The Housing Law 2023 was published last May 26. Law 12/2023, of May 24, aims to regulate the conditions that guarantee equality in the exercise of the right to decent housing.
Below, we highlight the aspects and modifications of previous laws with the greatest impact.
Housing Law 2023
The first thing is that this law differentiates between homeowners according to the number of homes they own. This affects the obligations of both.
The law defines a large holder as a person, whether natural or legal, who owns more than 10 urban properties for residential use. This can be reduced to 5 in the case of a stressed residential market area.
Or of a constructed surface of more than 1,500 m2 of residential use. Excluding garages and storage rooms.
A stressed residential market area is defined as an area where there is a particular risk of insufficient housing supply for the population.
What does this new Housing Law 2023 modify?
The Law modifies several articles of the Urban Leases Law, among which we highlight the following:
Extension of the contract
After the legal term of 5 years, 7 for legal entity owners, the lessee may request an extraordinary extension for a period of one year. Always if it is accredited to be in a situation of social and economic vulnerability. On the basis of a report or certificate issued in the last year by the social services. The extension must be accepted when the lessor is a large tenant.
When the property is located in a “stressed residential market area”, after the legal term or the extraordinary extension of the previous point. The lease may be extraordinarily extended by annual installments, for a maximum period of three years. This request for extraordinary extension must be accepted by the lessor, unless he needs the property for himself.
Payment of rent
Payment shall be made by electronic means. Except when one of the parties does not have a bank account or access to electronic means of payment, in which case payment may be made in cash. This modifies the previous wording, which stipulated cash payment as the default form of payment.
Limitation of rents
When the property is located in a “stressed residential market area”, the rent agreed at the beginning of the new contract may not exceed the last rental contract rent that had been in force in the last five years in the same property. Once the clause of annual update of the rent of the previous contract has been applied, no new conditions can be established that establish the repercussion to the tenant of quotas or expenses that were not included in the previous contract.
When the owner is also a large tenant, the rent agreed at the beginning of the new contract may not exceed the maximum limit of the price applicable according to the system of reference price indexes based on the conditions and characteristics of the rented property.
This same limitation will be applied to properties that are located in a “stressed residential market area” and on which no housing lease contract has been in force in the last five years. Provided that it is so stated in the resolution declaring the “stressed residential market area”.
Exception to the limitation of rents in the new Housing Law 2023
It will only be able to be increased, in a maximum of 10% on the last rent of contract of rent of habitual housing that had been in force in the last five years in the same housing, when one of the following suppositions is credited:
- When the housing had been object of an action of rehabilitation. Which had finished in the two years previous to the date of the celebration of the new contract of lease.
- When in the two years prior to the date of the conclusion of the new lease contract, rehabilitation or improvement actions of the dwelling have been completed in which a non-renewable primary energy saving of 30% has been accredited.
- When in the two years previous to the date of the celebration of the new lease contract there had been finalized performances of improvement of the accessibility, properly credited.
- When the lease contract is signed for a period of ten or more years. Or, a right of extension is established that the lessee may voluntarily accept. That allows the lessee to extend the contract under the same terms and conditions for a period of ten or more years.
Property management fees
The real estate management expenses and those of formalization of the contract will be charged to the lessor. In the previous wording, such taxation only existed for legal entity landlords.
Index update of rents in the new Housing Law 2023
The National Institute of Statistics will define, before December 31, 2024, a reference index for the annual update of the housing lease contracts. This index will be set as a limitation of the increase in the reference rent.
As an intermediate regime, a maximum annual increase in housing rents of 2% in 2023 and 3% in 2024 is established.