A judge lowers the rent to a tourist apartment company due to COVID-19

Several people on a street in Barcelona.
EFE

A judge in Barcelona has cut the rent of 27 properties to a company that rented tourist apartments in the Catalan capital and whose income has plummeted due to the pandemic consider “fair and equitable” let the lessor, a large holder, bear part of the losses.

In her sentence, the magistrate of the Court of First Instance number 20 of Barcelona has decided reduce the rent of real estate from 1,200 to 600 euros plus VAT -26 floors and a local- paid by the merchant, Venpre SL, whose profits exceeded one million euros in 2019.

The judge has thus upheld the lawsuit that the company filed against the private landlord after months of frustrated negotiations and after propose a reduction in monthly income of the contracts, which total about 40,877 euros, due to the health emergency.

The decision to lower rents between April 1, 2020 and March 31, 2021, whose maintenance costs have been set at 8.81 euros per month, has been made based on the “rebus sic stantibus” clause, that allows modifying a contract in the face of an extraordinary change such as the coronavirus pandemic, and taking into account the “principle of equity” and the “good faith” of the company, which has not stopped paying the monthly payments.

“I consider that the modification proposed by the plaintiff is fair and equitable without the defendant in the negotiations having offered any other alternative beyond a moratorium on the payment of rent that (…) I consider that it is unfeasible to maintain the viability of the mercantile “, maintains the magistrate.

The car reflects so the COVID-19 by having reduced in a very high way the benefits that were rationally intended to obtain, which implies that the contract is excessively onerous for the tenant “, a circumstance for which the holder does not” blame “although it does order him to take responsibility.

“The landlord has not been harmed with respect to what he intended to obtain with these properties because he already had them rented, but, if he had not had them leased or if the contract had expired in March 2020, he would have also suffered damage by not finding tenants that they rented the 27 properties for tourist use and that they provided the rent that is agreed in the contract, “remarks the sentence.

The judge also recalls that he tourism until the pandemic ends, which can make it difficult “for rent to be paid in the fixed moratorium period” and underlines that if before COVID-19 Venpre used 53% of its income to pay rents, the forecast for the first quarter of 2021 is that the percentage will reach 151%.

The lawsuit dates back to last July, when the company, whose billing fell from April to June by 83%, requested to adapt the contracts to the new economic context, a request to which the landlord responded by offering a moratorium.

Subsequently, the company proposed to halve the rents, given the prospects of ending 2020 with more than 165,900 euros of losses, or to terminate the contracts without penalties, but the big holder again rejected this point, for which they came to court .

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