insured parties of insured pension plans, company pension plans and mutual social welfare societies.

2. Amendment of Articles 40 and 41 of Royal Decree Law 8/2020 (First Final Provision, paragraphs 13 and 14)

Article 40, on extraordinary measures applicable to legal entities governed by private law, is amended in the following areas

a. General meeting. Holding: even if it is not provided in the articles of association, it is permitted to hold meetings or assemblies of associates by video or multiple telephone conference, if all members entitled to attend, or those representing them, have the necessary means that the secretary of the body recognizes their identity and that this is expressed in the minutes that will be sent immediately to the attendants by e-mail.

b. Internal bodies: The possibility of holding the meetings of the governing and management bodies both by videoconference or multiple telephone conference is envisaged with the same formalities as those explained above.

c. Formulation of annual report, management reports and similar documents that are compulsory under corporate law, the 3-month period from the end of the financial year for the formulation of annual accounts is suspended during the state of alarm. This provision applies to the annual reports, ordinary or abbreviated, individual or consolidated. Likewise, it is recognized that the formulation of the accounts by the governing body or administration of a legal entity during the state of alarm will be valid, allowing their accounting verification to be carried out within the legally established period or making use of the extension provided for in Royal Decree Law 8/2020, that is, two months from the end of the state of alarm.

d. Profit distribution proposal: A new section is included (6 Bis) which differentiates  between (i) the commercial companies that, having formulated their annual reports, call the Ordinary General Meeting after April 1st 2020. These entities may replace the profit distribution proposal contained in the report with another proposal. To do so, the administrative body must justify, based on the situation created by COVID-19, the replacement of the proposal and accompany it with a letter from the accounts auditor stating that he would not have modified his audit opinion if he had known of the new proposal at the time of its signature; (ii) in the case of commercial companies whose ordinary general meeting has already been called, the administrative body is allowed to remove the profit distribution proposal from the agenda for the purpose of submitting a new proposal for approval by the general meeting which must be held within the legal deadline for holding the ordinary general meeting, with the administrative body being required to publish this decision prior to the holding of the general meeting. In any case, the requirements for justification and writing by the auditor set out above must be complied.

In addition, a new paragraph 3 is included in article 41, which requires that listed companies that apply the measures provided for in article 40.6 of Royal Decree Law 8/2020, shall make public, as soon as it is approved, the new proposal, its justification by the administrative body and the auditor's statement, as complementary information on their website and as other relevant information or, as privileged information on the website of the CNMV.

3. Suspension of the regime for the liberalization of certain foreign direct investments in Spain (Third Final Provision and Second Transitional Provision): Two new features are introduced, the first one has a material content and modifies section one of the new article 7 bis added to Law 19/2003 of 4 July by Royal Decree Law 8/2020. As a consequence, improves the legislative technique by clearly defining the cases that must be considered as "foreign direct investments in Spain" for the purposes of applying the new suspension regime introduced as a result of the COVID-19 crisis.

Thus, we are talking about foreign direct investment in Spain when an investor holds a stake equal to or greater than 10 per cent of the share capital of the Spanish company, or when, as a result of the corporate transaction, the actor effectively participates in the management or control of that company provided that one of these circumstances occurs:

a. That are carried out by investors from countries other than the European Union and the European Free Trade Association or

b. That are carried out by investors of the European Union or the European Free Trade Association countries, controlled by residents of countries outside the European Union and the European Free Trade Association. There is “control” when a percentage greater than 25% of the capital or voting rights is owned, directly or indirectly, or when by other means they exercise control over the investor.

In addition, the regulation establishes the transactions that are exempt from the prior authorization regime. The Second Transitional Provision fixes this amount on a transitional basis at one million euros.

The second new is of a procedural nature and it is contained in the Transitional Provision. It contains that certain applications will be processed ex officio by the simplified administrative procedure contained in Law 39/2015, of 1 October, on the Common Administrative Procedure of Public Administrations. It attributes the competence for granting it to the Directorate General for International Trade and Investment, previous report from the Board of Foreign Investments.

4. Collective Investment Institutions (Fourth Final Provision): Law 35/2003, of November 4th, on Collective Investment Institutions, is amended with regard to the leverage limits and the credit evaluation processes and liquidity risk, allowing the CNMV, in order to guarantee equal treatment among shareholders, or for reasons of stability of the financial system, those measures are temporary and must be justified:

a. Require management companies of collective investment institutions to reinforce the level of liquidity of portfolios and, in particular, to increase the percentage of investment in liquid assets defined by the CNMV;

b. Authorize collective investment institution management companies to establish notice periods for reimbursement  on one or more collective investment institutions that they manage, without being subject to "the requirements of time, minimum amount and prior notice contained in regulations applicable on a regular basis". Such notice periods may also be established by the CNMV.

5. New competence of the Bank of Spain (First Final Provision): A new article, 16 bis, is introduced in Royal Decree Law 8/2020, on the moratorium regime for mortgage debt for the acquisition of habitual residence, requiring lenders supervised by the Bank of Spain to send information each working day, referring to the previous working day, including the number of requests for suspension presented by debtors, the number of suspensions granted, the number of beneficiaries of the suspension or the number of loans whose payment has been suspended.

In addition, they are classified as rules for the organization and discipline of credit institutions in accordance with Law 10/2014 of June 26th on the organization, supervision and solvency of credit institutions, Articles 7 to 16 and the first paragraph of the new Article 16a of Royal Decree Law 8/2020.

Measures regarding labor law

Regarding employment, the new package of social measures is aimed at supporting workers, companies and vulnerable collectives.

1. Exceptional unemployment benefits at the end of a temporary contract

Workers with a temporary contract, training contract or relief contract, whose minimum duration is of two months and whose contract is terminated after the state of alarm declaration, will be entitled to receive exceptional unemployment benefits. This, provided that they haven’t got a minimum contribution period for the unemployment benefits and that they lack from minimum incomes. The amount of the subsidy will be 80% of the current Public Multiple Effect Income Indicator (IPREM) and will last for one month, which may be extended by Royal Decree-Law 11/2020.

