THE Catalan regional government has approved an amendment to its housing law which will close a key ‘loophole’ that allowed landlords to evade the introduction of a cap on rental prices.
“It is necessary to regulate all the loopholes that the state law had not foreseen and that have served to evade the application of the law”, said Ester Capella, the regional minister for land and urban planning.
In February, Catalunya became the first region in Spain to introduce rent controls amid a surge in prices and a dearth of affordable housing stock for citizens.
Following the application of the law, real estate portals such as Idealista recorded a significant shift from properties advertised as conventional rentals to seasonal rentals, accounting for over 40% of the market in Barcelona.
The newly-approved decree, which comes into law just 48 hours before the start of the hotly-anticipated Catalan election campaign, modifies the law to specify that seasonal rentals are also considered to be habitual residence, and therefore would be subject to the price cap.
Now, all rental contracts must explicitly state why it is temporary, and that all other uses other than recreational – to study, practice medicine, work or waiting for a property to become available – will be considered habitual residence and therefore subject to regulation, as well as an obligation for the landlord to pay real estate agent’s fees.
The tighter legislation will also apply to the letting of individual rooms.
Additionally, all advertisements for rented flats will be forced to state the price of the previous contract, the price set by the Rental Price Reference Index which controls rental limits, and whether the owner of the property is a major tenant, which is defined as someone who rents out ten or more properties.
Landlords who fail to comply with the new legislation could be hit with fines of up to €900,000.
Minor infringements – renting a property for up to 10% more than allowed – will incur a fine of between €3,000 and €9,000, serious infringements – between 10% and 30% – will incur a fine of between €9,000 and €90,000, whilst very serious infringements – 30% and above – will see fines from €90,000 to €900,000.
The law will apply to areas of Catalunya denoted as being ‘tense housing zones’ – currently, 271 municipalities are defined as ‘tense’, with a population of over seven million inhabitants.
