A wave of notable adjustments is reshaping the residential rental market, reflecting a publication from BOE No. 12/2023 dated 24 May on the Right to Housing. As stated on La Moncloa’s official site, the new provisions advance the right to decent housing enshrined in the Constitution. They aim to support groups facing the greatest barriers to housing through measures such as curbing rental prices and promoting public housing options.
Rental price increase
Among the most watched topics in rental markets is how rents move. The new law introduces several changes in this area. A central rule caps annual rent increases to the rate of the CPI. As noted in this article, lease adjustments are limited to a maximum of 2% through the end of the year. Leases that expired before June 30 were required to extend for another six months upon tenant request, unless the owner needed the property for personal use or for family members.
To foster transparency, clear criteria have been set for lease operations. For example, information sharing about security deposits between Administrations will be streamlined, and the national system of rental price reference indices will be improved. This makes the rental market more legible for both tenants and landlords, enabling more informed decisions.
Regions and autonomous communities may also create their own indexes to exercise authority in this area.
What changes are in store for tenants?
Several new features impact tenants directly. For instance, when selling a rented home, the buyer must honor the existing rental agreement, regardless of whether it is registered in the Property Registry.
Guarantees at signing are now restricted to two months’ rent. Previously there was no cap, which could invite aggressive practices, so this limit helps guard against abuse.
Additionally, if a lease is with a legal entity, the landlord will cover certain property management and formalization costs, and initial signing expenses may be reduced.
Landlords: new rights
The changes aren’t all about tenants. Landlords also gain practical improvements. If a tenant breaches the contract, the owner may pursue remedies through an oral trial. The Ministry’s website notes that claims for amounts up to 6,000 euros can be addressed with a faster and less costly process than traditional proceedings.
Improvements and upkeep are encouraged. If both parties agree, renovations can be undertaken in exchange for a rent increase, provided these works exceed basic mandatory conservation duties.
Regarding tourist rentals, communities with owner-occupied housing will retain greater control. With the consent of at least three fifths of owners, tourist rentals can be limited or conditioned, potentially increasing common expenses by up to 20%.
Significant changes to deadlines
The new law introduces timing adjustments that align with recent regulations. The Ministry of Transport, Mobility and Urban Agenda provides the latest housing rental information on its site.
- The mandatory extension period rises from 3 years to 5 years, and if the landlord is a legal entity, the period can reach 7 years. During this period, homeowners may reclaim the home for themselves or family members only if the contract specifies this at signing.
- The extension can be implied for 1 to 3 years in certain conditions.
- For tenants considering leaving, notice periods have shifted. Tenants now have two months to inform the landlord, while landlords must provide four months’ notice.
Readers seeking a deeper dive into the New Housing Law can explore the frequently asked questions and review information about rental assistance from autonomous communities through the linked resources below.