2. Moratorium on contributions and deferment of social security debts

The Social Security Fund may grant six-month moratoriums to companies in relation to the contributions and joint collection items for April 2020 to June 2020 period. With the exception that the company starts an ERTE due to force majeure and obtains exemptions in the payments of the company contribution and joint collection fees.

Companies may request the deferment of their social security payments, of the debts whose statutory deadline payment is between April 2020 and June 2020, with an interest of 0.5%.

3. Corporate commitment to safeguard employment

The commitment to maintain employment contained in Royal Decree Law 8/2020 will be assessed in the light of the specific characteristics of the various sectors and the applicable labor regulation. For instance, the specialties of companies that have a high variability or seasonality of employment or a direct relationship with the performing, musical, film and audiovisual arts will be taken into account.

The commitment to safeguard employment will not be understood to have been breached when a temporary contract is terminated due to (i) the expiration of the agreed time, (ii) the execution of the work or service, or (iii) when the activity that is the object of the contract cannot be carried out immediately.

4. Availability of pension plans in case of unemployment due to COVID-19

The participants in pension plans, assured savings plans, company savings plans and mutual benefit societies may, exceptionally, within the six months following the entry into force of RD 463/2020, make their consolidated rights effective, provided that (i) they are legally unemployed by an ERTE or (ii) if they are the owners of establishments whose opening to the public has been suspended by Royal Decree 463/2020.

The amount of the vested rights may not exceed (i) the wages ceased to be received while the ERTE remains in force or (ii) the estimated net income ceased to be received while the establishment remains suspended from opening to the public.

5. Temporary incapacity in exceptional situations of total confinement

The protection for temporary incapacity goes back to the beginning of the situation of confinement and by means of the corresponding leave, in relation to workers obliged to move from one place to another to provide essential services, provided that (i) the confinement of the place where the worker is domiciled has been agreed and the possibility of moving has been expressly denied, (ii) the worker cannot carry out his work telematically for reasons not attributable to the company or to the worker and (iii) he is not entitled to receive any other public provision.

6. Validity of the measures provided for in Royal Decree Law 8/2020

The measures contained in Royal Decree-Law 8/2020 will remain in force until one month after the end of the state of alarm.

Tax measures

In the tax area, the measures adopted cover the following issues:

1. Relaxation of the payment of import customs debts

The possibility of applying for the deferment of customs and tax debts corresponding to customs declarations presented from the date of entry into force of the aforementioned Royal Decree-Law 11/2020 until May 30, both inclusive, is established, provided that the applications submitted until May 30 meet the following requirements:

  1. The recipient of the imported goods must be a person or entity with a volume of operations not exceeding 6,010,121.04 euros in 2019; and,
  2. The amount of the customs debt incurred may not be less than 100 euros nor more than 30,000 euros.

This deferral shall not apply to those entities that settle their VAT payments on imports using the deferred VAT system regulated in Article 167.2 of Law 38/1992, of December 28, on Value Added Tax. In these cases, these entities will be obliged to include the import VAT payments in their periodic returns-settlements (form 303).

2. Suspension of tax deadlines in the area of Autonomous Regions and Local Entities

The suspension of tax procedure deadlines established in article 33 of Royal Decree-Law 8/2020 will apply to actions, formalities and procedures of a tax nature (regulated by General Taxation Law 58/2003 of 17 December 2003, its implementing regulations and/or the revised text of the Law Regulating Local Treasuries approved by Royal Decree Law 2/2004 of 5 March 2004) that are carried out and processed by the tax administrations of the Autonomous Communities and Local Entities.

3. Extension of the deadline to appeal in the tax area

From the entry into force of Royal Decree 463/2020 until April 30, 2020, the deadline for lodging appeals for reversal or economic-administrative claims governed by Law 58/2003 of December 17, on General Taxation, and its implementing regulations shall commence on April 30, 2020 and shall apply both in cases where the period for appeal of one month commenced on the day following notification of the contested act or decision and did not end on 13 March 2020, and in cases where the administrative act or decision which is the subject of the appeal or complaint has not yet been notified. The same measure shall be applicable to appeals for reversal and claims which, in the tax area, are regulated in the consolidated text of the Law Regulating Local Treasuries, approved by Royal Legislative Decree 2/2004, of 5 March.

4. Time limits for tax proceedings

It is established that the period between 14 March 2020 (entry into force of Royal Decree 463/2020, of the same date), and 30 April 2020:

1. Shall not count for the purposes of the maximum duration of the period for execution of the resolutions of economic-administrative bodies; and

2. the periods of prescription and expiry of any actions and rights provided for in the tax regulations are suspended.

Moratorium on rental and mortgage debt

1. Measures to support workers, families and vulnerable groups in connection with the moratorium on rental debt

Measures have been established to seek a moratorium on rent payments for tenants of habitual residences in situations of economic vulnerability caused by COVID-19:

- Extraordinary extension of the contract for the rental of a habitual residence (article 2), at the request of the tenant for a maximum period of 6 months under the same terms and conditions, in those contracts which, from the entry into force of Royal Decree-Law 11/2020 and until two months have elapsed since the end of the state of alarm, end the period of compulsory extension. (Art. 2). This request must be accepted by the landlord, unless other terms or conditions are fixed by agreement between the parties.

- Moratorium on rental debt and aids related to the rental income of the habitual residence. Measures are established to seek a moratorium on rental debt for tenants of habitual residences in situations of economic vulnerability due to the COVID-19, in Articles 4 to 9, both included, of Royal Decree Law 11/2020.

