March 1, 2021

What happens after the rent decree fiasco? The three-year contracts and the unlimited guarantees of 2013 return | Economy

What happens after the rent decree fiasco? The three-year contracts and the unlimited guarantees of 2013 return | Economy



The repeal of the royal decree housing law by Congress, which is expected to occur this Tuesday afternoon once the PP, We, Citizens and CKD they have announced their vote contrary to the norm, will return the rents to the situation of December 18, the day the decree was published in the Official State Gazette. For this, the "derogation agreement", which is what is legally called the fact that the lower house does not lend its support to the text, must also be published in the BOE. From that moment, it will be understood that the precepts of the rule are annulled and therefore all the laws that it modifies return to their previous drafting.

Before remembering what those conditions are, it is important to emphasize that the situation will not affect the contracts signed since December 19, 2018, the date of entry into force of the decree law, until its repeal. These contracts have been signed according to the regulations in force during the last month and therefore its conditions are respected: the minimum term of the five-year contract plus three of tacit extension (seven initial years if the landlord is a legal entity), the limitation of the additional guarantee to the month of deposit at two months and the payment of the real estate expenses by the lessor if it is a legal person. But what will happen to the contracts that are signed from now on?

Duration and endorsements

For the new firms, the reform of the Urban Leasing Law (LAU) that the PP Government made in 2013 will be taken as reference. This means that the minimum term of the contract is reduced to three years plus one of tacit extension. The landlord can request the additional guarantees to the month of bail he deems appropriate without any limit and can also require that the tenant who pays the commission (normally a monthly payment) if a real estate agency has intervened.

Tourist apartments

The explicit exclusion of the tourist rental contracts from the LAU is also nullified: in the 2013 reform this reference was not made because then the rental flats for short stays did not represent an excessive problem.

The rejection of the decree will also affect other rules that it amended like the Horizontal Property Law. In this case, the prerogative that neighboring communities can prohibit new tourist rentals with an agreement of three fifths of the owners or the obligation to extend the reserve fund to 10% is repealed.

Evictions

The decree also modified the procedure to be followed by the courts before evictions through the Civil Procedure Law. It allowed the tenant to claim social vulnerability, forcing the judge to request a report from the social services. If the report ratified that situation, the eviction would be paralyzed for a month (two if the owner was a legal entity). The repeal will mean eliminating those additional guarantees, which Podemos denounced as insufficient because it required that the report be necessary in all cases.

Taxes

Another of the rules that are suppressed is the exemption of the payment of the Tax on Documented Legal Acts in the rents of housing for stable use, a tribute that de facto It had little incidence because many times it was not paid. Finally, the amendments to the Law of Local Taxes that enabled the City Councils not to pass on the IBI in social rent when the landlord was an agency or public entity, to reduce 95% of that tax on rentals of limited income or to recharge an extra to owners of vacant properties. The reform of this law also allowed to allocate the surplus of the City Councils to expand their public housing stock. With the repeal of the decree, that assumption will again be suppressed.

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