Tenants will no longer pay agency comission . Spain’s new housing law – La ley de la vivienda.

By Chat GPT and Will

Under the new Housing Law, landlords of rental properties will have to pay the agency’s commission.

The Spanish Government’s new Housing Law – “La Ley de la Vivienda” focuses on rental properties, which have been a hot political issue in Spain. In order to make housing more affordable, the government has included a series of measures in the agreement reached with Esquerra Republicana (ERC) and EH Bildu that affect both tenants and landlords.

One of the most significant measures is that the rental price cap will be consolidated. According to the agreement, the 2% limit on rent increases will be maintained this year, and the cap will increase to 3% in 2024. By the end of next year, a new reference index applicable throughout the country will be created.

Thus, the CPI will no longer be the reference index for the annual rent update of contracts, and the new indicator, which will be elaborated by the National Institute of Statistics (INE), aims to be more stable and lower than the CPI’s evolution. It will also be applicable to those contracts signed before the law that were subject to the CPI.

Landlords will pay agency fees Another novelty of the new law is that landlords of rental properties will have to pay the fees of the real estate agencies. Specifically, the text states that “real estate management expenses and contract formalization expenses will always be borne by the lessor” regardless of whether they are individuals or legal entities.

Current legislation states that real estate management and contract formalization expenses are borne by the lessor when it is a legal entity, i.e., a company. However, it does not refer to individual landlords.

With the new regulation, tenants will not have to pay the agency’s fees when the landlord has contracted the agency’s services. This extra payment, which has been common until now, means that the tenant can end up paying one month’s rent plus VAT to the agency and one month’s rent as a security deposit to access the rental property.