Español
Русский
Royal Decree-Law 6/2022, of March 29, adopting urgent measures within the framework of the National Plan to respond to the economic and social consequences of the war in Ukraine It stipulated that if the landlord was not a large landlord, the rent increase would be agreed upon between the parties to the contract and, in the absence of such an agreement, the rent increase could not exceed the result of applying the annual variation of Competitiveness Assurance Index(and not the CPI, as is customary) on the date of the rent update according to the contract, taking the month prior to the update as the reference month. That is, if the rent was updated in June, we should use the index published in May as the reference.
Initially, this extraordinary limitation on rent updates was limited to contracts that were due to update the rent between March 29 and June 30, 2022; however, Royal Decree-Law 11/2022, of June 25, subjected contracts until December 31, 2022 to this restriction.
The use of Competitiveness Assurance Index and not the Consumer Price Index, the one used to update lease agreements, is because the CPI is skyrocketing, standing at around 10%,while the IGC is at 4.76% variation as of the updated date of August 19, 2022.
In principle, this limitation is only subject to the year for which the rent update operates, but it could happen that the measure is extended.
But what about old-style rent contracts that enjoy rents well below current market rates?
Housing lease agreements entered before May 9, 1985, which remain in force, continue to be governed by the rules relating to the tenancy agreement of the consolidated text of the Urban Leases Law of 1964.
These contracts are characterized not only by their regulatory differences, but also by their distinction within the economic framework of leases, since they are homes with a rent well below the current market rate.
Well, Royal Decree-Law 6/2022, It imposes the extraordinary limitation on the annual rent update to housing lease agreements subject to Law 29/1994, of November 24, and It might seem that, according to its literal wording, Old-rent contracts are exempt from this limitation on rent updates.
However, this approach may be doubtful, since, although housing lease agreements entered into before May 9, 1985 are regulated in the Transitional Provisions of the Urban Leases Law, subjecting them to the previous regulatory regime, it is no less true that, subsidiarily, the LAU would apply, therefore, they could be subject to that limitation established by Royal Decree-Law 6/2022.
Therefore, the best option for the parties to the contract is to reach an agreement regarding the limitation on rent increases, regardless of whether the contract is under an old rent control agreement or is subject to the Urban Leases Act (LAU). In case of disagreement, the following would apply: Competitiveness Assurance Index, taking as a reference the month prior to the one in which the update will operate.
