Latest measures to make the rental market more flexible and dynamic
Recent weeks have seen the publication in the Official State Gazette of the Law on measures to enhance the flexibility of and boost the housing unit rental market, in a bid to make the market more flexible and dynamic, amending the rules governing leases.
Noteworthy examples of the new developments introduced are:
– The prevalence of the parties’ intentions, meaning that what they decide now takes priority over the statutory provisions in matters such as rent review. Only where no provision has been made will rent be reviewed in line with the CPI.
– Term of leases, reduced from five to three years where the lessor is obliged to maintain the lessee.
– It has been made easier for lessors to recover the housing unit where it is needed for him/herself, their children, parents or spouse in the event of separation, divorce or nullity, where one year of the lease has elapsed and at least two months’ advance notice is served on the lessee, without the need for any express agreement.
– Possibility of withdrawal by the lessee, which may deem the lease agreement to have terminated when at least six months of the lease have elapsed and at least 30 days’ advance notice is served on the lessor.
– Effects of registering leases. Following the reform, purchasers of a housing unit are only obliged to maintain the tenant if the lease was registered at the Property Registry prior to the sale.
– Registry of final judgments or arbitral awards on the nonpayment of rent, to which property owners may gain access on submission for such purpose of a draft proposal clearly identifying he potential tenant. Organization and operating procedures are pending regulation under a Royal Decree.
We will have to wait to see the practical application of the reforms that, in principle, only affect leases arranged after the entry into force of the law in order to ascertain whether the measures adopted do indeed make the housing unit rental market more flexible and dynamic.