Regulatory updates on seasonal and room leases in Catalonia

8 May, 2024
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Real Estate
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Amaia Forcada


Context

On April 25, 2024, Decree-Law 6/2024, concerning urgent measures in the housing sector was published in the Official Gazette of the Government of Catalonia (DOGC). Its entry into force is expected the day after its publication, although this regulation still needs to be validated or repealed by the Parliament of Catalonia. The deadline for this is 30 days, and its decision will also be published in the DOGC.

Decree-Law 6/2024 outlines in its preamble the various measures that the Government of Catalonia has recently approved to defend the residential and genuine function of housing.

In addition to the rent price limit for housing, the preamble refers to Decree-Law 3/2023, of November 7, 2023, on urgent measures regarding the urban planning regime for tourist use housing, which was approved with the aim of addressing the tourist use housing market, which has proliferated in Catalonia and significantly affects the permanent housing market.

Apart from tourist use housing, the preamble warns of another similar phenomenon that is leading to the withdrawal of housing from the market intended for regular lease. Specifically, it refers to seasonal leases.

It is stated that these leases evade price limits and, furthermore, neglect certain situations that have a need for housing, even if temporary, for specific reasons (studies, professional reasons, medical care, etc.), and cannot be included in the definition of leases for purposes other than housing.

Similarly, the preamble notes that real estate portals currently reflect an increase in the stock of properties intended for seasonal leases, when in reality they refer to permanent housing with temporary limitations. In fact, it states that in Barcelona alone, 3 out of every 10 properties rented are seasonal.

In summary, the preamble also refers to room leases as another strategy to evade price limits and, in turn, allows for abusive profits by dividing different lease contracts within the same dwelling.

Essentially, these two phenomena are what urgently require, according to the Government of Catalonia, a modification of existing regulation and its adjustment to ensure the supply of permanent housing.

The regulatory updates.

The Decree-Law requires indicating the cause or purpose of the lease in the contract and establishes that, otherwise, it will be presumed to be a permanent housing lease.

Additionally, it determines that the lease price limit will also apply to:

Temporary housing leases intended for professional, work-related, study, medical care, or similar purposes.

The Government considers that in these cases, the housing also meets permanent housing needs, even if for a limited time.

Moreover, these leases are subject to lease regulations regarding security deposits, rent determination, updating, increases for improvements, and assumption of general expenses and individual services.

Likewise, these regulations apply to lease contracts that only specify duration without establishing a temporary purpose.

In fact, it should be noted that the temporary purpose must be justified in the contract and properly evidenced by depositing such documentation, as well as the security deposit, in the competent registry. Therefore, it is presumed that the lease is permanent housing unless the temporary purpose is duly registered.

Room leases. From now on, the sum of the rent for all rooms in a housing cannot exceed the maximum rent that would apply if rented as a single unit. In this regard, rooms rented simultaneously are the ones taken into account.

In any case, seasonal leases, understood as those intended for leisure, vacation, recreation, or cultural purposes, remain exempt from price containment, and the corresponding maximum limit should not be applied in the contracts that are formalized. However, the new regulation imposes the obligation to justify this cause or purpose by providing the corresponding documentation along with the security deposit to the competent registry.

Furthermore, the regulation expands the obligations that real estate platforms must comply with when advertising lease offers. From now on, ads must indicate:

The lease reference price resulting from the index system, justified by the supporting document obtained for this purpose through the public consultation system.

The rent of the contract that has been in force for the last 5 years in the housing; and

When applicable, the landlord’s status as a large holder.

It should be noted that, according to the additional provision of the regulation, the content of lease advertisements must adapt to these provisions within 5 days of its entry into force.

In summary, the regulation establishes penalties for non-compliance with the new obligations imposed. Essentially:

It constitutes a minor administrative infringement:

Not providing the required information by the regulation in advertising, offers, and/or lease contracts; and

Renting housing for a price that exceeds up to 10% of the maximum applicable in the lease price limit.

It constitutes a serious administrative infringement:

Renting housing for a price higher by between 10 and 30% of the maximum applicable according to the lease price limit;

Not specifying the cause or purpose of the lease in the contract; and

Passing on to the tenants the real estate management expenses, as well as those related to contract formalization

It constitutes a very serious administrative infringement:

Renting housing for a price that exceeds 30% of the maximum applicable according to the lease price limit.

Providing a fraudulent qualification for the cause or purpose of the contract to avoid the application of the rights and guarantees recognized to the lessees when established by a final judicial sentence.

Finally, and with the aim of increasing the public housing stock, the Government of Catalonia adopts two additional measures:

It foresees a new case of preferential acquisition rights in favour of the Government of Catalonia: the transfer of housing located in areas of tense residential market, provided that the owner is a large housing holder registered in the Register of Large Housing Holders; and

It obliges the INCASOL to allocate the amount of the deposits it holds to investments for the public construction of housing, with special attention to lease developments and direct actions in old or urban renewal process subject areas. In any case, INCASOL is required to maintain an amount not less than 5% of these resources to ensure the effectiveness of payments for cancellations and refunds of deposits that occur.

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