Thoughts on royal decree laws 11/2020 and 15/2020 in relation to leases

1) First of all, as regards the measures provided in Royal Decree-law 15/2020 relating to nonresidential leases, we find that it seeks to establish measures to “reduce the cost for small and medium-sized companies and the self-employed persons”, and when defining the small and medium-sized companies that may benefit from those measures it points out that it is necessary “that the limits established in article 257.1 [of the Capital Companies Law] are not exceeded”. That article 257.1 contains the requirements to be met by a company in order to be able to draw up an abridged balance sheet and abridged statement of changes in net worth, and specifies that in two consecutive fiscal years, as of the year-end date for each of them, at least two of the requirements set out in the same article (relating to the asset figure, the earnings figure for the fiscal year and the number of workers) must be met at that company.

In the light of this, the question arises whether, in order to benefit from the measures provided in Royal Decree-law 15/2020, all the requirements provided in that Article 257.1 must be met, or whether it is sufficient to satisfy with those requirements in the terms of the above-mentioned article itself, since the provision in the royal decree is simply a reference (for which reason it would be sufficient to comply with two out of three in two consecutive financial years).

2) Secondly, the question arises as to whether for the satisfaction of those requirements in order to have the status of a small or medium-sized company, and therefore, to benefit from the measures provided in Royal Decree-law 15/2020, it is sufficient for this to occur at the lessee company or what should be the effect of that lessee company’s possible membership of a group of companies under corporate and tax legislation and whether, in such cases, it is necessary to analyze the lessee’s position from a broader perspective which prevents it from claiming those measures as a mere special purpose vehicle.

3) Similarly, it must be considered whether lessor SPVs which per se do not have the status of a “large owner”, but which form part of a group of companies under corporate and tax legislation which does have such characteristics, can be regarded as a “large owner”, a concept that is referred to in both royal decrees (meaning any individual or legal entity that owns more than 10 pieces of urban real estate, excluding garages and storage facilities, or a floor area exceeding 1,500 m2).

4) Furthermore, it is necessary to consider the necessary observance of the requirements relating to the parties imposed by the royal decrees examined throughout the entire payment moratorium for rent (we will consider later the doubts also raised by such period), or whether it is sufficient to meet those requirements (vulnerable situation, suspension or reduction of business, etc.) at the time of original request for the moratorium, irrespective of the subsequent vicissitudes as regards the declaration of the state of emergency, vulnerable situation or business situation.

5) Finally, the question may be raised as to whether the royal decree laws examined constitute an absolute definition of the lessees that can seek a supervening temporary alteration of the provisions of their contracts, limited to the measures contained in those decree laws, or whether, on the other hand, the possibility remains open to lessees that do not meet the requirements provided in the royal decrees to seek a temporary modification of the terms of their contracts as a consequence of the application of the rebus sic stantibus principle and, if so, whether the application of that principle is in turn restricted to the application by analogy of the measures provided in the royal decrees to any other cases of “nonvulnerable” lessees. Furthermore, the question arises as to whether the lessees who effectively meet the requirements provided in the royal decrees can, under the aforementioned rebus sic stantibus principle and given the fact that those decree laws do not expressly forbid it, commence judicial proceedings aimed at the adoption of measures other than those ordered by law, such as the suspension of the contract, amendment or even termination.

1) First of all, the question may be raised as to whether the moratorium or grace period provided in the royal decrees apply strictly to leasehold rents (bearing in mind that the royal decrees specifically refer to “rent”) or whether sums usually referred to as “amounts equivalent to rents” (basically common expenses) should be considered to be included, and the that which this may have since such expenses are usually due to the lessor’s structural costs or expenses necessary to maintain the leased real estate.

2) Finally, the question may be raised as to how the maximum periods of application of the measures provided in the royal decrees should be calculated and, specifically, the reference to the fact that “under no circumstances” may they exceed four months, and whether that period refers exclusively to any months after the lifting of the state of emergency or whether the duration of the state of emergency itself should be deemed to be included in that period.