On 9 September 2020 the Parliament of Catalonia passed the Rent Price Regulation Act, which permits freezing and lowering rents in 61 Catalan municipalities where it has been considered that the market is under tension. This bill entered Parliament at the proposal of the Sindicat de Llogateres (Union of Female Tenants) with the support of 4,000 social and cultural organisations and was passed with the votes in favour of JxCat, ERC, Catalunya en Comú and the CUP.
In order better to publicise how this Act works, the Barcelona Network of Youth Information Points has organised an online meeting with the advisor on shared housing of the Network of Youth Information Points, Mari Carmen Jiménez; the lawyers of the Housing Office of Nou Barris, Maria Romero and Anna Vàzquez, and the representative of the Union of Female Tenants, Jordi González. This talk forms part of the cycle “Connected Youth”, a series of online talks aimed at publicising the Barcelona City Council’s youth services and facilities and answering young people’s doubts and queries. On this occasion, the session focussed on the Rent Price Regulation Act. Below we summarise the most important points discussed.
Rent Price Reference Index
The first key concept for understanding the Rent Price Regulation Act is the Rent Price Reference Index, which serves as the basis for calculating the maximum price to be paid by the tenant and is the average of the rents in a specific area calculated on the basis of the guarantee bonds deposited in the Incasòl institution. It can be calculated on the website of the Catalonia Housing Agency by introducing certain data such as the year of construction, the habitable square metres recorded in the certificate of habitability and the state of the building, and by answering certain questions such as whether the home has a lift, storeroom or furniture.
Freezing and lowering of prices
The goal of this Act is, as was explained by the representative of the Union of Female Tenants, Jordi González, to halt the exorbitant rise of rents which has occurred in the last few years and to prevent, at the end of the contract, the tenant receiving a bureaufax announcing a rent rise of €200 or €300 which they cannot meet.
The price of the rent, therefore, will have to be frozen or lowered, depending on the previous situation of the home:
– If there was no previous contract or it was more than five years old, the price of the new contract has to be that marked by the Reference Index.
– If there was a previous contract signed less than five years ago, it is necessary to take into account the price of the previous contract and that of the Reference Index and establish the lower of the two. This price will be reviewed in accordance with the Competitiveness Guarantee Index, an index similar to the Consumer Price Index (IPC).
Exceptions to the Act
However, the Act contemplates a series of exceptions. It excludes apartments leased to relatives, those which were under official protection and enter the free market, or cases in which the lessor is in a situation of vulnerability.
The amount of the rent can also be increased by up to 5% if at least three requirements among a series of improvements included in the Act are fulfilled, for instance that the home is furnished, has a heating or cooling system, a parking space or community zones, among others.
The rent can also be increased by up to 20% above the Reference Index if improvement works have been carried out during the last year. These works must constitute improvement, not maintenance, and must be related to safety, habitability, energy efficiency and comfort. The increase will be linked to the amount the owner has spent on the works, subtracting any grants the owner has been able to obtain and adding the interest of money, all justified by means of invoices, projects and planning permissions.
Obligations and penalties
A key point of this Act is information. The advertisements of apartments and the contracts have of necessity to include the Reference Index and, if there is a previous contract, the price that was being paid and the date of the contract. If this information is not included, the owner may authorise the new tenant to a consult it by way of Incasòl. Not including this information in the advertisement or the contract is irregular and may be penalised.
The Act incorporates a penalty system with fines which can range from 3,000 to 90,000 euros. If the tenant signs a new contract and pays more than what is established by the Act, they can submit a claim by way of the Catalonia Housing Agency and recover the excess amount paid plus interest. It will have to be seen how all these penalties will be applied, since the Act is very recent, as was pointed out by the lawyers of the Housing Offices and the representative of the Union of Female Tenants. This Union also pointed out that the Act recognises entities such as itself as mediators and consequently that organising with neighbours and entities for the defence of housing can also be an option for negotiating in the event of irregular practices by landlords.