The legislation is designed to prevent housing becoming inaccessible in major cities On Wednesday 6th March, five days after it was approved by Cabinet, a new decree regulating residential property rentals came into force in Spain, containing important modifications to existing laws with the aim of protecting the interests and rights of tenants.
The main innovations contained in the decree are that all new rental contracts finalized after 6th March should be for a minimum period of five years rather than three (and seven years if the landlord is a company), and that rent increases during the contract must be limited to the inflation rate. These rules are designed to keep housing affordable, and come in the light of increasing concern over mushrooming rental prices in large cities and provincial capitals over the last couple of years, particularly in Madrid and Barcelona.
However, the measures fall short of actually stipulating limits for how much landlords can demand in rent, as had been proposed by the Unidos Podemos parliamentary group. Instead, what is proposed is a “price benchmark system”, which will be used to monitor the market will help to decide whether asking prices reflect the real state of the market.
These indices will identify average prices in all parts of the country, and the government has allowed eight months for the first ones to be produced.
Also of interest is that in cases of non-payment of the rent, any eviction proceedings must be notified to the social services so that they can be analysed to determine whether the tenant is at risk of social exclusion.
If this is found to be the case, the process will be delayed by a month (three if the owner is a business) to give the tenant more time to find alternative accommodation, and in addition judges are obliged to state the exact date and time for scheduled evictions.
In an attempt to legislate for the increasing impact of companies such as Airbnb in major cities, there are also stipulations which allow owners in apartment buildings to place limits on the use of properties for tourist accommodation.
Contracts signed before 6th March are subject to the 1994 Law of Urban Rentals and subsequent legislation, although they can be regulated by the new decree of both parties so wish. It ought to be pointed out that like all decrees passed by Cabinet, in theory this one is subject to ratification in parliament within a month.
But with parliament having been dissolved prior to the general election on 28th April, the ratification is now in the hands of the 60-strong permanent parliamentary committee, where it is believed that sufficient support exists to allow it to go through.
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Source: Murcia Today