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New Catalan rental law goes into force tomorrow, Tuesday

On Wednesday 9 September, the Catalan Parliament passed a new law capping rent that will regulate the rent charged for properties with residential use.

After being published in the Official Gazette of the Government of Catalonia (DOGC), Law 11/2020, of 18 September on urgent measure to cap leases on residential properties will go into force tomorrow, 22 September.

The law only applies to leases on residential properties signed in Catalonia in areas where the Government has classified the housing as market as being in a ‘tense situation’, which is a total of 60 towns with over 20,000 inhabitants.

The new regulations, promoted by the Sindicat de Llogateres tenants’ union, establishes that the rent cannot be higher than on the previous contract. Likewise, the rent on new leases cannot be higher than the Government’s price index, published by the Housing Agency (http://agenciahabitatge.gencat.cat/indexdelloguer).

In new-build residential properties or those that have undergone a large-scale refurbishment, the Law does not apply for the first three years after it goes into force (22 September 2023). After these three years, and for five years after the Final Certificate of Works is issued, the rent agreed on at the beginning of the lease cannot be higher than the highest benchmark (except when it is subsidised, in which case it is subject to the same limits as any other lease).

If the Spanish central government files a suit with the Constitutional Court challenging the constitutionality of this law, it would be suspended.

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