Congress rejected on Tuesday the royal decree promoted by the coalition government that allowed extending, under the same conditions and for a maximum of two years, rental contracts expiring before December 31, 2027. The regulation, which came into force on March 21 after its publication in the Boletín Oficial del Estado (BOE), failed to gather the necessary support for validation and lapsed just four weeks later. The effects of its repeal are unclear, according to various legal sources consulted, which opens a period of uncertainty for tenants who had already taken advantage of the moratorium after requesting it via burofax. These are the main unknowns.
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Is the extension guaranteed?
This is the main doubt faced since Tuesday by tenants who, in the last month, sent a burofax to their landlords to request continued occupancy under the royal decree that has just lapsed. The answer is not unequivocal. In the legal field, there is a disparity of criteria, which prevents offering a definitive conclusion on the effect of the repeal of the regulation.
For Javier Rubio, a housing lawyer at the Centro de Asesoría y Estudios Sociales (CAES), the requested moratoriums remain fully valid. His argument is that if the tenant exercised their right when the regulation was in force, subsequent parliamentary rejection cannot annul the effects already produced. “It doesn’t matter that this legislative framework no longer exists,” says Rubio, who uses a classic example to illustrate it: “Since 1985, it has not been permitted to sign old rent contracts, and that has not caused those who signed them before to lose that right.”
However, the fact that the extension was included in a royal decree approved to mitigate the economic effects of the war in Iran — with potential consequences for the end of next year that are difficult to anticipate — introduces an additional factor of legal uncertainty for some experts. They point out that the effects of the extensions will occur beyond the time the regulation that protected them was in force. And this formulation could lead to the moratoriums becoming ineffective.
Until the courts rule, it will not be possible to know with certainty what scenario affected tenants will ultimately face.
How many rentals are up in the air?
It is not possible to know how many tenants requested the contract extension because there is no official registry that counts the burofaxes sent to landlords. In the last four weeks, however, the websites of various tenant unions have registered a notable increase in traffic, as well as hundreds of downloads of application forms, which points to an interest in the measure. Even so, it is impossible to quantify its real scope. According to a study by the Ministry of Consumer Affairs, around one million rental contracts expire before December 31, 2027. This is, however, an upward estimate, as the calculation is based on contracts signed after the pandemic that would now be coming to an end, without discounting those that could have been terminated early for various reasons.
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Can the Government propose the moratorium again?
The context in which the Government, at the urging of Sumar ―which even staged a walkout―, incorporated these measures aimed at easing tension in the rental market was a royal decree-law approved to address the economic effects of the war in Iran. Its validity, therefore, was subject to subsequent validation by Congress. Having failed to secure that majority support, the moratorium lapses and cannot be processed again under the same terms. Despite this, according to various sources consulted, the Executive’s intention is to “continue insisting” on this type of initiative, considering that the housing crisis constitutes a first-order problem, a perception shared by citizens, as reflected in the latest CIS barometers.
Are there any other measures that lapse?
In addition to the contract extension, the royal decree set a 2% limit on the annual revaluation of rents. With the regulation having lapsed, this cap automatically ceases to apply. This allows landlords to increase rents each year of the contract’s validity according to what they have agreed with tenants, but the Urban Leases Law states that this update cannot exceed the CPI. As the energy crisis has triggered inflation, it is currently well above 2%. In March, it was 3.4%.
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