Thus, while Article 5 defines the situation of economic vulnerability for these purposes and Article 6 establishes the way to accredit its concurrence, Article 4 establishes that the lessee who is in such a situation may apply to the lessor when the latter is a public housing company or entity or a large holder, understood as the natural or legal person who owns more than ten urban properties, excluding garages and storage rooms, or a built area of more than 1. 500 m2 , within one month from the entry into force of the Royal Decree-Law, the temporary and extraordinary postponement of the payment of the rent, as long as that said postponement or the total or partial remission of the rent has not already been achieved voluntarily by agreement between the parties.

In the absence of an agreement, the landlord will inform the tenant, within a maximum period of 7 working days, of his decision, chosen from various formulas for reducing or deferring payment of the rent.

These measures will be applied to all leases corresponding to the Social Housing Fund derived from Royal Decree Law 27/2012 of 15 November, on urgent measures to reinforce the protection of mortgage debtors.

If the tenant accesses the transitional financing aid programme regulated by Article 9, the moratorium on rental payments and the consequent quota allocation will be lifted.

In accordance with Article 7, the improper application by the tenant of the exceptional moratorium on rental debt and public aid will give rise to liability for any damages that may have been caused, as well as for all expenses generated by the application of these exceptional measures, without prejudice to any other responsibilities that may arise from their conduct.

For its part, Article 8 allows the exceptional and transitory modification of the contractual conditions of rent in the case of lessors not included among those listed in Article 4. Specifically, temporary and extraordinary postponement of the payment of rent may be requested, provided that such postponement or the total or partial remission of the rent has not been voluntarily agreed between the parties.  If the individual lessor does not accept any agreement on the deferment and, in any case, when the individual lessor is in the situation of supervening vulnerability referred to in Article 5, he or she may have access to the programme of transitional financing assistance.

Finally, Articles 9 and 10 provide, respectively, for the approval of a line of guarantees to cover financing on behalf of the State for tenants in a situation of social and economic vulnerability as a result of the expansion of COVID-19 through an agreement between the Ministry of Transport, Mobility and the Urban Agenda and the Institute of Official Credit, and a new aid programme to help minimise the economic and social impact of COVID-19 on rentals for permanent housing. (applicable regime of the Royal Decree 106/2018 of 9 March).

2. Modifications to mortgage default established in Royal Decree Law 8/2020

- Extension of the moratorium on mortgage debt under Royal Decree-Law 8/2020, initially envisaged for the habitual residence of individuals, to two new cases: (Art. 19)

  1. the self-employed workers, entrepreneurs and professionals with respect to the property related to their economic activity and meeting the requirements of Article 16.1.
  2. natural persons who have leased real estate for which they do not receive the rental income in application of the measures in favour of the tenants as a result of the state of alarm.

- The period of suspension of mortgage default is set at 3 months, thus clarifying a gap in Royal Decree Law 8/2020. (DF.1.6). It is not expressly regulated from when the three months should be counted, but the most reasonable interpretation is to count them from the debtor's request.

- The notary and registry fees derived from the formalization and registration of the legal mortgage moratorium and the formalization and registration of the novation of the mortgage loan will be paid in all cases by the creditor and will be subsidized by 50%. (DF.1st.Seven)

- Non-mortgage moratorium.  The moratorium is applied, in similar terms to the mortgage moratorium, (with respect to debtors, guarantors and the period of suspension) to non-mortgage loans and credits maintained by persons in a situation of economic vulnerability, including consumer credits, with respect to all those loans or credits that were in force on the date of entry into force of Royal Decree Law 11/2020. (Articles 21-24)

Guarantee of water, electricity and gas supply

While the state of alarm remains in force, the supply of electrical energy, petroleum products (including manufactured gases and LPG), natural gas or water to individual consumers in their habitual residence cannot be suspended for reasons other than the security of supply, persons and installations, and regardless of whether this possibility appears in the supply or access contracts concluded.

Measures regarding subsidies and public aids

The possibility of amending the orders and resolutions calling for and awarding grants and public aid provided in Article 22.1 of Law 38/2003 of 17 November 2003, on General Subsidies, which had already been awarded at the time of the entry into force of Royal Decree 463/2020, is envisaged in order to extend the deadlines for carrying out the subsidised activity and, where appropriate, for justifying and verifying such execution, and this regardless of whether such possibility had been envisaged in the corresponding regulatory bases. For this purpose, it is sufficient for the competent body to justify the impossibility of carrying out the subsidised activity while the state of alert is in force, as well as the inadequacy of the time remaining after its completion for carrying out the subsidised activity or its justification or verification. The possibility of amending, at the request of the beneficiary and under the same conditions as above, resolutions and agreements for the direct award of grants is also provided for.

The adoption of these amendments is not affected by the suspension of deadlines and administrative procedures provided for in the third additional provision of Royal Decree 463/2020.

Measures regarding administrative deadlines 

The calculation of the time periods for lodging appeals in administrative proceedings or for initiating any other procedure of challenge, claim, conciliation, mediation and arbitration that replace them in accordance with the provisions of the Law, in procedures that may have unfavourable effects or a burden on the interested parties, will be made from the working day following the date of completion of the declaration of the state of alarm and this regardless of the time that has elapsed since the notification of the administrative action that is the object of the appeal or challenge prior to the declaration of the state of alarm. In other words, the calculation of this period is restarted (not resumed). The above is without prejudice to the effectiveness and enforceability of the administrative act being appealed against or contested.

Measures regarding public procurement

Article 34 Royal Decree Law 8/2020 is amended, with effect from its entry into force. The main amendments are as follows:

- Possibility of partial suspension of public service and supply of successive services contracts: contracts of this nature concluded by public sector entities may be suspended not only totally but also partially in the event that their execution proves impossible as a result of COVID-19 or the measures adopted by public administrations to combat it. In the event of partial suspension, the compensation to be paid to the contractor must be limited to the suspended part of the contract

- Possibility of extending works contracts: In those contracts where the end of their execution period is foreseen between the beginning of the state of alarm (14 March) and their completion and as a consequence of the de facto situation created by COVID-19 or the measures adopted by the State the delivery of the works cannot take place, the contractor may request an extension of the final delivery period as long as he offers to comply with his outstanding commitments if the initial deadline is extended.

