Spain Extends Protection For Mortgage Debtors

The Spanish government has agreed to extend until 2020 the moratorium on evictions for those groups hardest hit by the crisis, make the criteria more flexible to benefit from protection measures and offer an option to rent their primary dwelling at a reduced price.

The Spanish Minister for Economic Affairs, Industry and Competition, Luis de Guindos, stressed that the Royal Decree approved last Friday with a moratorium on evictions is part of the measures the government has been adopting since 2012 to tackle this problem deriving from the economic crisis.

Luis de Guindos pointed out that, in March 2012, the government approved the Code of Good Practices, which offered those families on the “threshold of exclusion” the possibility of negotiating to restructure their debt with financial institutions, establishing a write-off or re-possession in lieu of payment. Almost all the banks signed up to this Code. He also pointed out that, in November 2012, it was agreed to suspend evictions, an agreement that still remains in force, and that, in January 2013, 10,000 properties at very low rental prices were made available to the most vulnerable groups.

The minister underlined that almost 80,000 families have been the beneficiaries of these initiatives. Specifically, more than 24,000 evictions have been suspended and 45,600 families have benefited from the Code of Good Practices, of which 38,500 have re-structured their debt and 7,000 have passed on title to their property in lieu of payment. The Social Housing Fund has also awarded more than 9,000 homes.

Luis de Guindos highlighted that the new legislation agreed on Friday extends the suspension on evictions for a further three years until 2020. It also makes the criteria more flexible for determining which mortgage debtors are more vulnerable and can thus benefit from the protection measures.

In this regard, those family units with minors will be considered more vulnerable, instead of minors up to the age of three, which was the situation to date, as well as single-parent families with one of more minors in their care. Other recipients include family units including one or more people in a personal situation of disability, long-term care, serious illness or a victim of gender-based violence. Furthermore, as regards evictions, the requirement of having used up unemployment benefits is removed.