The government approved the cap of 2% to update rents in the renewals of rental housing contracts in March 2022 and the measure will be in force at least until the end of the year.
However, there are some types of housing leases that are exempt from this measure, which means that rents can be updated according to the CPI.
The Rental Negotiating Agency (ANA) has prepared a guide where it reviews these six assumptions and which is aimed at both owners and tenants. Among them are seasonal rentals or room rentals.
The types of rentals exempt from the 2% cap
These are the six assumptions included in the guide of the Rental Negotiating Agency:
- Seasonal rental. Although they are governed by the Urban Leasing Law (LAU), they are exempt from the 2% limit because they are considered leases for use other than housing.
- Rental of luxury homes. They are leases of flats or single-family homes (detached, semi-detached or independent) whose constructed area exceeds 300 m2 or their annual rent exceeds 5.5 times the minimum interprofessional wage (SMI). These leases, although they are governed by the LAU, are allowed to be governed, in this matter, by their own agreements.
- Rental of homes whose tenants are legal persons. As a general rule, with some exceptions, these types of leases are considered as leases for use other than housing, and therefore not subject to the limitations of the 2% limit.
- rooms for rent. They are exempt from the 2% limits, because they are not governed by the LAU, but by the Civil Code.
- Tourist housing rental. They are exempt because they are not governed by the LAU, but rather by the sectoral regulations issued by the CCAA and by the Civil Code.
- Rentals renewed by Tácita Reconducción. These leases, at the beginning, were subject to the LAU, “but when they enter the period of tacit renewal and are renewed, due to the exhaustion of all their extensions (mandatory and voluntary), they are governed by the Civil Code. These renewals occur when the leases have ended because they have exhausted all their extensions, and the tenants remain for 15 more days in the leased home, with the consent and acquiescence of the landlords,” explains the agency.
The legal foundations in the tacit redirection
Jose Ramon Lefty, lawyer specializing in leases and CEO of the Rental Negotiating Agency (ANA)affirms that the legal basis for the exclusion of the application of the 2% ceiling for this type of lease is based on three arguments.
One of them is her own wording when modifying article 46 of the Royal Decree-Law 6/2022 of March 29, which establishes that the measure to limit the updating of rents with the IGC and the 2% ceiling “is only applicable to housing leases subject to the LAU of 94 whose rent must be updated when the corresponding annuity of validity of the lease is fulfilled”.
Therefore, assures Zurdo, “the limitation refers to year-on-year income reviews, but not when the contract is over, because it is no longer in force and is no longer regulated by the LAUwhich is precisely the moment when the tacit renewal subject to the Civil Code comes into play”.
In addition, explains the general director of ANA, “a lease contract renewed by tacit renewal is subject to the rules of the Civil Code (except the duration), and the limit to the update of rents provided for in Royal Decree-Law 6/2022 of March 29 only applies to leases of habitual residence subject to the LAU, with one exception”.
And that exception is extracted from a modification that the Government has carried out, through the approval RDL 1/2023 of January 10, of urgent measures regarding incentives for labor hiring and improvement of the social protection of people artists. In said RDL,”has included a Modification of article 71 to renewed leases through the figure of tacit renewal, expressly regulating that these leases despite being regulated by the Civil Code. In this way, it admits regarding the application of the extraordinary extension, that they are included within the leases subject to the LAU, and also regulates that the lease that makes use of this measure, during the period of extraordinary extension, will not be may raise the rent by more than 2%.
Thus, Zurdo insists that “the Government has had the possibility of including in this reform that this 2% limit would also be applied when the leases enter the tacit renewal period, and by not doing so, being able to do so, allows us to interpret that the leases that enter into tacit renewal have been left out of the 2% limitand the income updating procedure provided for in the initial contract is applicable to them, as they are subject to the Civil Code, without any exception such as the one mentioned”.