Will the second time be the charm? This is what tenants and landlords who are in the process of renting a home these days, or weeks, should think. In December 2018, the Council of Ministers approved the Royal Decree-Law 21/2018 on urgent measures in housing and rent, which was in force for less than a month, when it was overturned in January in the Congress of Deputies. Now, in one of the last Council of Ministers of this legislature, a new Royal Decree on housing rent has been approved, and will enter into force after its publication in the Official State Gazette (BOE).

Among the novelties, it is worth mentioning, for example, the extension of the minimum legal period that a tenant can stay in the dwelling or the limits on deposits.

If you want to know the main changes introduced by this new Royal Decree on housing rentals, read on!

Duration of the rental contract

With the entry into force of the aforementioned Royal Decree, Law 29/1994, of November 24th, on urban leases will be modified in relation to the duration of the lease, which will be extended from three to five years.

As has been the case up to now, the duration of the contract may be freely agreed upon by the parties, although, when it is less than these five years, the contract will be compulsorily extended for annual periods until the minimum duration now fixed for lease contracts is reached. This five-year term is increased to seven years in cases where the lessor of the property is a legal entity, i.e., a company or corporation.

In this sense, it is a matter of returning to the five-year duration (provided that the lessor is a natural person) that was already established before the entry into force of Law 4/2013, on flexibility and promotion of the housing rental market in 2013.

Extension of the lease

Until the entry into force of this regulation, it was established that the contract was automatically extended for one year (after three years) if neither of the parties (landlord or tenant) gave six months’ notice of the intention to terminate the rental contract.

Now, with the recent regulation approved by the Council of Ministers, the provisions of Royal Decree Law 21/2018 of December 14 are recovered. Thus, since the new Royal Decree is in force, with the arrival of the expiration date of the contract, once these five years have passed, or seven in the case of the lessor being a legal entity, if neither the lessor nor the lessee expresses to the other party the intention not to renew the contract, this will necessarily be extended for three more years.

Deposit and additional guarantees of the rental contract

In relation to the deposit and additional guarantees of housing leases, the regulations set two monthly rent the maximum amount that can be requested as an additional guarantee to the deposit, which must be one month’s rent.

The management costs when the lessor is a legal entity

One of the changes of this Royal Decree with respect to the previous one approved in December of last year has to do with the payment of the costs of formalization and management of the rental contract. With the previous regulation, these expenses were paid by the lessors who were legal entities, unless otherwise agreed. Now, with this new Royal Decree on rent, these expenses of real estate management and formalization of the lease contract are borne by the lessor, if it is a legal entity.

Notice of non-renewal of the rental contract

When the Royal Decree approved in the last Council of Ministers comes into force, the period of notice for non-renewal of the lease will be 4 months for owners and 2 months for tenants. Until now this period was set at one month.

Recovery of the property by the owner

With the new regulations on rent, the causes of necessity alleged by the owner to recover the rented property must be stated in the lease. Specifying, when the time comes, which of those causes is alleged to recover the housing.