I WANT TO RENT A PROPERTY AT WHAT PRICE SHOULD I PUT IT IF I DO NOT WANT TO VIOLATE THE CATALAN RENT CONTAINMENT LAW?

by | May 4, 2021 | Blog

Since September 18, 2020, the price of rents in Catalonia has been limited with the aim of resolving the necessary assistance to families in a situation of economic and residential vulnerability following the 2008 crisis, aggravated because of COVID-19. However, the conflict between the right to property and the right to decent housing has increased and the poor drafting of Law 11/2020 has generated greater legal uncertainty. That is why from Figueras Legal we want to give you the keys in this article to know how to apply the limitation of rental prices.

What is the purpose of the Rent Containment Law?

Its main purpose is to moderate and contain the price of rent in certain areas where a tense housing market has been declared. That is, in areas where accessibility to housing at an affordable price cannot be guaranteed for the entire population.

Will any type of rental be affected by the Rent Containment Law?

No, the limitation of rental prices will only apply in the case of a residential rental and both circumstances concur:

(a) That the leased dwelling is intended for the permanent residence of the lessee.

  1. b) That the leased dwelling is in an area that has been declared an area with a tight housing market.

This Law will also not apply to contracts prior to 1995, nor to special contracts for social rental, subsidized housing or similar.

From when does the rent containment obligation apply?

Rent containment applies as of the following dates:

(a) September 22, 2020 in general.

  1. b) September 22, 2023 for newly built homes or homes resulting from a major renovation process.

What happens to contracts in force before September 22, 2020?

Contracts in force prior to the entry into force of this Law containing the rents will continue to be governed by the previous applicable regulations, except if the parties agree to extend the term of the contract or modify the amount of the rent.

For how long can the rent be capped?

At the latest until September 29, 2025.

Which areas are currently declared as having a tight housing market?

At the moment, the municipalities declared as tense housing market areas are: Badalona, Barberà del Vallès, Barcelona, Blanes, Calafell, Castellar del Vallés, Castelldefels, Cerdanyola del Vallès, Cornellà de Llobregat, Esplugues de Llobregat, Figueres, Gavà , Girona, Granollers, Hospitalet de Llobregat, Igualada, Lleida, Manlleu, Manresa, Martorell, El Masnou, Mataró, Molins de Rei, Mollet del Vallés, Montcada i Reixac, Montgat, Olesa de Montserrat, Olot, Palafrugell, Pallejà, Pineda, El Prat de Llobregat, Premià de Mar, Reus, Ripollet, Rubí, Sabadell, Salou, Salt, Sant Adrià de Besos, San Andrés de la Barca, Sant Boi de Llobregat, Sant Cugat del Vallès, Sant Feliu de Guíxols, San Feliu de Llobregat, Sant Joan Despí, Sant Just Desvern, Sant Pere de Ribes, Sant Vicenç dels Horts, Santa Coloma de Gramenet, Santa Perpètua de la Mogoda, Sitges, Tarragona, Terrassa, Tortosa, El Vendrell, Vic, Viladecans, Vilafranca del Penedès, Vilanova y la Geltrú and Vilassar de Mar.

In any case, it will be the competent Administration who will qualify certain areas of the territory as areas with a tense housing market.

What happens if my home is in an area considered as an area with a tense housing market?

  1. The reference price set by the official Rental Price Reference Index cannot be exceeded.

On the following website, http://agenciahabitatge.gencat.cat/indexdelloguer/ the three reference prices per square meter are defined: the lower area, the middle index and the upper area.

To calculate the index price, you will need: the complete address of the property, the useful area, the emission value of the energy certification, the year of construction of the property, specify the condition of the property and indicate whether it has a parking space, elevator or is furnished.

As a rule, the price of the average index will be taken as a basis, and in some renovations, the price / m² may be taken as the price / m² of the higher area. In the case of new construction and major renovations of the entire property, the rental price may be freely agreed upon.

Once the price per m² of the index has been obtained, it will be multiplied by the usable area of the dwelling. This will be the maximum rent according to the reference index.

  1. b) If the dwelling has been rented in the last 5 years, the maximum rental price will always be the lowest of the following prices:

– The price of the previous contract updated with the competitiveness guarantee index that can be consulted in the following Link:

https://www.ine.es/ss/Satellite?c=Page&cid=1259947704944&pagename=ProductosYServicios%2FPYSLayout&L=0&p=1254735893337

  • Or, the reference price set by the official Rental Price Reference Index explained in the previous section.

Can the amount of the rent be increased in any way?

Yes, the Law contemplates that the amount resulting from the Rental Price Reference Index can be increased by 5% for those properties that have at least three of the following characteristics: furnished, parking, heating and cooling system, common areas for shared use, swimming pool or similar facilities, concierge service or special views.

On the other hand, if the property has made an investment in the last year prior to the signing of the contract, in works for the improvement of the property, up to a maximum of 20% of the amount of the works may be charged.

IBI tax or community expenses may also be charged. The latter can only be passed on if they have already been passed on to the tenant in the previous contract and are of direct benefit to the tenant.

What happens if the owner is a vulnerable person according to the Indicator of Sufficiency Income of Catalonia?

In the event that the owner is considered a vulnerable person, i.e., has a gross income equal to or less than 2.5 IRSC adding the income received from the rent and the tenant has an income above 3.5 IRSC, the rent containment obligation would not apply, and the amount of the rent could be freely agreed.

Do I have to inform in the offer that the price is in accordance with the rent containment obligation?

Yes, it is necessary to inform of the application of the value that corresponds to the reference index of rental prices of housing and, if applicable, of the amount of the rent of the last lease in force in that same housing, duly updated.

What must be included in the contract?

New leases must always state the price/m² resulting from the index, attaching the document generated by the Catalan Housing Agency. If the rent is conditioned by the rent of the previous contract, the latter must also specify that it is updated with the price of the competitiveness guarantee index.

If the 5% increase is applied for special characteristics, these must be detailed in the contract. And in case the amount of IBI and / or community expenses are charged, all amounts must be itemized and at the end of the calendar year must be able to be credited to the tenant.

What happens if I fail to comply with the rent containment obligation?

The collection by the lessor of rents that exceed the limits that establish the obligation to contain the rents, entitles the lessee to obtain the restitution of the amounts paid in excess, with accrual of the legal interest of the money, increased by three points.

In addition, Law 18/2007 on the right to housing could be understood to have been infringed, and in its article 118, different amounts are established, ranging from 3,000 to 9,000 euros depending on the qualification of the sanction as serious or minor according to the following:

– Serious: that the fixed rent exceeds the fixed reference amount by more than 20%.

– Minor: that the fixed rent exceeds the fixed reference amount by up to 20%. As well as not providing the information stipulated in the lease advertising, not attaching to the contract, or not providing the tenant with a document on the reference index, or information regarding the date and amount of the rent of the previous contract, as well as falsifying or altering the information to the detriment of the tenant.

From Figueras Legal we hope you have found our article useful and if you need more information please contact us at info@figueras.legal or by phone at 93.419.38.45.