- It clarifies what is meant by public contracts for the purposes of Article 34 of Royal Decree-Law 8/2020 (all those which, in accordance with their specifications and regardless of their administrative or private nature, are subject to Law 9/2017, Royal Legislative Decree 3/2011, Law 31/2007, Book I of Royal Decree-Law 3/2020 or Law 24/2011).

Measures regarding electricity generation 

The eighth transitional provision of Law 24/2013, of 26 December, on the Electricity Sector, states that the permissions for access and connection to the electricity networks granted before the entry into force of said law will expire if, prior to 31 March 2020, the operating authorisation for the generation facility associated with them has not been obtained. Although this expiry period was to be understood as suspended in accordance with the provisions of Royal Decree 463/2020, an additional period of validity of these permits of two months from the end of the state of alert was granted in order to provide legal certainty to both the promoters of electricity generation projects who own these permissions and the managers of the corresponding transmission and distribution networks.

Madrid

Almagro, 16-18
Madrid 28010
T: (+34) 91 576 19 00

Barcelona

Avenida Diagonal 615, 8ª planta.
08028
T (+34) 93 494 74 82

Ramón y Cajalabogados
#SomosRyC
Royal Decree- Law 11/2020, of 31 March 2020 adopting urgent measures to deal with COVID-19
07 de Abril de 2020

The following is a summary of the main decisions taken by the Council of Ministers and contained in the Royal Decree-Law 11/2020, of 31 March, adopting additional urgent measures in the social and economic areas to deal with COVID-19.

Measures regarding litigation and bankruptcy matters 

Measures taken by Royal Decree-Law 11/2020, which affect procedural and bankruptcy matters as a result of the effects caused by the health crisis of the "COVID-19" which follow other measures, already in force, in the previous Royal Decree-Law 8/2020, of 17 March, on extraordinary urgent measures to deal with the economic and social impact of the COVID 19, are the following:

1. Home eviction proceedings

Measures adopted by the aforementioned Royal Decree-Law 11/2020, regarding evictions, are the following:

  1. Article 1.  Suspension of the eviction proceedings of vulnerable homes without alternative housing.

Fact: it will be carried out once the procedural deadlines (agreed by Royal Decree-Law 463/2020 of 14 March, declaring the state of alarm for the management of the health crisis situation caused by the COVID-19) have been lifted in the processing of eviction procedures derived from housing rental contracts, subject to Law 29/1994 of 24 November on Urban Rentals.

Circumstance: the tenant (natural person) must prove to the Court that they are in a situation of social or economic vulnerability as a result of COVID-19, which prevents them from finding alternative housing for themselves or for the people living in the rented property.

Vulnerability situation: proof must be provided that you are in one of the circumstances described in Article 5 of Royal Decree-Law 11/2020 by means of the documentation specified in Article 6 of Royal Decree-Law 11/2020.

Consequence: suspension of the eviction proceedings. Once it is requested by the tenant, after the review of the fulfilment of requirements by the Court Clerk, it will be agreed for the strictly necessary time, and the documentation will be sent to the competent social services for their consideration.

Landlord: if the landlord proves that he is also in a situation of social or economic vulnerability, he must present a written document supporting this circumstance (arts. 5 and 6 Royal Decree Law 11/2020), which will be sent by the Court Clerk to the competent social services for their consideration within the agreed period of suspension.

Suspension period: the suspension period will last a maximum of 6 months, from the entry into force of Royal Decree Law 11/2020.

  1. Article 11. Replacement of the assistance programme to persons in an eviction situation of their habitual residence by the new assistance programme to victims of gender violence, persons subject to eviction from their habitual residence, homeless persons and other particularly vulnerable persons regulated in the following article.

Purpose: to provide an immediate housing solution to victims of gender violence, persons subject to eviction from their habitual residence, the homeless and other particularly vulnerable persons.

  1. First Transitory Provision. Transitional regime applicable to the assistance programme to persons in an eviction situation of their housing.

Purpose: The benefits recognised under the programme of aid for persons in an eviction situation of their habitual residence, maintains its effects for the total period and the total amount for which it was recognised.

2. Bankruptcy

In the bankruptcy area, with respect to the provision of Article 43 of Royal Decree Law 11/2020, nothing else is added, which implies the maintenance of the provisions therein regarding the obligation to apply for bankruptcy for the debtor who is in a situation of insolvency, until two months have elapsed since the state of alert has been lifted.

A Fourth Transitory Provision is introduced into this Royal Decree Law 11/2020, which grants objective competence to the Labour Courts for the processing of the measures provided for in Articles 22 and 23 of Royal Decree Law 8/2020 (suspension of contracts and reduction of working hours due to force majeure, as well as economic, technical, organisational and production reasons). The Commercial Courts are thus deprived of the competence they had hitherto held in accordance with Article 86ter 1.2 of the Organic Law of the Judiciary and Article 64 of Law 22/2003 of 9 July on Bankruptcy.

The files that were processed or were being processed at the time of the entry into force of Royal Decree Law 11/2020 will still be valid.

3. Procedural facilitation

The Nineteenth Additional Provision promotes procedural facilitation once the state of alarm is lifted, in the social, contentious-administrative and commercial courts.  Pending the publication of this Action Plan, everything points to the fact that it could refer to reinforcement measures in light of a significant increase in the cases in these jurisdictions. This is expressed in the following terms:

Nineteenth additional provision. Procedural facilitation.

