Seven updated questions about your rent contract
In March we wrote an article about which documents we ask you to formalize a rent contract. Today we write another whics is complementary.
1. What involves a rent contract? and which information has to be in the contract?
By renting you are temporarily and voluntarily giving up possession of a property in exchange of a money amount while the contract is active which will always explicitly state the amount to be paid and the address of the rented property.
2. How does Royal Decree-Law 11/2020 affects renting, which adopts urgent complementary measures in the social and economic field to deal with COVID-19?
It is a fact that the RDL is focused on protecting tenants.
2.1. Suspension of evictions for vulnerable families:
The court must assess the extent of the concept "vulnerable family" and whether this "vulnerability" has been caused by a decrease in income directly derived from the economic hibernation caused by the coronavirus. The suspension is for a period of six months (counting from the end of the alarm state).
2.2 Automatic extension of habitual residence contracts:
Contracts of this type that will expire between the entry into force of the state of alarm and two months after its termination may be extended, at the request of the tenant, for a maximum period of six months. During this time, the terms and conditions established in the initial contract must be maintained. This request must be accepted by the lessor, unless the parties establish another type of agreement.
2.3 Moratorium on large landowners:
As we have said, 'great owner' is the person - legal or physical - owner of 10 or more properties.
Tenants who are in a situation of economic vulnerability may request the landlord, the temporary and extraordinary deferment of rent payment for four months. From here, the lessor may choose to offer the tenant a reduction of 50% of the debt of those four months or to divide the installments to be owed within three years and without any accumulated interest.
2.4 Moratorium on small owners:
(...) The text discussed in the Council of Ministers allows vulnerable tenants to request an extension or remission from the landlord. Both will have a period of seven working days from the request to look for alternatives, be it the suspension, the postponement or the fractioning of the quota.
As it cannot be otherwise, tenants who fraudulently avail themselves of the planned aid will be punished.
3. How is the amount of rent established?
It depends on the moment of the agreement between the owner and the tenant we refer to (now free market is partially interfered).
Firstly, when the tenant is looking for a property, it is the owner who establishes the price on the free market. However, when the first contract has ended and it has to be extended the possible increase in the rental price cannot exceed the Consumer Price Index.
4. What is a rental deposit? Is it legal?
It is an amount that the tenant must led in the Catalan Land Institute to cover possible damages to the property (if there is no deposit, it will be completly returned to the tenant when the rental contract ends). The deposit is equivalent to one month's rent for a dwelling and two months for uses other than residential. Furthermore, both parts can agree to establish additional bank guarantees.
The deposit is completely legal. Specifically, it is set out in Article 36 of the Urban Rentals Law in force in 2020. As it is established in the law, it is not an imposition of the property or the real estate company.
5. Can a rental contract be extended?
Yes, as long as the property does not object and the tenant also choose to continue with the agreement.
6. Can the owner recover the property before the end of the contract?
Yes, but he/she must notify the tenant of his intention 30 days before the end of the contract (or any extension of it). It should be mentioned that the property can only claim that it needs the real estate product for itself or a close relative for reach the property recovery.
Also, to be completely legal, the property must state its intention from the beginning in the contract and cannot recover the real estate product. Moreover it can't be recovered before one year has passed since the beginning of the rental.
7. Can the tenant 'opt out' of the lease before its end?
Yes, he or she can withdraw from the contract. However, he or she must do so once six months have passed since the contract was signed. As for the procedure, the tenant has to communicate his resignation using a reliable means - a bureaucrat for example.
Let's see with further detail, given that the property is affected by the premature departure of the tenant, according to article 11 of the LAU, the tenant will be compensated with an advanced payment of one month's rent for each of the years remaining until the end of the contract (or the proportional part if there is less than one year left at the time of departure). This disposition has not been modified by the recent Royal Decree 7/2019 that reforms the Law of Urban Rentals.
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