Legal loopholes make rent control difficult and can leave it inoperative

The legal loopholes in the housing law can leave rent control inoperative: the Housing law does not include a sanctioning regime, so in the event of non-compliance, if the owner is an individual, those affected in most cases will only be able to go to the courts.

Oliver Thansan
Oliver Thansan
01 April 2024 Monday 10:20
4 Reads
Legal loopholes make rent control difficult and can leave it inoperative

The legal loopholes in the housing law can leave rent control inoperative: the Housing law does not include a sanctioning regime, so in the event of non-compliance, if the owner is an individual, those affected in most cases will only be able to go to the courts. But in addition, the administration will not check the key aspects in setting the price, such as whether the owner is a large holder, the rent that was paid in the previous contract, or the real quality of the home.

Spokespersons for the Territori Department acknowledged that “in the first days we have had problems and doubts when applying the law, due to the lack of a sanctioning regime,” but they advanced that “we will try to explore other avenues” to guarantee that the index is effectively executed. , such as "applying the consumer code and the Catalan housing law in aspects that were not declared unconstitutional, for example in the obligation to report the price of the old contract and the index", a breach that will entail sanctions for all types of owners .

In rentals made by individuals, which according to Territori in Catalonia represent 85% of the total, the law allows the rent from the previous contract to be applied as rent, updated with the CPI. The owner must provide that figure, but “Incasòl will not verify that the rental income adjusts to the limits with respect to the previous contract. Nor does it comply with the limits of the index, in the case of large holders,” said Territori spokespersons, since it does not have the competence or the means to do so, although they did not rule out providing it with additional means and competences in the future. Enric Aragonès, spokesperson for the Llogaters' Union, pointed out that the tenant may ask Incasòl to inform them of the rent of the previous contract. “The request is made by email and the Institut can be overwhelmed if it receives many requests,” he acknowledged.

If the owner is a large holder, that is, the owner of five or more homes, the tenant will also have to find out by tracking the Property Registry, since the Government never created the register of large holders that the 2022 law provided for. of social emergency in the field of housing. “In the end, in practice, the obligation has been transferred to the agencies to ask the owners of the apartments we rent about the previous rent, the existence of other homes they own, and even about personal matters” such as their marital regime. said Guifré Homedes, general director of Amat Immobiliaris.

The status of large holder, in fact, may depend on the owner's marital regime: whether it is a separation of property or a community property. Thus, according to the spokespersons of the Ministry of Housing and according to the Guiding Criteria approved by the judges of first instance of Barcelona to apply the state housing law, “in the case of shared ownership, the properties of an aliquot part will be included in the calculation greater than 50%”. For those responsible for the Territori Department, however, the mere ownership of an undivided share should be counted as real estate, since otherwise it would be “an attempt to circumvent the law.”

Territori recognizes that there will be no way to objectively determine the state of conservation or the quality of the building, which determines the price range of the index, which is why, according to the councilor, Ester Capella, lamented, “all contracts will end up being signed in the highest level of the range.”

Private owners, regardless of the homes they own, will be excluded from all the “sanctioning formulas” that the Generalitat is trying to “explore”, according to spokespersons for the Catalan Consumer Agency. "We only have powers to act in those cases in which what we call 'consumer relationship' occurs", that is, when there is on the one hand a consumer and on the other a company or professional."

“The tenant may go to court to report non-compliance with the law, and surely the private owner will correct his position with the mere threat of a lawsuit, because he knows that he will lose it,” says Enric Aragonés. The lawsuit would have to be presented in the civil courts, explains Miquel Miró, a lawyer specialized in real estate law, “an expensive route since he needs a lawyer and attorney.” In his opinion, “the tenant's other option may be to pay what he considers fair and challenge the owner, if he is in disagreement, to initiate an eviction procedure,” he points out, which is why he advances that the entry into force of The law will trigger conflicts between owners and tenants and the judicialization of rent.

Aragonès acknowledged that ultimately the effectiveness of the law will depend enormously on the tenants and regretted that their misinformation is the biggest obstacle to its effectiveness. “Even the Barcelona City Council launched an erroneous information campaign, saying that from now on the index would have to be applied to the contracts, when it is often higher than the rent of the previous contract, which is the one that has to be applied updated. ", lament. Therefore, in his opinion, “many owners are taking advantage of the confusion to raise rents.”

Catalan law is especially strict with agencies that fail to comply with the regulations, which can be sanctioned even with the cancellation of their registration in the Agency registry, a mandatory requirement to operate in Catalonia, which is why agencies are becoming the main guarantors that the apartments offered by individuals comply with the legislation, said sources from the Catalan College.