Royal Decree-law 7/2019, of 1 March, on urgent measures in the area of housing and rent, introduces modifications in different normative provisions in order to adopt certain measures that affect the exercise of the constitutional right to decent and adequate housing.
In particular, amongst others, Royal Decree partially modifies legislation regarding Urban leases, including the following news:
- Duration of the lease:
The law modifies the duration of the mandatory and tacit extension of the contract. Mandatory extension period is set at five years, exception made in cases in which the lessor is a legal entity (company), where a period of seven years applies. Regarding tacit extensions, the law states that, upon the expiration date of the contract or any of its extensions, and after the expiration of the mandatory extension period, if there is no communication from any of the parties regarding willingness not to renew it – to be communicated within certain deadlines-, the contract will be extended annually for three more years.
- Guarantee amounts:
Maximum amounts of additional guarantees that the lessor can request – either through deposit or bank guarantee- are set at two monthly installments of income, unless in cases of long-term contracts. If the lessor is a legal entity will have to pay for any expenses of real estate management and formalization of the contract.
- Updating the price of the rent:
During the duration of the contract, the price of the rent will be updated taking in consideration the Spanish Consumer Price Index (IPC).