Once the declaration of the state of alarm has been left and, in consequence, the granted extensions, if applicable, the Government, at the proposal of the Ministry of Justice, will approve as soon as possible and in any case within a maximum period of 15 days, an Action Plan to speed up judicial activity in the social and contentious-administrative jurisdictional orders as well as in the area of the commercial courts with the aim of contributing to the rapid economic recovery objective after overcoming the crisis.

Measures for the protection of consumers and users applicable to certain contracts which cannot be performed due to COVID-19

Article 36 of Royal Decree Law 11/2020 establishes the following measures for the protection of consumers and users, applicable to certain contracts whose execution is impossible as a result of the state of alarm and the measures adopted to contain the pandemic:

1. Sales contracts or single tract service delivery: in these cases, consumers may exercise the right to terminate the contract for a period of 14 days, when it’s  not possible to obtain from the proposal(s) for revision offered by each of the parties (on the basis of good faith), a solution which restores the reciprocity of interests of the contract. Proposals for revision may include, inter alia, the offer of bonds or substitute vouchers to the reimbursement. It will be understood that no proposal for revision can be obtained, if 60 days have elapsed since the impossible performance of the contract without an agreement by the parties.

If the contract performance seems impossible, the entrepreneur is obliged to return the sums paid by the consumer (except for expenses incurred duly itemised and provided to the consumer) in the same form in which payment was made within a maximum of 14 days, unless the consumer expressly accepts different conditions.

2. Consecutive nature delivery services: in these cases, consumers may exercise the right to terminate the contract on the same terms as those for single-tract services. However, the company may offer options to recover the service, only if the consumer is unable to accept or does not accept such recovery (the amounts already paid will be refunded in part, corresponding to the period of the service not provided for that reason). Or, with the consumer's acceptance, reduce the amount resulting from future fees for the provision of the service. Likewise, the payment of new fees or monthly payments will be paralysed until the service can be provided again normally; however, the contract will not be terminated (except by the parties’ agreement).

3. Combined travel contracts cancelled by virtue of COVID-19: in these cases (including those cancelled due to measures to contain the pandemic taken by the authorities at the destination), the consumer may choose to request a refund or make use of the voucher for an amount equal to the refund, which will be provided by the organizer or, where appropriate, the retailer. The voucher may be used within one year from the end of the state of alarm. If it is not used within that period, the consumer may exercise the right to a full refund of any payment made. The offer of a temporary replacement voucher must have sufficient financial backing to guarantee its execution.

However, the organizer or, where appropriate, the retailer must reimburse consumers and users, if the latter request termination of the contract in accordance with Article 160. 2 of the General Law for the Defence of Consumers and Users and other complementary laws (this means, before the start of the journey, when unavoidable and extraordinary circumstances occur in the place of destination or in the vicinity that significantly affect the execution of the journey or the transport of passengers to the place of destination). Only if that the services providers included in the package travel contract, have proceeded to the total refund of the amount corresponding to their services. If only some of the services providers of the combined trip made the return to the organizer or, if appropriate, the retailer, or the amount returned by each of them was partial, the consumer or user will be entitled to a partial refund corresponding to the refunds made, being deducted from the amount of the voucher delivered by the resolution of the contract.

The maximum period for making the above-mentioned refunds is 60 days from the date of termination of the contract or from the date on which the services providers made the refund.

Measures in commercial and financial matters

Royal Decree Law 11/2020 contains new rules in financial matters and amends Articles 40 and 41 of Royal Decree Law 8/2020 and some special rules for the financial sector:

1. Recovery of pension plans (Additional Provision Twenty): Given the health crisis caused by the COVID-19, the Royal Decree contains the possibility of recovering pension plans in the event of unemployment or cessation of activity as a result of the crisis.

Thus, for the next six months since the Royal Decree 463/2020, for the management of the health crisis situation caused by the COVID-19, has come into effect that the participants in the pension plans may, exceptionally, make their consolidated rights effective only in certain cases indicated in the Additional Provision. For example, and among others, being in legal situation of unemployment as a result of a temporary employment file derived from the health crisis situation; or being the owner of establishments whose opening to the public has been suspended as a result of the provisions of Royal Decree 463/2020.

The amount of the available consolidated rights may not exceed, for example, and among others, the salaries that are not received during the temporary employment regulation file.

In any case, the reimbursement of those consolidated rights will be made at the request of the participant, subject to the tax regime established for pension plan profits, and must be made within a maximum of seven working days from the date the participant files the corresponding supporting documentation.

These measures will also be applicable to insured parties of insured pension plans, company pension plans and mutual social welfare societies.

2. Amendment of Articles 40 and 41 of Royal Decree Law 8/2020 (First Final Provision, paragraphs 13 and 14)

Article 40, on extraordinary measures applicable to legal entities governed by private law, is amended in the following areas

a. General meeting. Holding: even if it is not provided in the articles of association, it is permitted to hold meetings or assemblies of associates by video or multiple telephone conference, if all members entitled to attend, or those representing them, have the necessary means that the secretary of the body recognizes their identity and that this is expressed in the minutes that will be sent immediately to the attendants by e-mail.

b. Internal bodies: The possibility of holding the meetings of the governing and management bodies both by videoconference or multiple telephone conference is envisaged with the same formalities as those explained above.

c. Formulation of annual report, management reports and similar documents that are compulsory under corporate law, the 3-month period from the end of the financial year for the formulation of annual accounts is suspended during the state of alarm. This provision applies to the annual reports, ordinary or abbreviated, individual or consolidated. Likewise, it is recognized that the formulation of the accounts by the governing body or administration of a legal entity during the state of alarm will be valid, allowing their accounting verification to be carried out within the legally established period or making use of the extension provided for in Royal Decree Law 8/2020, that is, two months from the end of the state of alarm.

d. Profit distribution proposal: A new section is included (6 Bis) which differentiates  between (i) the commercial companies that, having formulated their annual reports, call the Ordinary General Meeting after April 1st 2020. These entities may replace the profit distribution proposal contained in the report with another proposal. To do so, the administrative body must justify, based on the situation created by COVID-19, the replacement of the proposal and accompany it with a letter from the accounts auditor stating that he would not have modified his audit opinion if he had known of the new proposal at the time of its signature; (ii) in the case of commercial companies whose ordinary general meeting has already been called, the administrative body is allowed to remove the profit distribution proposal from the agenda for the purpose of submitting a new proposal for approval by the general meeting which must be held within the legal deadline for holding the ordinary general meeting, with the administrative body being required to publish this decision prior to the holding of the general meeting. In any case, the requirements for justification and writing by the auditor set out above must be complied.

