How are the new rental contracts?
Are you about to sign a rental agreement? Ten you should have a look at how it should be according to the latest rental reform from the 1st of March. Te Law of Urban Leases has been modified by Royal Decree-Law 7/2019, of March 1st, on urgent measures regarding housing and rent, published in the BOE on 5/03/19. Te main modifications are as follows:
CONTRACTS FROM THREE TO FIVE YEARS: One of the most important changes affects the duration of contracts. Te mandatory extension of rental contracts is extended from three to five years, when the lessor is a natural person. When the lessor is a legal entity, the duration of the rentals increases from five to seven years. When it comes to tacit renewal, this will increase from one to three years in both cases. Once the expiration date of the contract, or any of its extensions has arrived, and once the mandatory extension period has elapsed, if there´s no communication from any of the parties expressing the will to not renew at least four months in advance before the completion of the five or seven years for the lessor, and two months in advance in case of the tenant, the contract will be extended annually for another three years, which gives the tenant greater stability as he will no longer be exposed to the annual extension established in 2013.
THE ANNUAL RENT INCREASE, BASED ON THE CONSUMER PRICE INDEX (CPI): this is one of the main novelties of the new document. All contracts signed as of 2nd of March will be subject to the CPI for its annual update.
Tis means that in this way, the law went back as it was in 1994, although in this case, the CPI will not be mandatory as it was then and will only operate as a ceiling. In the contracts that are signed from tomorrow, no lessor can raise his rent more than the CPI during the five years that the contract lasts. He should wait for the renovation of the contract to raise the price.
GREATER NOTICE TO BREAK THE CONTRACT: the notice period for one of the two parties to break the rental contract has been extended. Te landlord must inform the tenant four months in advance, while the tenant must notify the lessor with two months. Until now, this period was set in a month. Deposit is limited to one monthly payment: this point does not undergo modifications with respect to the previous royal decree. However, the landlord may require an additional guarantee to the tenant of up to two monthly payments maximum. Tis means that, in total, the future tenant could have to pay up to three monthly payments to be able to access a rent. For example, for a rent of 700 euros, we would be talking about 2.100€.
NEIGHBORS CAN PROHIBIT TOURISTIC RENTAL: a matter of great importance where the approved norm deals with, is the modification of the Law of Horizontal Property through which the community of owners can adopt agreements by the majority of 3/5 of the owners, to limit or condition the exercise of the activity the houses of tourist use (until now unanimity was needed).
WHAT HAPPENS IF THE TENANT DIES: In cases where the death of the tenant occurs, family members may remain in the rented property when it comes to cases of social vulnerability. “Te waiver of subrogation cannot be agreed in the cases of death in long-term contracts when it affects vulnerable households, in which there are minors, persons with disabilities or persons over 65 years of age”.
For more information, please contact Premier Law
info@premierlaw.net
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