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Government has Extended Throughout 2023 the Cap on Rent Increases

Posted in: Consumer Matters, Information Topic,
Author: Myra Cecilia Azzopardi
Tags: , , ,

Translation from the email from the consumer association Facua. Link to the associaton
at the bottom of post.

Hello Myra Cecilia.

We are writing to inform you that, if you live for rent, the Government has extended throughout 2023 the cap on rent increases that it established last year, limiting it to a maximum of 2%.

This means that if the price of your rental is revised throughout the year according to the Consumer Price Index (CPI), your landlord will not be able to fully reflect it in your contract, since the ceiling is in the so-called Guarantee of Income Index. Competitiveness, limited to said 2%.

This measure of the Executive – Royal Decree-Law 20/2022, of December 27 – extends the extraordinary limitation of the annual update of the rent of housing lease contracts, which was established in article 46 of the Royal Decree-Law 6/2022, of March 29, by which urgent measures are adopted within the framework of the National Response Plan to the economic and social consequences of the war in Ukraine.

The rule establishes that tenants with rental contracts whose rent must be updated because the corresponding year of validity of the contract is fulfilled may negotiate with the landlord the increase that will be applied in that annual update of the rent instead of the percentage established in the contract. -which cannot exceed the percentage variation experienced by the CPI on the date of each update, as established by the law on urban leases-. In this sense, they will have the right to refuse any increase greater than the annual variation of the Competitiveness Guarantee Index, which has been 2.02%.

If you take a higher raise, you can get out if the owner is a gran tenedor (natural or legal person owner of more than 10 urban properties, excluding garages and storage rooms, or a constructed area of more than 1,500 square meters)

If you accept an increase of more than 2% because you were unaware that you had that right, you will have to assume the new agreed amount as long as it does not exceed the inter-annual CPI, unless the owner is a large holder. In this case, if you signed a larger increase, you will have the right to pay the new rent limiting the increase to 2%.

A large holder is considered to be a natural or legal person who owns more than ten urban properties for residential use or a constructed area of more than 1,500 m2 for residential use, excluding garages and storage rooms in any case.

If they do not notify you of an increase, you pay the same until they do

If the owner does not notify you of any proposed increase, you can continue paying the rent at the same amount as during the last year. Thus, if the landlord charges you a receipt with any increase, be it 2% or higher, you will have the right to demand the return of that increase.

To apply the increase, you must in any case notify you in advance and you can refuse to accept any increase that exceeds 2%.

Mandatory extension of contracts

In addition, this new government decision also implements the mandatory extension of rental contracts that end on December 28, 2022 -the day the new regulations come into force- until June 30. If your contract ends during this period, you can request an extraordinary extension of six months, maintaining the same conditions.

The owner of the house is obliged to accept said extension, unless something different was agreed beforehand or if he communicated and justified within the term that he needs the address for himself or his relatives in the first degree of consanguinity, or by adoption or for his spouse. in the event of a final judgment of separation, divorce or marriage annulment. In addition, if the extension of the lease becomes effective and the price is revised, likewise the increase cannot be higher than the 2% limit.

And remember that if your landlord applies an incorrect rent increase, at FACUA we can help you.


Please note: The information provided is based upon our understanding of current legislation. It is not legal advice but is provided freely to enable you to be properly informed. We recommend that if you are considering taking action, you should seek professional advice.

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