The Basque Government approves public insurance for tenants

On Tuesday, the Basque Government approved in the Governing Council the Alokaplus programme, a free public insurance scheme for homeowners (with a maximum of five dwellings) who rent housing in municipalities designated as a strained housing market.

With this programme, the Government seeks to facilitate the marketing of some 25,000 empty housing units in these areas, providing protection against those who refuse to pay their rent, outstanding supply bills and damage attributable to the tenant, which is part of initiatives aimed at moderating price increases and increasing the supply of affordable rent.

"Alokaplus is born to unlock housing where it is needed," said Housing Counselor Denis Itxaso, who said some of the empty properties are not rented because their owners fear not receiving rent or damage.

"It is the duty of public policy to dismantle these problems, to provide guarantees and to make blocked housing available," said the counsellor, who stressed that the aim is to mobilize housing "subject to public guarantees, free and reasonable prices" so that the safety of owners does not become a cost or an obstacle to those seeking rent.

Defaults

The general coverage shall not exceed 14 months of unpaid leave, which may be extended to 20 months if the tenant is 35 years of age or younger, is over 65 years of age, is part of a single-parent family, is part of a living unit with dependent minors or is a person with functional or psychological diversity.

The insurance shall also include the provisions to be paid by the owner and the damages caused by the tenant's liability or negligence.

Who can hold on?

In the event of non-payment of rent, insurance shall be put in place at the time when the court admits the application for avoidance of contract and recovery of housing. The amounts covered shall be subject to the limits laid down in the agreed income and reference regulations, which, if not applicable, shall be taken as a reference 95% of the average monthly income of the municipality, according to the available statistics of the free rental market.

Alokaplus shall be intended for natural persons who own a maximumof five dwellings  which, in order to have their habitual residence, shall be used for rent and shall be located in municipalities designated as areas of high tension. The programme may be included both in new contracts and in existing leases, provided that the requirements are met and the income limits are respected. In order to do so, a commitment document shall be signed between the lessor and the tenant, and the corresponding annex to the contract must be registered prior to the filing of the non-payment claim.

The application for assistance may be processed in two ways: when the owner has recovered the dwelling or before; in the first case, the owner shall have a period of three months from the date on which he or she proves that he or she has recovered ownership of the property, and shall submit the application together with all the documentation required by the Order.

In the second option, such an application may be made within the first six months of the filing of the complaint, and the owner may subsequently apply for an extension within three months of the recovery of the property, up to the appropriate limit of 14 or 20 months.

The tenant's debt is not erased.

The insurance will not eliminate the tenant's debts. When the Basque Government pays the landlord the corresponding amounts, the Administration will require the tenant to repay them in accordance with the applicable regulations. "We do not eliminate debts and do not make them a definitive burden on the Administration," Itxaso said. "We give security to the property, but we maintain the liability of the landlord."