The landlord cannot update the rent by 5% and other major confusions regarding rental housing

There is increasing confusion about what can and cannot be done with rental housing.

Tenants and owners are lost in this market in which misinformation and roguery intermingle.

The mess has reached maximum levels after the Ministry of Housing presented, on February 27, the state price reference system, which sets limits on rent in Spain.

A tenant asks on a social network: “Do you know how much my landlord can raise my rent?

I have to renew in April.”

Another questions in a forum whether the owner can raise the CPI for 2022 and 2023 all at once. Meanwhile, the owner of an apartment assures that the real estate agency encourages him to make a new contract for his tenants and increase the rent before is affected by the Government's price index.

These are the most frequently asked questions from landlords and tenants related to prices, updates, renewals, deadlines and communications.

What information should I use to update the income each year?

In existing contracts there is a maximum limit of 3% during 2024. However, the February CPI was placed below, at 2.8%.

The law does not require the application of 3%, but requires that it not be higher than that percentage, the Ministry of Housing explains.

In this way, if the annual review of the contract is due, the tenant can ask the landlord to take the February CPI as a reference.

When updating the rent, the agreement between the parties always prevails.

Now, in order to apply this increase, the landlord must notify the tenant, in writing, one month before the date on which each year of the contract expires.

Otherwise, “you cannot update the rent and it is something that neither party usually knows about,” says Emilio Rojas, a lawyer specialized in rentals.

And of course, you cannot do something that a tenant asked in a housing forum: —My landlord intends to raise my rent by adding the CPI of 2022 (2%) and that of 2023 (3%), that is, 5% of bang.

And be careful, because if the contract does not include a clause stating that there will be an update of the rent, it cannot be applied during the duration of the rental.

If what has not been specified is the data with which the income is going to be reviewed, then the competitiveness guarantee index (CGI) must be used.

Next year will the 3% limit continue to be applied to update the income?

The housing law provides that before December 31, 2024, the INE will prepare a specific index that serves as a limit for annual reviews.

Afterwards, the Urban Leasing Law (LAU) must be modified.

The new index will be applied to contracts signed from that moment on.

Does the price index approved by the Government affect me?

The new price index will be applied on March 13 in 140 municipalities in Catalonia.

In the rest of Spain it does not currently apply, since it is the autonomous communities that must declare the stressed areas and no one else has done so.

If the owner of the apartment is an individual, he is not obliged to adhere to this system, even if the property is within a stressed area.

But he does have limitations: if he renews the contract or signs a new one with another tenant, he must maintain the last rent that he applied with the corresponding update.

There is another option and it is to take advantage of one of the assumptions that allow raising the rent by 10%: rehabilitation or accessibility works under the established conditions or signing a long-term contract with your tenant (more than 10 years).

What if my landlord is a company or a large holder?

In this case, the income does have to be below the maximum of the price range established by the reference index.

I live for rent, my five-year contract is ending and I want to renew it.

Under what conditions can I do it and how much can the landlord raise the price?

The duration of the rental contract is five years if it is rented to an individual (seven if it is a company).

Afterwards, if neither party expresses its intention to terminate it, the contract is extended annually for three more years.

On the other hand, “if the landlord does not want to extend the rent, he must notify the tenant four months in advance.

It is something that both are usually unaware of,” says Rojas.

Be careful because if he does it within one or two months it is not worth it;

he will be forced to keep the contract for three more years.

And he will only be able to apply the income update.

No more rise.

If the owner does it right and gives notice before the four-month period, the contract expires and he can look for a new tenant.

If the apartment is not in a stressed area, you can increase the rent as much as you consider.

However, "the tenant can use the price index as a reference to negotiate and the owner can help to have a reference of what prices the homes in their immediate surroundings are being rented for," indicate sources from the Ministry of Housing.

I am an owner and I plan to raise the price before my area is declared a stressed area.

With a current rental it is not possible.

It will only be feasible when the contract ends and a new one is signed.

In the latter case, the landlord is free to apply the increases he deems, as long as it has not yet been declared a stressed area.

Does the index or contract freeze apply to temporary contracts

?

Seasonal contracts, regardless of their duration, are not for habitual residence, that is, a house is rented for a certain time, for example, for an academic year, for a job... For this reason, no limitation applies , even if the home is in a stressed area.

However, the Ministry of Housing is already working to regulate this type of contracts and ensure that they are limited to their specific case.

Is it legal to collect rent on the one hand and “other expenses” on the other to exceed the limit set by the Government?

In a home that has already had a previous contract (in the last five years) in an area declared to have a stressed residential market, the conditions of the previous contract cannot be modified.

If it is a home that is added to the market, the rent will be limited to the reference price index system.

The chargeable expenses are subject to the agreement between the parties.

My landlord alleges need to recover the home.

Can?

“We see these cases every day,” says lawyer Rojas.

It is a violation of the law if the owner cannot comply with several conditions: he has passed the first year of the contract, give two months' notice and justify the cause of necessity.

“The problem is usually resolved by negotiating with the opposing attorney because these trials are long.

We have resolved 100 cases and none through judicial means,” he adds.

The real estate agencies continue to charge the tenant for the agency month.

How can it be avoided?

Complaining in the courts or in the Consumer Services of the autonomous community.

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