The following is a summary of the new Law that regulates the containment and moderation of rents in housing lease contracts.
Last Monday 21, the Official Gazette of the Generalitat de Catalunya published Law 11/2020 of September 18, on urgent measures regarding rent containment in housing lease contracts and Modifying Law 18/2007, Law 24/2015 and Law 4/2016, relating to the protection of the right to housing, in force since Tuesday 22, with the exception of:
- a) Newly built homes
- b) Homes resulting from a major rehabilitation process.
For these two cases, the entry into force of this law will take effect 3 years later from its entry into force.
Following the announcement of the last Decree Law 17/2019, of December 23, on urgent measures to improve access to housing, which regulated the “large holders” of housing, the Royal Decree-Law 11/2020, of March 31, adopting urgent complementary social and economic measures to deal with COVID-19, as well as the subsequent Decree Law 15/2020, of April 21, on urgent measures to support the economy and employment, which regulated the enforceable moratoriums on the rental of homes and premises, the Parliament of Catalonia, regulates this new law, whose main purpose is to regulate rents from housing contracts that:
- They are going to constitute the habitual residence of the tenant
- That the property is located in an area declared to be “tense market”.
Area with tense housing market
As established in the law, a “tensive market area” will be considered those municipalities or part of them, where the sufficient provision of rental housing to the population to make it affordable is at risk. This will happen when any of the following situations occurs:
- a) That the rental price experience a sustained increase that is clearly higher than the average for the rest of Catalonia.
b) That the average cost burden of rent in the personal or family budget, exceeds 30% of household income, or the average income of people under 35 years of age.
c) That rental prices of housing have experienced, in the last five years before the declaration of the area as a “tense market”, a year-on-year growth of at least three percentage points , with respect to the CPI in Catalonia.
Transitory declaration of municipalities as a “tense market area” for housing
All those areas with a price increase of more than 20% between 2014 and 2019 (towns with +20,000 inhabitants) are provisionally declared.
The duration of the declaration is provisional (one year), after which, it will cease to have effects or a new declaration will be established by the municipality or competent body.
Competent bodies for the declaration of “Tense market area”
The competent bodies to determine a tense market area are:
- 1. Generalitat of Catalonia. Body competent in the matter (Agencia de l’habitatge de Catalunya)
2. Barcelona City Council.
3. Metropolitan area, through the Consell metropolitanà.
Determination of new income with the entry into force of the law
The rent agreed in the housing lease contracts, which must be held in areas declared to be “tense markets”, will be subject to the following conditions:
- a) The reference price published by the competent body may NOT be exceeded.
b) The last reference price stated in the last lease contract cannot be exceeded. , as long as the home had been rented for the last 5 years, before the entry into force of this law.
Reference index price
In order to determine the price of the reference index, published by the competent body, that is, the Agencia de l’habitatge de Catalunya, analogous properties are taken into account based on the data from the Registry of rental bonds of urban farms. The upper and lower areas are discriminated.
It will be necessary to attach to the contract, the published reference indexicated, as well as the study carried out on the date of signing or subscription of the lease.
In case of agreeing on a different income from that established in the reference index, due to the specific characteristics of the property, and by agreement expressly between the parties, increases or decreases in the amount of the rent may be established, with a maximum of 5%. Said modification must be accredited, being at least three of the following characteristics:
- a) Elevator
b) Parking
c) Furnished house
d) Heating or air conditioning system
e) Community areas for shared use such as gardens or terraces.< br />f) Community pool or similar facilities
g) Concierge service
h) Special views
In the event that the rent is conditioned by a previous rental (for 5 years), and it must be kept for the next contract, the landlord must responsibly inform the tenant in writing of the amount of the rent. The lessee, once the contract is signed, will have access, with the prior authorization of the owner, to the register of Bonds.
Homes of new construction or great rehabilitation
For 5 years from the certificate of completion of the work, the amount of the rent may NOT exceed the upper area of the reference index.
Reimbursement of amounts received in excess.
The lessee will be entitled to collect said amounts, plus the corresponding interest, increasing the legal interest by 3 percentage points.
Modifications of law 18/2007, of December 28, on the right to housing
Serious violations:
- a) Increase by 20% the maximum price established in this law by the landlord.
b) Hide the situation of the property in a “tense market” from the lessee or the price of the reference index< /li>
Minor infractions:
Do not report benchmark price or prior lease at:
- a. In rental offers or publications.
b. The lease.
Lease agreement in force at the entry into force of this law
For contracts in force at the entry into force of this law, it will not apply. They will be governed by the previous law. In case of novation of the conditions, which represent a modification of the duration or of the rent, it will apply.
