Mortgage debt payment moratorium for the acquisition of a habitual residence during the health crisis caused by the COVID-19
We will analyse here in a very graphic way what the requirements are that have to be met to be able to benefit from this moratorium:
- Cases of application (Article 8):
Existence of a loan or credit guaranteed by a real estate mortgage for the acquisition of the habitual residence. The debtor must be in one of the cases of economic vulnerability established in the Royal Decree-Law.
The measures will also apply to the principal debtor’s guarantors and sureties, with respect to their habitual residence and under the same conditions as those established for the mortgage debtor.
2) What is meant by economic vulnerability for the purposes of the Royal Decree-Law?
Article 9 provides for different scenarios:
- That the mortgagor becomes unemployed or, in the case of a businessman or professional, suffers a substantial loss of income or a substantial drop in sales (understood to be when the drop is at least 40%).
- That the total
income of the members of the family unit (1 ) does not exceed, in
the month preceding the application for the moratorium, the
- In general, the limit of three times the monthly Public Indicator of Multiple Effects Income (hereinafter IPREM) (2)
- This limit will be increased by 0.1 times the IPREM for each dependent child in the household. The increase applicable per dependent child shall be 0.15 times the IPREM for each child in the case of a single parent household.
- This limit will be increased by 0.1 times the IPREM for each person over 65 years of age who is a member of the family unit.
- In the event that any of the members of the family unit is declared disabled for more than 33 percent, or has a situation of dependency or illness that makes him/her permanently unable to carry out a work activity, the limit provided for in sub-section i) shall be four times the IPREM, without prejudice to the accumulated increases per dependent child.
- In the event that the mortgagor is a person with cerebral palsy, with mental illness, or with intellectual disability, with a degree of recognised disability equal to or greater than 33 per cent, or a person with physical or sensory disability, with a degree of recognised disability equal to or greater than 65 per cent, as well as in the cases of serious illness that makes the person or his/her caregiver demonstrably incapable of carrying out a work activity, the limit provided for in sub- section i) shall be five times the IPREM.
- That the mortgage fee, plus basic expenses and supplies, is greater than or equal to 35 percent of the net income received by all members of the family unit.
- That, as a result of the health emergency, the family unit has suffered a significant alteration in its economic circumstances in terms of the effort required to access housing. This is understood to be the case when the effort represented by the mortgage burden on the family income has been multiplied by at least 1.3.
- The family unit is understood to be composed of the debtor, his or her spouse not legally separated or registered partner and the children, regardless of their age, residing in the dwelling, including those linked by a relationship of guardianship, custody or foster care and their spouse not legally separated or registered partner, residing in the dwelling.
- IPREM monthly 2020: 537.84 euros, three times the IPREM: 1,613.52 euros per month.
- How do you prove that the requirements are met?
Article 11 tells us what documents must be submitted to the creditor entity:
- In the case of legal unemployment, a certificate issued by the body managing the benefits, stating the monthly amount received as unemployment benefits or allowances.
- In the case of cessation of activity by self-employed persons, by means of a certificate issued by the State Tax Administration Agency or the competent body of the Autonomous Community, where appropriate, on the basis of the declaration of cessation of activity declared by the person concerned.
- Number of
people living in the dwelling:
- Family book or document certifying a domestic partnership.
- Certificate of registration of the persons registered in the dwelling, with reference to the moment of presentation of the supporting documents and the previous six months.
- Declaration of disability, dependence or permanent incapacity to work.
- Ownership of
- Simple note from the Land Registry index service for all members of the family unit.
- Deeds of sale of the property and the granting of the loan with mortgage guarantee.
- Declaration by the debtor or debtors that they have fulfilled the requirements for being considered without sufficient economic resources according to the Royal Decree Law.
4) Request and grant of the moratorium.
Debtors may request this moratorium from the creditor entity until fifteen days after the end of the validity of the decree law, accompanying it with the indicated documents.
Once requested, the creditor entity will proceed with its implementation within a maximum period of 15 days.
5) What are the effects of the moratorium?
The application for moratorium will lead to the suspension of the mortgage debt during the period stipulated for it (the norm does not establish duration) and the consequent non-application during the period of validity of the moratorium of the clause of early expiration that appears in the mortgage loan contract.
During the period of validity of the moratorium, the creditor entity will not be able to demand the payment of the mortgage quota, nor of any of the concepts that compose it (amortization of the capital or payment of interests), neither completely nor in a percentage. Neither will interest be accrued, either ordinary interest or interest on arrears.
6) What happens if the debtor improperly benefits from the moratorium without qualifying?
He shall be liable for any damages and expenses incurred as a result of the application of the relaxation measures, without prejudice to any other liability that the conduct of the debtor may give rise to.
The amount of damages and expenses may not be less than the benefit unduly obtained by the debtor from the application of the rule.
The Royal Decree-Law establishes that the debtor who voluntarily and deliberately seeks to place or maintain himself in situations of economic vulnerability in order to obtain the application of these measures will also be liable.