Stay of grace on mortgages, utility bills and loan repayments extended to September 30

An extension on the stay of grace announced at the beginning of lockdown, back in March, has been granted, to give laid-off employees and recently-reopened companies a chance to get back on their feet, as well as some breathing space for those affected by localised second outbreaks of Covid-19.

Water, electricity and gas providers are banned from stopping supplies where bills are unpaid – already, they are not permitted to do this without considerable warning and several reminders, or without contacting social services to see whether the consumer is a registered user – at any time up to and including September 30.

This only applies to utility bills unpaid for a main residence, not for a holiday home or second or subsequent property which is left empty or between tenants.

Also, anyone who needs to request a mortgage 'payment holiday' due to reduced earnings as a result of the pandemic now has until September 29, and can do so for a maximum of three months.

These three months can then be extended by up to another nine if the bank agrees, although the interest amount on the mortgage will still be payable – just not the capital.

In the next few days, the period where a tenant is allowed to request an 'extraordinary renewal or extension' to a rental agreement, subject to the same conditions as those enjoyed prior to this extension, of up to six months, will also be stretched out until September 30.

This applies only to rented properties where neither the occupant nor the landlord has given notice of termination of the tenancy agreement within four months of its expiry date.

Where the landlord is a large corporation, a public-sector company, or where the property is one of multiple residences let out by a professional landlord, tenants can request, up to September 30, a deferment or exemption from rental payments.

Tenants do not have the automatic right to request a reduction, exemption, or payment holiday where the landlord is an individual with only one or two properties let out, and Spain's government is not willing to enforce a moratorium on rent collection, since a rented property may be the owner's main home which he or she is absent from for a period of time, or a family holiday home, and in these cases, there may be a mortgage that the tenant's payments covers, or the owner may need this money as part of his or her monthly income.

This said, a number of private landlords who do not have a mortgage on their let properties and would not be left strapped if they lost their rental income have been agreeing for tenants to defer payment, or not to pay at all, during the pandemic – although this has been a voluntary arrangement.

Consumer credits, such as personal loans or finance directly offered by providers of goods or services – like hire purchase – can also be shelved for up to three months if requested by the payer before September 30, where he or she has been financially affected by the pandemic.

During this period, the finance company cannot demand payment, effect embargoes or take any other reinforcement measures against the consumer.

Government deputy president Pablo Iglesias calls this 'an unprecedented social shield' which has 'never been seen before in the history of the country'.

“We've constructed a social shield which, almost certainly, has room for improvement, and which is, almost certainly, limited in its application, but we have not forgotten what regular household expenses and utility bills mean to those families who were having a really tough time already and who, as a result of the Covid-19, are having an even worse one now,” Iglesias said.

He strongly criticised 'political thinking' – largely coming from the far right – which 'blames' those families who are struggling financially for 'not having worked harder' or 'made more effort' to 'help themselves'.

“Unfortunately, we still, even these days, have to listen to this type of political view,” he said.