CAN I SUSPEND OR INTERRUPT THE RENTAL OF THE COMMERCIAL PREMISE DUE TO COVID-19?

The Royal Decree 463/2020, of the 14^th of March, declaring the state of alarm for the management of the health crisis situation caused by COVID-19, provides in its article 10.1 the suspension of the opening to the public of the retail premises and establishments, except for those destined for basic products and goods.

Despite the fact that this Decree does not provide anything regarding the possible suspension of contracts that are aimed at the development of activities in the buildings or premises affected by the measure, legally we can avail ourselves to two possibilities:

1.- One option would be due to the supervening impossibility of the provision of the lessor, applying for this and by analogy  the article  26 of the Law of Urban Leases (also applicable to the leases of premises according to the provisions of article 30). This rule grants the lessee the option of suspending the contract or withdrawing it, when works agreed by a competent authority that make it uninhabitable must be carried out in the leased premises. In this case, according to the norm, the suspension of the contract will mean the paralysis of the contract term and the suspension of the obligation to pay the rent.

2.- Another option would be to urge the modification of the lease in application of the “rebus sic stantibus” clause, in view of the totally unforeseeable alteration of the circumstances, derived from the declaration of the state of alarm. Thus, according to jurisprudential doctrine, although the Civil Code does not regulate a mechanism that expressly allows the content of obligations to be extinguished or modified based on unforeseeable changes, in accordance with the “rebus sic stantibus” clause, the alteration of circumstances may cause the modification or, ultimately, the termination of a contract. Now, it is necessary, as the Jurisprudential Doctrine has established, that the alteration of the circumstances must be of such magnitude that it significantly increases the risk of frustration of the purpose itself of the contract and that in addition, such supervening circumstances were totally unpredictable for the contracting parties.

Therefore, it is an absolutely necessary condition to apply the “rebus” rule to the unpredictability of this change of circumstances and it would not be worth applying it when the alteration is within the foreseeable risks taken into account between the parties, or when the damage has not been enough entity.

At Abogados MAR Consultores we are at your disposal working telematically or online, to disinterestedly clarify any questions you have regarding your rental or leasing contracts at this time of the Health Crisis.

Good luck and “stayathome”