The new housing law establishes relevant changes that affect the property owner. These are changes that stand out in the rental contracts signed from may 26th, 2023:

• The lessor / property owner must assume the payment of the real estate management fees, and those for formalizing the contract when a professional has intervened.

• The rental contract will be extended annually for up to three more years, if the contract expiration date arrives and the owner has not expressed his desire not to renew it 4 months before, or if the tenant has not expressed it 2 months before.

• Extraordinarily, when the tenant proves a situation of social and economic vulnerability through a report from the municipal or regional Social Services, and the landlord is a large homeowner, the validity of the contract will be extended for another year.

• If, in addition, the home is located in a stressed residential market area, the contract may be extended for up to three more years. Unless, the tenant gets notified of the need to occupy the property by the landlord or the landlord’s children or parents.

• Payment of rent will be made by electronic means, unless the lessee does not have access to these means.

From May 26th, 2023, the real estate agency fees and rental contract formalization are in charge of the property owner. This point of the law modifies article 20.1 of the Ley de Arrendamientos Urbanos (LAU), establishing that the tenant will not pay any of these fees. 

However, if the tenant hires any other services (consulting, legal advice, personalized location of real estate, etc.), these fees must be paid by this tenant.

Yes, the owner can increase the rental price by updating it annually, as long as the rise in the rental price is made in the annual review of the contract and with the maximum limit allowed. The “Índice del Precio al Consumidor (CPI)” is no longer taken as a reference, but the IGC (Índice de Garantía de la Competitividad) is taken as a reference index.

The annual increase in the rental price is limited in the following way: 

• In 2023:The maximum increase of the rent will be 2% over the actual rent.
• In 2024: The maximum increase will be 3% over the actual rent.
• In 2025: a new index will be created. It must be published officially before December 31ft, 2024.

They are specific big cities areas delimited by the competent administration (City Halls and/or Autonomous Communities). 

In order for the Public Administration to be able to declare a specific area of stressed residential market, one (or both) of these two circumstances must occur:

1. That the average burden of the cost of the mortgage or rent in the personal or family budget, plus basic expenses and supplies, exceeds 30% of the average income or average household income.
2. That the purchase or rental price of the property (in the last 5 years) has increased by more than three percentage points higher than the percentage of the CPI of the corresponding autonomous community.

The declaration of “stressed area” will be reviewable every 3 years. Likewise, the determination of stressed residential market areas will depend on each autonomous community.

If your house is NOT in a stressed residential market area: you can freely pact the price of the rent, without limitations, even if you are or are not a large landlord (who owns a substantial number of rental properties). 

If your house is in a stressed residential market area (once these areas are published), it will depend if you are or are not a large landlord.

In case you are NOT a large landlord:

• New contracts won’t be over the past rent price of the past five years before the date of the new rental contract. 
• If the house has not been rented over the past five years, the limitation will be according to the Reference Index (in case it is already published). If this index has not been published, the rent price will be pact freely by both parties (lessor and tenant). 

In case the house is in a stressed residential market area and the landlord is a large landlord, the rent will be limited by the Reference Index. If this index has not been published, the rent price will be pact freely by both parties (lessor and tenant).large

A large landlord is defined in Law 12/2023 (housing law) as the physical or legal person who has more than 10 houses or owns a total of 1.500 m2 of constructed area. The autonomic communities will have the faculty of reducing this definition of large landlord to 5 or more properties.

In this definition, ownership of all properties is computed, including those for personal use and second residences.

The new law contemplates the modification of the “Ley de haciendas locales” allowing the city halls to demand a surcharge in the IBI (“Impuestos de Bienes Inmuebles) that will depend on each case:

• A surcharge of up to 50% of the IBI for houses that have been permanently unoccupied for two years without a cause, and if the owners are lessors of four or more houses.
• A surcharge of up to 100% of the IBI for houses that remain unoccupied for more than three years.
• Another additional surcharge to the previous ones of another 50% of the IBI if the owner owns two or more homes in the same municipality.

They are justified causes to prevent the application of the surcharges (it will depend of each city hall): when the house is unoccupied due to temporary transfer for work or study reasons; change of address due to situation dependency, health or social emergency; properties for second residence (maximum four years unoccupied); or homes that can’t be inhabited because they need rehabilitation or works.

Yes, you can evict your tenant if he has defaulted on the rental contract, especially when it is because of a non-payment of the rent or because the time of the contract has ended. However, with the new housing law, when the time comes to file the eviction lawsuit, the following points must be taken into account:

• If you must expressly mention whether the leased home constitutes the habitual residence of the occupant.
• Whether the demanding part is a large landlord or not. He must accredit it by means of a certificate from the Property Registry where the list of his properties is stated.
• If you are a large landlord, you must prove that the occupant of the house is not a vulnerable person. In case it is, it must be demonstrated that it has been submitted to the mediation process provided for that purpose, prior to the claim.

No, this new law does not affect the room rental contracts. The rent of rooms is not an object of regulation or modification by this law.

No, short-term contracts or those for another use than habitual residence have been excluded from this law.