Wednesday, February 1

The 2% limit on rentals will be mandatory only for large owners


EP

The landlords will be able to negotiate with their tenants the increase in the monthly rent, which may be lower or remain as it is

Edurne Martinez

One of the outstanding measures of the Shock Plan against the effects of the war announced by the Government has been the limitation of the review of rents to 2% for the next three months despite the increase in the CPI well above this figure.

This limitation extends not only to certain more vulnerable groups, but to all current rental contracts that have to face a renewal from April 1. But it will be an obligation only for large owners (those who have more than 10 urban dwellings), while for small holders it will not be a legal imperative but will be allowed to negotiate between the parties, although always with the limit of 2% in case of disagreement. Thus, the tenant and landlord can agree on a lower increase or that the price stays the same.

It is the first time in the history of democracy that the Government limits the rise in rental income in this way, as confirmed by the second vice president, Yolanda Díaz, at the press conference after the Council of Ministers. It is a measure designed for the tenant because those who live for rent “may be having many problems paying their rent or it may be impossible for them in these circumstances,” she said.

There are no public records on the number of rentals, but from the Ministry of Transport, Mobility and Urban Agenda they assure that in Spain there are about 3.5 million tenants. If the contracts were distributed evenly in all the months of the year, a quarter of them would have to update their rent from April to June, so 900,000 people would benefit from this rent increase limitation.

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From 76 to 20 euros of rise

Until now, the problem faced by many tenants is that their landlords could demand a monthly rent increase of 7.4% (latest inflation data available, for the month of February). A record that will be even higher in March, and that could touch 10% in the short term. As an example, a rent signed in February 2021 could have risen by 7.6% given the inflation of that month, so if until now the agreed rent was 1,000 euros, it would increase by 76 euros per month, plus of 900 euros per year. On the other hand, with a limit of 2%, the increase would be only 20 euros, 240 per year.

Although it is a temporary measure, real estate agencies have not received this announcement well. From Idealista they criticize the Government that “reloads on individuals what is the responsibility of the Administration” and consider that in many cases it will cause people to hesitate to put their properties up for rent.

For his part, the president of the CEOE, Antonio Garamendi, regrets that when talking about flat owners, one thinks of large companies, “but normally they are normal people.” He clarified that neither for this nor for the rest of the measures approved by the Government there has been any contact with the businessmen.

However, for the Facua consumer association it is a “reasonable” measure, although it believes that it is necessary to extend it until at least the end of the year. The measure is extendable, as has happened with other measures approved by the pandemic.


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