In addition, a new paragraph 3 is included in article 41, which requires that listed companies that apply the measures provided for in article 40.6 of Royal Decree Law 8/2020, shall make public, as soon as it is approved, the new proposal, its justification by the administrative body and the auditor's statement, as complementary information on their website and as other relevant information or, as privileged information on the website of the CNMV.

3. Suspension of the regime for the liberalization of certain foreign direct investments in Spain (Third Final Provision and Second Transitional Provision): Two new features are introduced, the first one has a material content and modifies section one of the new article 7 bis added to Law 19/2003 of 4 July by Royal Decree Law 8/2020. As a consequence, improves the legislative technique by clearly defining the cases that must be considered as "foreign direct investments in Spain" for the purposes of applying the new suspension regime introduced as a result of the COVID-19 crisis.

Thus, we are talking about foreign direct investment in Spain when an investor holds a stake equal to or greater than 10 per cent of the share capital of the Spanish company, or when, as a result of the corporate transaction, the actor effectively participates in the management or control of that company provided that one of these circumstances occurs:

a. That are carried out by investors from countries other than the European Union and the European Free Trade Association or

b. That are carried out by investors of the European Union or the European Free Trade Association countries, controlled by residents of countries outside the European Union and the European Free Trade Association. There is “control” when a percentage greater than 25% of the capital or voting rights is owned, directly or indirectly, or when by other means they exercise control over the investor.

In addition, the regulation establishes the transactions that are exempt from the prior authorization regime. The Second Transitional Provision fixes this amount on a transitional basis at one million euros.

The second new is of a procedural nature and it is contained in the Transitional Provision. It contains that certain applications will be processed ex officio by the simplified administrative procedure contained in Law 39/2015, of 1 October, on the Common Administrative Procedure of Public Administrations. It attributes the competence for granting it to the Directorate General for International Trade and Investment, previous report from the Board of Foreign Investments.

4. Collective Investment Institutions (Fourth Final Provision): Law 35/2003, of November 4th, on Collective Investment Institutions, is amended with regard to the leverage limits and the credit evaluation processes and liquidity risk, allowing the CNMV, in order to guarantee equal treatment among shareholders, or for reasons of stability of the financial system, those measures are temporary and must be justified:

a. Require management companies of collective investment institutions to reinforce the level of liquidity of portfolios and, in particular, to increase the percentage of investment in liquid assets defined by the CNMV;

b. Authorize collective investment institution management companies to establish notice periods for reimbursement  on one or more collective investment institutions that they manage, without being subject to "the requirements of time, minimum amount and prior notice contained in regulations applicable on a regular basis". Such notice periods may also be established by the CNMV.

5. New competence of the Bank of Spain (First Final Provision): A new article, 16 bis, is introduced in Royal Decree Law 8/2020, on the moratorium regime for mortgage debt for the acquisition of habitual residence, requiring lenders supervised by the Bank of Spain to send information each working day, referring to the previous working day, including the number of requests for suspension presented by debtors, the number of suspensions granted, the number of beneficiaries of the suspension or the number of loans whose payment has been suspended.

In addition, they are classified as rules for the organization and discipline of credit institutions in accordance with Law 10/2014 of June 26th on the organization, supervision and solvency of credit institutions, Articles 7 to 16 and the first paragraph of the new Article 16a of Royal Decree Law 8/2020.

Measures regarding labor law

Regarding employment, the new package of social measures is aimed at supporting workers, companies and vulnerable collectives.

1. Exceptional unemployment benefits at the end of a temporary contract

Workers with a temporary contract, training contract or relief contract, whose minimum duration is of two months and whose contract is terminated after the state of alarm declaration, will be entitled to receive exceptional unemployment benefits. This, provided that they haven’t got a minimum contribution period for the unemployment benefits and that they lack from minimum incomes. The amount of the subsidy will be 80% of the current Public Multiple Effect Income Indicator (IPREM) and will last for one month, which may be extended by Royal Decree-Law 11/2020.

2. Moratorium on contributions and deferment of social security debts

The Social Security Fund may grant six-month moratoriums to companies in relation to the contributions and joint collection items for April 2020 to June 2020 period. With the exception that the company starts an ERTE due to force majeure and obtains exemptions in the payments of the company contribution and joint collection fees.

Companies may request the deferment of their social security payments, of the debts whose statutory deadline payment is between April 2020 and June 2020, with an interest of 0.5%.

3. Corporate commitment to safeguard employment

The commitment to maintain employment contained in Royal Decree Law 8/2020 will be assessed in the light of the specific characteristics of the various sectors and the applicable labor regulation. For instance, the specialties of companies that have a high variability or seasonality of employment or a direct relationship with the performing, musical, film and audiovisual arts will be taken into account.

The commitment to safeguard employment will not be understood to have been breached when a temporary contract is terminated due to (i) the expiration of the agreed time, (ii) the execution of the work or service, or (iii) when the activity that is the object of the contract cannot be carried out immediately.

4. Availability of pension plans in case of unemployment due to COVID-19

The participants in pension plans, assured savings plans, company savings plans and mutual benefit societies may, exceptionally, within the six months following the entry into force of RD 463/2020, make their consolidated rights effective, provided that (i) they are legally unemployed by an ERTE or (ii) if they are the owners of establishments whose opening to the public has been suspended by Royal Decree 463/2020.

