August 1, 2021

The municipalities can set the maximum rental price

The municipalities can set the maximum rental price


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The town councils may put a ceiling on the rental prices. The agreement signed between the Government and We can to fix the General Budgets of 2019 It states that the consistories may declare "an urban market area stressed when it has occurred an abusive increase in income ». Within these areas, these administrations will be able to "limit abusive price increases".

The councils will also be enabled to develop a rental price index "of reference according to an objective methodology and subject to periodic review". This measure is focused on these administrations can "regulate" the market.

The control of the prices of rent was one of the axes on which the budgetary negotiation between Podemos and PSOE revolved. The purple formation had insisted on controlling the price, an option that the Government had initially rejected. In fact, in July, the Minister of Public Works, José Luis Ábalos, ruled out RNE to set a price limit for rent. Finally, the party led by Pablo Iglesias has managed to get the Executive to control the increases in these rents.

The agreement includes more measures regarding housing. As the Executive had advanced, it will be expanded the period of mandatory extension of contracts from three to five years. In addition, the tacit extension, currently established in one year, will be extended to 3 for natural persons and to 7 if the lessor is a legal entity. Six months in advance to communicate that it is not intended to renew this contract.

In the same way, the communities of neighbors will be able to veto the tourist rent, a measurement announced weeks ago by the Ministry of Industry. Likewise, no additional guarantees may be agreed on the deposit for more than two months' rent.

Real estate reviews

On the supply side, 20,000 rental homes will be built at "affordable prices" within four years. The social housing will also be reinforced with a law, scheduled for 2019, which will guarantee its exploitation «only for renting vulnerable people ». For its part, the State Housing Plan will finance the regions so that they can exercise the "rights of first refusal and retraction in the transmissions of acquired homes".

The pact also includes the need to establish a legal framework to define what is an empty property and a "Housing holder", opening the door to impose incentives and penalties for these owners to take these floors to the market. The big holders will have to "collaborate with the competent administration to make the empty house available to the rental market at reasonable prices".

Industry experts have already warned the government that intervening in the housing market could have the opposite effect. This week, Juan Fernández-Aceytuno, CEO of Sociedad de Tasación, explained in an event the limits on rent "always affect prices". "The owners are aware of how these measures are applied and demand a part of the rent in 'B'," he said..


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