The outbreak of the COVID-19 pandemic has brought great changes in all aspects of our lives. Such has been the impact, that it has even given rise to the so-called “covid clauses” in rental contracts.
Immersed in an exceptional pandemic situation, landlords and tenants had to agree to lower rents, monthly payments without payment obligation and forgiveness. Special attention deserves the case of a good part of the university students, who, forced to return to their places of origin, left their landlords without income and without the option of recovering their properties.
With the threat of outbreaks as a reality, new clauses are being included in contracts that provide a certain degree of coverage. And it is that, never before in the rental contracts have clauses associated with a possible pandemic been introduced.
The objective of these clauses is clear: trying to adapt to the circumstances of the pandemic, greater flexibility is sought between the landlord and the tenant. However, it should be noted that covid clauses are not widely used in rental contracts.
Do the covid clauses comply with the law?
Common or not, the introduction of COVID clauses in contracts generate a series of obligations that both the landlord and the tenant must comply with in the event of new outbreaks, application of a state of alarm or confinement orders of the population. In fact, if a breach of the contract ends in the courts, the courts will determine that the contract is fulfilled as long as it is in accordance with the law.
Surely many wonder if these types of clauses are legal. Well, the lawyers think so, since it respects the provisions of article 1255 of the Spanish Civil Code. In other words, these types of clauses are perfectly legal since they do not violate the law, nor do they violate morality or public order. At least, under the protection of Spanish law.
Furthermore, this responds to a need for landlords and tenants, who seek to regulate their relationships in the complex context of a pandemic. Both want to know what to expect and, for this, as an annex, these kinds of conditions are included in the contracts.
However, it should be noted that these types of clauses are not valid for all kinds of situations. Generally, they are usually applied for temporary rental contracts, such as the rental of an apartment to students or premises for some type of commercial activity. This means that these regulations will only be valid for students who must return home due to the state of alarm or for businessmen who must cease their activity due to the restrictions imposed by the authorities.
Thus, in the case of commercial premises, the courts are accepting this type of clause as valid, since they consider that the businessmen and the owners of the premises are in an equal position.
How should a covid clause be drafted?
A contract will be more complete the more specific it is, so all possible situations should be explained. Therefore, the introduction of a covid clause can be carried out at the request of the lessor or at the request of the tenant.
Thus, if the tenant agrees with the landlord, the rent may be rescinded in the event of a new state of alarm or if new confinements occur. The landlord can also choose to set an amount that he must receive in the event of a new state of alarm, since, in this way, he can prevent his tenant from becoming delinquent. And, there are contracts that include certain penalties for terminating the contract before the agreed date. We see, therefore, that the covid clause may vary depending on the interested party and that there is no single wording.
We emphasize once again that the covid clauses must be well determined, expressly indicating their effects and consent. In short, it seeks to make clear what the possible situations, penalties, ways to terminate the contract, cancellations and ways to recover the property may be. Thanks to these clauses, settlement mechanisms are established that will make it possible to avoid the resolution of problems through the courts.