The amount of the vested rights may not exceed (i) the wages ceased to be received while the ERTE remains in force or (ii) the estimated net income ceased to be received while the establishment remains suspended from opening to the public.

5. Temporary incapacity in exceptional situations of total confinement

The protection for temporary incapacity goes back to the beginning of the situation of confinement and by means of the corresponding leave, in relation to workers obliged to move from one place to another to provide essential services, provided that (i) the confinement of the place where the worker is domiciled has been agreed and the possibility of moving has been expressly denied, (ii) the worker cannot carry out his work telematically for reasons not attributable to the company or to the worker and (iii) he is not entitled to receive any other public provision.

6. Validity of the measures provided for in Royal Decree Law 8/2020

The measures contained in Royal Decree-Law 8/2020 will remain in force until one month after the end of the state of alarm.

Tax measures

In the tax area, the measures adopted cover the following issues:

1. Relaxation of the payment of import customs debts

The possibility of applying for the deferment of customs and tax debts corresponding to customs declarations presented from the date of entry into force of the aforementioned Royal Decree-Law 11/2020 until May 30, both inclusive, is established, provided that the applications submitted until May 30 meet the following requirements:

  1. The recipient of the imported goods must be a person or entity with a volume of operations not exceeding 6,010,121.04 euros in 2019; and,
  2. The amount of the customs debt incurred may not be less than 100 euros nor more than 30,000 euros.

This deferral shall not apply to those entities that settle their VAT payments on imports using the deferred VAT system regulated in Article 167.2 of Law 38/1992, of December 28, on Value Added Tax. In these cases, these entities will be obliged to include the import VAT payments in their periodic returns-settlements (form 303).

2. Suspension of tax deadlines in the area of Autonomous Regions and Local Entities

The suspension of tax procedure deadlines established in article 33 of Royal Decree-Law 8/2020 will apply to actions, formalities and procedures of a tax nature (regulated by General Taxation Law 58/2003 of 17 December 2003, its implementing regulations and/or the revised text of the Law Regulating Local Treasuries approved by Royal Decree Law 2/2004 of 5 March 2004) that are carried out and processed by the tax administrations of the Autonomous Communities and Local Entities.

3. Extension of the deadline to appeal in the tax area

From the entry into force of Royal Decree 463/2020 until April 30, 2020, the deadline for lodging appeals for reversal or economic-administrative claims governed by Law 58/2003 of December 17, on General Taxation, and its implementing regulations shall commence on April 30, 2020 and shall apply both in cases where the period for appeal of one month commenced on the day following notification of the contested act or decision and did not end on 13 March 2020, and in cases where the administrative act or decision which is the subject of the appeal or complaint has not yet been notified. The same measure shall be applicable to appeals for reversal and claims which, in the tax area, are regulated in the consolidated text of the Law Regulating Local Treasuries, approved by Royal Legislative Decree 2/2004, of 5 March.

4. Time limits for tax proceedings

It is established that the period between 14 March 2020 (entry into force of Royal Decree 463/2020, of the same date), and 30 April 2020:

1. Shall not count for the purposes of the maximum duration of the period for execution of the resolutions of economic-administrative bodies; and

2. the periods of prescription and expiry of any actions and rights provided for in the tax regulations are suspended.

Moratorium on rental and mortgage debt

1. Measures to support workers, families and vulnerable groups in connection with the moratorium on rental debt

Measures have been established to seek a moratorium on rent payments for tenants of habitual residences in situations of economic vulnerability caused by COVID-19:

- Extraordinary extension of the contract for the rental of a habitual residence (article 2), at the request of the tenant for a maximum period of 6 months under the same terms and conditions, in those contracts which, from the entry into force of Royal Decree-Law 11/2020 and until two months have elapsed since the end of the state of alarm, end the period of compulsory extension. (Art. 2). This request must be accepted by the landlord, unless other terms or conditions are fixed by agreement between the parties.

- Moratorium on rental debt and aids related to the rental income of the habitual residence. Measures are established to seek a moratorium on rental debt for tenants of habitual residences in situations of economic vulnerability due to the COVID-19, in Articles 4 to 9, both included, of Royal Decree Law 11/2020.

Thus, while Article 5 defines the situation of economic vulnerability for these purposes and Article 6 establishes the way to accredit its concurrence, Article 4 establishes that the lessee who is in such a situation may apply to the lessor when the latter is a public housing company or entity or a large holder, understood as the natural or legal person who owns more than ten urban properties, excluding garages and storage rooms, or a built area of more than 1. 500 m2 , within one month from the entry into force of the Royal Decree-Law, the temporary and extraordinary postponement of the payment of the rent, as long as that said postponement or the total or partial remission of the rent has not already been achieved voluntarily by agreement between the parties.

In the absence of an agreement, the landlord will inform the tenant, within a maximum period of 7 working days, of his decision, chosen from various formulas for reducing or deferring payment of the rent.

These measures will be applied to all leases corresponding to the Social Housing Fund derived from Royal Decree Law 27/2012 of 15 November, on urgent measures to reinforce the protection of mortgage debtors.

If the tenant accesses the transitional financing aid programme regulated by Article 9, the moratorium on rental payments and the consequent quota allocation will be lifted.

In accordance with Article 7, the improper application by the tenant of the exceptional moratorium on rental debt and public aid will give rise to liability for any damages that may have been caused, as well as for all expenses generated by the application of these exceptional measures, without prejudice to any other responsibilities that may arise from their conduct.

