Friday, March 02, 2018
Legal
GOODBYE TO THE FIVE-YEAR RENTAL AGREEMENTS
Each time the rental contracts are shorter in time. And not because the real estate agents or the property owners themselves fix it. On June 5, 2013, Law 4/2013 came into force, which approved new measures aimed at making the housing rental market more flexible. One of these was the so-called Urban Rental Law (LAU), which reduced the mandatory duration of rental contracts: they went from five years to three years and reduced the extension from three to one. Have you already reviewed your rental agreement?To understand this Solomonic decision carried out by the Ministry of Development, we must take into account one figure: the rental market in Europe is around 30%. Yes, there are still more European neighbors who buy flats but few buy more than we do since the rental rate in Spain is only 17%. How to encourage the rental of houses? Modify a set of precepts of the Urban Leasing Law 29/1994 under the preamble of "invigorating a rental market in Spain".This means that if you rented a flat in 2013 or earlier, the renovation of your rental apartment could be modified to three years and not five, as before. And of course, the owner of the same is perfectly capable to raise the price of the rent. Something happens in full 2018, when they begin to finalize the last rental contracts in force for five years and is that the rental price is at historic highs. For example, the two major Spanish capitals Barcelona and Madrid have reached record highs in the rental price, at 17.5 euros / m2 and 15.5 euros / m2 respectively at the end of 2017, according to the latest price report.But this is not only a matter of these two metropolises. Seville, Malaga, Zaragoza, Bilbao ... any apartment for rent has increased its value considerably in recent months, with the rent increase being much higher than the rise in house prices. Another example, Valencia. Until recently you could rent a central apartment in the capital of the Turia for about 400/500 euros. Currently, the amount rarely falls below 600, yes, if you do not choose trendy neighborhoods where rental prices skyrocket.

CAN THE OWNER RAISE THE PRICE AND ADAPT IT TO THE CURRENT MARKET PRICE?

This is the great concern of thousands of people currently living in rent. For this to happen, the owner must notify the tenant with one month prior to the expiration of the contract as it is legislated in article 10 of the LAU. This notice must be made by means of an official communication and in the case that the termination is not notified, the contract will be renewed automatically.If this happens, the landlord can sign a new contract with the new conditions but if this resolution is not communicated, the tenant can refuse any rent increase and will be entitled to stay in the house for three more years thanks to this renovation tacit suffering only a minimum increase for the update of the income according to the CPI.

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