In Catalonia’s legal landscape, a significant change has emerged in housing rental regulation, with important implications for landlords and tenants alike. The Government of Catalonia recently announced the approval of a Decree Law aimed at extending containment of temporary and residential rental prices, a measure taken under the State Law for the Right to Housing.
What does this new regulation entail?
This new regulation expands control over rental prices, focusing particularly on temporary leases to prevent some landlords from declaring contracts as temporary when, in practice, they are permanent—a strategy allowing them to evade the maximum price limit set by the reference index. With the implementation of this Decree Law, the aim is to eradicate this practice, equating temporary rentals, such as those concluded for work, education, or medical reasons, with rentals intended to meet permanent housing needs.
Distinction between seasonal and permanent rental
According to the new Decree Law, temporary leases covering permanent housing needs will be subject to the same limitations as long-term leases. On the other hand, recreational and vacation rentals will not be affected as they fall outside the scope of the regulation, being seasonal leases. Therefore, to avoid potential legal conflicts and ensure compliance with existing regulations, it will be essential for landlords to clearly specify in the contract the intended use of the rented property.
Regulation of room rentals
The scope of this new law is not limited solely to full housing rentals but also extends to room rentals. In this regard, landlords must ensure that the total cost of all rooms does not exceed the limit set for the entire dwelling. This provision aims to prevent regulations from being circumvented by breaking down the rental into smaller units. For example, in an apartment with three rooms, whose total cost is 900 euros per month according to the reference index, the maximum price for each room individually would be 300 euros, thus maintaining the limit set by law.
Application of the price index
The Price Index, implemented last March, is a fundamental tool in applying these regulations. It is applied in areas declared as tense, understood as those where rental prices have experienced a sustained increase in recent years. This index serves as a reference for determining the amount of new lease contracts and will be mandatory when the property belongs to a landlord classified as a “large holder” or when the property has not been rented in the preceding five years. In the signing of new contracts, the application of the high or low range of the index will depend on the negotiation between tenant and landlord, but it cannot exceed the price of the last contract if the property has been rented in the last five years.
The expansion of rental regulations in Catalonia represents a significant step to consider, and it is essential for both landlords and tenants to be aware of these new provisions and comply with their legal obligations to avoid potential conflicts in the future.