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Challenges for the real estate sector in times of Coronavirus: Episode III

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A good real estate agent knows that signing the Public Title Deeds at the Notary doesn't mark the end of the sales-purchase process. A good real estate agent on the Costa Blanca knows that in a region where a large number of buyers do not live permanently in the place where they buy their property, the after-sale service is vitally important.

By that, we mean:

  • Organising the move 
  • Getting connected to utilities (mains electricity, water, and gas)
  • Filing Taxes
  • Registering the property at the Property Registry 
  • Contacting renovation companies, decoration and interior design...

What about the clients who have been enjoying the marvellous new villa we sold them for some time now, but due to the coronavirus are struggling to keep up with their payments? What about the clients who rent out their property and don't know how to manage their tenants during the current State of Alarm?

Yes, you need to provide them with a good service, too. By advising them from start to end, you'll ensure that they rely on you if they come to make a further investment in the future, and will also recommend your services to their friends and relatives. 

In this article, we're going to try to solve two of the issues currently causing property owners the most doubts.

What if my property is rented out? 

It will all depend on the type of rental the property is used for: 

Holiday rentals 

What happens if my property had been booked but the guests can't use it because we're under a State of Alarm? Do I have to give them their money back?

Each different holiday rental platform has its own specific cancellation conditions. Keep in mind that the current situation is a case of force majeure, so we recommend you try to be flexible. Here are the decisions each platform has reached to deal with the situation: 

Traditional rentals

Do I have to suspend rental payments if my tenants have trouble paying? What does the law say?

On the 31st of March, the Spanish Central Government established a series of measures regarding how rentals must be managed during the State of Alarm. The following are among the main measures:

  • Evictions are suspended for six months following the effective date of the State of Alarm.  
  • Rental contracts that end within three months of the effective date of the Royal Decree of urgent measures approved on the 17th of March will be renewed automatically.
  • A moratorium on rental payments is established for tenants in vulnerable situations when the landlord owns more than 10 properties. 

Even if you're not a landlord who owns more than 10 properties, keep the current situation in mind. If your tenant is in a vulnerable situation and you can afford it, we suggest you try to re-negotiate the rental payments with them. 

What if I can't pay my mortgage? 

The Royal Decree the Government approved on the 17th of March established a moratorium on mortgage repayments for people in vulnerable situations: those who are unemployed, have been affected by an ERTE (temporary employment regulation) or whose income has been drastically reduced as a consequence of Covid-19.

On the 31st of March, this suspension was upped from one to three months and extended to also include non-mortgage loans.

However, the moratorium can only be applied to the main residence.

 

* Despite the fact that the regulations can change a lot during the State of Alarm, as a good real estate agent you should try to stay up-to-date with all the changes to enable you to pass the information on to your clients.

To help you provide them with the advice they need, even during confinement, we suggest you download the following guide which contains practical advice on how to purchase property on the Costa Blanca in a safe manner. 

 

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Modern House , 7 April 2020

Tags: holiday rentals, Costa Blanca mortgages, Costa Blanca holiday rentals, holiday homes on the Costa Blanca, real estate agent on the Costa Blanca, tourist rentals

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