Changes related to the rent regulation continue

By 20/03/2019

New Royal Decree of 7/2019 of March 1 on urgent measures regarding housing and rent.

In the last Diary of Change I talked about the rent issue and the continued legislative changes, not enough studied before its aplication and so causing legal uncertainty. There have been only two months since the last change that there were more again.  The Government of Spain has approved new measures that have already entered into force and, therefore, affect us:

  • We recover the possibility that sumptuary dwellings (more than 300 m2 or in which the initial annual rent is higher than 5.5 times the minimum interprofessional salary) are governed first by the will of the parties and the Act is supplementary , as had been done since 1995 and until amendment that suppressed it in 2013
  • The duration of the contracts is extended from 3 to 5 years, and to 7 years if the lessor is a legal entity.
  • The legal renewal is extended to 3 years.
  • The costs of real estate management and formalization of the contract will be borne by the lessor, when the latter is a legal entity.
  • Are definitively excluded from the L.A.U. leases for tourist use in all cases.
  • ITP exemption from lease agreements: tenants will no longer have to pay ITP, but owners will have to continue presenting the ITP equally (mod 600) without having to pay a fee.
  • Additional Guarantees: a maximum of two monthly installments is established.

After a few days, Law 5/19 of March 5 on urgent measures to improve access to housing by the Government of Catalonia was approved, with the following objectives:

  • Deal with the housing deficit of public rental protection
  • To have more resources to combat emergency situations and evictions
  • And encourage a moderation of rental prices for free dwellings
  • Measures that affects the most clients-owners is as follows:
  • Rental contracts will have to include the Reference Index
  • It will be mandatory to include in the advertising and in the contracts of the Reference Index of the Rental Price, which informs about the average rental price of a house with similar characteristics in the same urban environment.
  • Only the lessors of the rented dwellings with incomes lower than this index will be able to benefit from the public aids aimed at the promotion of rent.

It is a measure that, in our opinion, is interesting to the effect that there is transparency in a sector that has been opaque and we understand that it can help the tenants to know how this market moves. Our company has actively collaborated to verify that the data is in line with the market and we can attest that this is true, but it will be necessary for everyone to take seriously the obligation to inform it in advertisements and contracts.

The Generalitat has made a great effort to achieve it. The Government of Spain want to have it in a very short time. We see it difficult, since there is a basic premise, which is to have the culture of entering the performance bonds.

More actions related to rental. The Department of Territory and Sustainability has also legislated a few days ago in relation to the housing of public protection in order to promote that it really fulfills its objective.

If to all the explained we add declarations and more statements of different Ministries on the housing subject, we will realize of the importance that the subject has for the society. For that reason we demand well studied measures where all the stakeholders involved could give their professional point of view as well as to have a continuity over time in order to offer security to all the stakeholders in a vital sector for society and economy.

Immaculada Amat

Amat Immobiliaris President