The State Secretary for Housing and Urban Planning’s resolution from the 14th of March 2024 has recently been passed, which makes the most pressured zones in the rental market in Catalonia known. This resolution, which puts an end to the administrative procedure, seeks to complement what was established in article 17.7 of the Law 12/2023, from the 24th of May, on the right to housing, better known as the “Housing Law.” This law introduces concepts such as an “under-pressure zone in the housing market” and a “reference price index” which serves to determine the price limit for rentals when a lessor is a “major property holder.”
The Housing Law considers “major property holders” to be any natural persons or legal entities who are owners of more than 10 urban properties for residential use or a surface of more than 1.500 square metres for residential use. If a situation is deemed to be an “under-pressure housing market” any landlord with 5 or more properties in the designated zone will be considered a “major property holder.”
In line with what was established in the Housing Law, and at the request of the Government of Catalonia, the resolution declares 140 municipalities in Catalonia to be “under-pressure zones in the housing market”, which are in other words, geographical zones in which there is an especial risk of an insufficient offering of affordable housing.
The resolution is valid in the “under-pressure zones” for a three-year period beginning the day after the resolution was published, and it confirms the definition of “major property holders” in declared zones, as the holder of five or more properties in such areas.
For zones declared as “under pressure” the State Reference System for Rental and Living Prices will be applied, commonly known as the “reference price index”, a database of public data, periodically updated, which will serve to set a maximum limit on the amount of rent of new rental contracts. This index can be consulted on the Ministry of Housing and Urban Affair´s webpage.
For landlords who are not considered to be “major property holders” the reference index will apply in order to limit the price of renting when it comes to renting properties which have not been leased in the past 5 years. In turn, new contracts will not be allowed to increase by more than the permitted annual update of the rent of the previous contract, with a maximum annual increase of 3% for 2024. It will be from 2025 that a new index will be introduced which will replace the CPI.
In addition to the creation of this new system to limit prices, it should also be remembered that there will be the introduction of (i) the possibility of extending rental contracts by one year when the tenant proves themselves to be in a situation of economic or social insecurity, and (ii) the responsibility of the landlord to take responsibility for the costs of the property management services that result from formalising the contract.
This resolution takes effect from its entry into force on the 16th of March 2024.
The details of the municipalities declared to be “under-pressure zones” can be consulted at: BOE
Oscar Vilá
Vilá Abogados
For more information, please contact:
22nd of March 2024
