June 14, 2021

Thousands of tenants, on the verge of default




The liquidity problems of thousands of tenants (families, students, …) worsen as the economic crisis takes shape. The Covid-19 is becoming a true stress test for the rental market in Spain. The Association of Home Owners for Rent (Asval) alerted this week that during the confinement (March-May) delinquencies have tripled from 5 to 15% and, according to its general director Beatriz Toribio, “we fear that the situation lengthens if ERTEs become ERE (Records of Employment Regulation) and economic forecasts are met ». He warns: “It cannot be that the owners are the only ones who carry the backpack left by the pandemic crisis.” Your bet is «Look for solutions for both parties and that the tenants can continue to access the house ». In addition to reducing delinquencies and the collapse of Justice.

For this, explains Toribio, from Asval they propose “a package of direct aid of 750 million euros for 350,000 families (which would be about 2,000 euros per year), who dedicate more than 48% of their income to paying the rent, when the effort recommended by experts is 30% ». An amount that, the Asval spokesperson, believes could come from the European funds that Spain will receive from Europe:140 billion euros in the next six years.

For the director of Studies of Pisos.com, Ferran Font, we are “in a critical situation, which requires exceptional actions” and he mentions the sharp drop in GDP in the second quarter (22.1% year-on-year, the worst figure since there are records, according to the INE). For this reason, he sees it necessary that “there be aid regardless of what the owners and tenants do”, and he bets on directly supporting the second «In situations of risk of exclusion», although in a “very limited time” way. The objective: to avoid uncontrolled delinquencies and a multiplication of judicial processes.

In this regard, an important fact points out: before the eviction moratorium, approved in the heat of the state of alarm and extended until the end of September. “The main reason or origin of the evictions was rental agreements.” Specifically, based on statistics from the General Council of the Judiciary (CGPJ), in 2019 a total of 54,006 judicial resolutions (or “launches”) were executed, depriving a person of property ownership. Of these, 14,193 had their origin in the non-payment of a mortgage for 36,467 whose cause would be in the dissatisfaction of a rent (Law of Urban Leases). The remaining 3,346 would have other reasons. For its part, the Union of Tenants, proposes other recipes that it has reflected in the proposal of Law whose processing is paralyzed in the Catalan Parliament and that, among other provisions, provides for the obligation to freeze or lower the prices of new rental contracts of Catalan populations with more than 20,000 inhabitants.


The Government extended on July 7 measures taken during the state of alarm such as the suspension of evictions until October 2 and ICOal rental loans. Regarding this type of help, the lawyer for Legálitas Tomás de Felipe, highlights that “in reality they have only been working for two or three weeks” and are subject to the “situation of vulnerability” (ERTE, unemployment, cessation of activity …) of the tenant has been produced as a consequence of the Covid-19. “These are zero-interest loans, payable from 6 to 10 years, which allow up to six monthly payments,” says this lawyer. Toribio (Asval) highlights that after doing a study on 30,000 homes, only 1.3% were interested in these loans. For Font (Pisos.com) the reason could be in the fear of entering a “Debt spiral”. .

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