New rules for rental market aim to “strike a balance”

The Spanish government is trying to jumpstart the country’s almost nonexistent rental market with a new set of measures that grant owners greater legal safeguards against defaults and gives tenants greater flexibility to end their leases.

On Friday Public Works Minister Ana Pastor and Deputy Prime Minister Soraya Sáenz de Santamaría presented the draft legislation that the government will take to Congress. The overarching goal, Pastor said, is to strike a “balance” between landlords and tenants in a country with a home-ownership rate of around 82 percent, and a marked aversion for renting out one’s property on the belief that the law clearly benefits the tenants — even those who fail to pay the rent.

“Default professionals”

Among other things, the law will encourage “fast-track evictions” of tenants in default — settling debts at the last minute will no longer save defaulters from eviction. The secretary of state for infrastructure, Rafael Catalá, said the aim is to prevent abuses by “default professionals.” Owners will also have an easier time getting their property back if they need it for themselves, with only two months’ notice necessary rather than a contract clause.

One of the more controversial aspects of the draft legislation is the elimination of the use of the Consumer Price Index as the basis for raising the rent year on year. From now on, both parties will be able to freely set the rent, something that consumer organizations argue will favor abusive behavior by landlords.

As for the tenants, they will be able to deduct the cost of any refurbishment work carried out in their rented properties from their taxes, and only give one month’s notice instead of two if they wish to terminate their lease ahead of time.