For its part, Article 8 allows the exceptional and transitory modification of the contractual conditions of rent in the case of lessors not included among those listed in Article 4. Specifically, temporary and extraordinary postponement of the payment of rent may be requested, provided that such postponement or the total or partial remission of the rent has not been voluntarily agreed between the parties.  If the individual lessor does not accept any agreement on the deferment and, in any case, when the individual lessor is in the situation of supervening vulnerability referred to in Article 5, he or she may have access to the programme of transitional financing assistance.

Finally, Articles 9 and 10 provide, respectively, for the approval of a line of guarantees to cover financing on behalf of the State for tenants in a situation of social and economic vulnerability as a result of the expansion of COVID-19 through an agreement between the Ministry of Transport, Mobility and the Urban Agenda and the Institute of Official Credit, and a new aid programme to help minimise the economic and social impact of COVID-19 on rentals for permanent housing. (applicable regime of the Royal Decree 106/2018 of 9 March).

2. Modifications to mortgage default established in Royal Decree Law 8/2020

- Extension of the moratorium on mortgage debt under Royal Decree-Law 8/2020, initially envisaged for the habitual residence of individuals, to two new cases: (Art. 19)

  1. the self-employed workers, entrepreneurs and professionals with respect to the property related to their economic activity and meeting the requirements of Article 16.1.
  2. natural persons who have leased real estate for which they do not receive the rental income in application of the measures in favour of the tenants as a result of the state of alarm.

- The period of suspension of mortgage default is set at 3 months, thus clarifying a gap in Royal Decree Law 8/2020. (DF.1.6). It is not expressly regulated from when the three months should be counted, but the most reasonable interpretation is to count them from the debtor's request.

- The notary and registry fees derived from the formalization and registration of the legal mortgage moratorium and the formalization and registration of the novation of the mortgage loan will be paid in all cases by the creditor and will be subsidized by 50%. (DF.1st.Seven)

- Non-mortgage moratorium.  The moratorium is applied, in similar terms to the mortgage moratorium, (with respect to debtors, guarantors and the period of suspension) to non-mortgage loans and credits maintained by persons in a situation of economic vulnerability, including consumer credits, with respect to all those loans or credits that were in force on the date of entry into force of Royal Decree Law 11/2020. (Articles 21-24)

Guarantee of water, electricity and gas supply

While the state of alarm remains in force, the supply of electrical energy, petroleum products (including manufactured gases and LPG), natural gas or water to individual consumers in their habitual residence cannot be suspended for reasons other than the security of supply, persons and installations, and regardless of whether this possibility appears in the supply or access contracts concluded.

Measures regarding subsidies and public aids

The possibility of amending the orders and resolutions calling for and awarding grants and public aid provided in Article 22.1 of Law 38/2003 of 17 November 2003, on General Subsidies, which had already been awarded at the time of the entry into force of Royal Decree 463/2020, is envisaged in order to extend the deadlines for carrying out the subsidised activity and, where appropriate, for justifying and verifying such execution, and this regardless of whether such possibility had been envisaged in the corresponding regulatory bases. For this purpose, it is sufficient for the competent body to justify the impossibility of carrying out the subsidised activity while the state of alert is in force, as well as the inadequacy of the time remaining after its completion for carrying out the subsidised activity or its justification or verification. The possibility of amending, at the request of the beneficiary and under the same conditions as above, resolutions and agreements for the direct award of grants is also provided for.

The adoption of these amendments is not affected by the suspension of deadlines and administrative procedures provided for in the third additional provision of Royal Decree 463/2020.

Measures regarding administrative deadlines 

The calculation of the time periods for lodging appeals in administrative proceedings or for initiating any other procedure of challenge, claim, conciliation, mediation and arbitration that replace them in accordance with the provisions of the Law, in procedures that may have unfavourable effects or a burden on the interested parties, will be made from the working day following the date of completion of the declaration of the state of alarm and this regardless of the time that has elapsed since the notification of the administrative action that is the object of the appeal or challenge prior to the declaration of the state of alarm. In other words, the calculation of this period is restarted (not resumed). The above is without prejudice to the effectiveness and enforceability of the administrative act being appealed against or contested.

Measures regarding public procurement

Article 34 Royal Decree Law 8/2020 is amended, with effect from its entry into force. The main amendments are as follows:

- Possibility of partial suspension of public service and supply of successive services contracts: contracts of this nature concluded by public sector entities may be suspended not only totally but also partially in the event that their execution proves impossible as a result of COVID-19 or the measures adopted by public administrations to combat it. In the event of partial suspension, the compensation to be paid to the contractor must be limited to the suspended part of the contract

- Possibility of extending works contracts: In those contracts where the end of their execution period is foreseen between the beginning of the state of alarm (14 March) and their completion and as a consequence of the de facto situation created by COVID-19 or the measures adopted by the State the delivery of the works cannot take place, the contractor may request an extension of the final delivery period as long as he offers to comply with his outstanding commitments if the initial deadline is extended.

- It clarifies what is meant by public contracts for the purposes of Article 34 of Royal Decree-Law 8/2020 (all those which, in accordance with their specifications and regardless of their administrative or private nature, are subject to Law 9/2017, Royal Legislative Decree 3/2011, Law 31/2007, Book I of Royal Decree-Law 3/2020 or Law 24/2011).

Measures regarding electricity generation 

The eighth transitional provision of Law 24/2013, of 26 December, on the Electricity Sector, states that the permissions for access and connection to the electricity networks granted before the entry into force of said law will expire if, prior to 31 March 2020, the operating authorisation for the generation facility associated with them has not been obtained. Although this expiry period was to be understood as suspended in accordance with the provisions of Royal Decree 463/2020, an additional period of validity of these permits of two months from the end of the state of alert was granted in order to provide legal certainty to both the promoters of electricity generation projects who own these permissions and the managers of the corresponding transmission and distribution networks.

Madrid

Almagro, 16-18
Madrid 28010
T: (+34) 91 576 19 00

Barcelona

Avenida Diagonal 615, 8ª planta.
08028
T (+34) 93 494 74 82