Modifications in Urban Leasing Act (LAU)

Many people rent flats in the Catalan capital, but most people do not know the Urban Leasing Law (Ley de Arrendamientos Urbanos or LAU) that governs this type of operation. A law is always subject to modifications, and depending on several factors, it undergoes changes every now and then. It is important to know these changes, in case you are currently looking to rent a property. There are important modifications in the Urban Leasing Law, that have recently gone into effect nationwide. Today ShBarcelona is going to talk to you about the new Urban Leasing Law that has been updated in 2019. Do not miss any of the small print!

Specific changes in the law of urban leases

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The changes that have taken place in the Urban Leasing Law are very significant and aim to protect the tenant. It is important to know the details, in order to make use of them. In turn, the owners, should also know what changes have occurred in this regard, to know what to expect. First of all we must be clear that in case of the landlord being a natural person (private person), the mandatory period of extension is extended in favor of the tenant, from 3 to 5 years. On the other hand, in case of the lessor being a legal entity, the mandatory period of extension is extended in favor of the tenant, from 3 to 7 years. It is also interesting to know that the mandatory period of extension foreseen in article 10 of the LAU (Urban Leasing Law) is extended from 1 to 3 years.

Related article: Long Term Rentals

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Another important fact, is that in case of the lessor being a legal entity, costs of real estate management fees will be the responsability of the lessor, except in the case of services that have been contracted at the direct initiative of the lessee. On the other hand, if the lessor is a legal entity, the value of the additional guarantee (bond) may not exceed 2 monthly installments of the rent in contracts of up to 5 or 7 years. In turn, the principle of freedom of covenant is valid in housing leases with a surface area of more than 300m², or with an initial rent higher than 5.4 times the minimum interprofessional salary. In addition, a new concept in article 18 of the Urban Leasing Law (LAU) defines a limit in the CPI in reduced income contracts. It is also important to be clear that a new right of withdrawal is introduced in favor of the administration, in certain cases of joint sales and, finally, something very important to take into account: ITP’s exemption from permanent housing rentals is established. As you can see, most of the changes are intended primarily for the protection of the tenant, with the intention of ending certain malpractices, that may have taken place in some cases with tenants leasing their only and main residence.