As all the predictions indicated, the validation of the decree-law that contained the extension of the rent price for housing for two years has not occurred and, finally, it has been repealed for not obtaining a sufficient majority in the Congress of Deputies. Now, a horizon of complex scenarios is opening up for tenants and owners that anticipates possible litigation.
To unravel them, Demócrata has consulted two housing specialists and, specifically, in law, to analyze what may happen from now on, how far the extensions may go, possible lawsuits, and also evictions, in a framework without consolidated jurisprudence and with a slow-responding justice system.
Julián Salcedo, doctor in Economics and doctoral student in Law from the UCM, president of the Forum of Real Estate Economists of the College of Economists of Madrid and, among other positions, vice-president of the Governing Council of Urbanism and Territorial Planning of the General Council of Economists of Spain, warns that, in his opinion, the drafting of the aforementioned decree leaves the judicial doors open to those who claim their extensions, even if they are not legally entitled to them.
In his opinion, it is evident that the tenant who, during the validity of the decree-law, has requested the extension from the owner of the dwelling and, provided that their contract expires during that period of validity of the decree, will have the right to the extension for two years. “That is unquestionable,” he emphasizes.
It doesn't matter if the homeowner has received the certified letter that Sumar has asked tenants to send or not. What governs —Salcedo maintains— is the verifiable request, regardless of whether the homeowner has responded to that certified letter or not.
What happens when the deadline has not passed?
Now then, what happens when the tenant who has requested the extension by burofax has not yet had their rental contract expire and does so after the decree expires? According to Salcedo, in that case, different situations can arise: the judge may assess the case quickly and dismiss the tenant's right, and if the tenant does not want to leave the property, the owner can initiate eviction proceedings.
It can also happen —he adds— that the owner does not want to go to court and decides to agree with the tenant on the conditions of that extension. However, he points out that, taking into account the speed of Spanish justice and the collapse of many courts, lawsuits could be filed by tenants without the right to an extension, whose proceedings could be prolonged beyond the period of the measure itself.
A third scenario is that the owner decides to initiate eviction proceedings, with an added factor: judicial rulings can be disparate. This could lead to contradictory judgments that eventually end up in the Supreme Court through a cassation appeal to establish a precedent.
How does Housing see it?
This Tuesday, sources from the Ministry of Housing and Urban Agenda admitted to Demócrata that they are entering “uncharted territory,” as “there is no jurisprudence on a measure of this type that has lapsed.” However, they are confident that “the right to housing will prevail over any other consideration.”
In the same vein, although with more optimistic nuances, sources from Sumar point out that, in their opinion, there is no doubt that “those who have requested it cannot be denied”. Of course, they add that “it's another thing if there's a fight in the courts”, something they take for granted.
In line with this, the Financial Users Association (Asufin) already anticipated this Tuesday, before the vote, that the Congress's rejection of the housing decree “will not prevent thousands of tenants from having been able to shield their contracts” against the rising cost of rent in the current context.
The extension in the period of validity of the decree
For her part, Matilde Cuena, professor of Civil Law at the Complutense University and an authority on the subject, maintains that the requests for extension made during the validity of the decree-law must be maintained when the contracts have expired in that period.
However, when it comes to contracts that have not expired during the term of the decree-law, he believes that the mere fact of requesting the extension does not imply that the landlord has the obligation to accept it.
Cuena considers this decree to be "an outrage," as he warns of "a high constitutional risk" derived from a rule without sufficient backing and from the effects it may cause once repealed.
In their opinion, and beyond ideological bias, judges will have to resolve quickly in case they are faced with lawsuits from tenants who are not entitled to an extension.
"Legal uncertainty"
For Salcedo, managing partner and founder of CEFyRE, S.L. (Consultoría, Estrategia, Formación y Real Estate) and of ALFYRE, S.L. (Asesores Legales Financieros y Reestructuraciones Empresariales), the situation of tenants and, especially, of young people who cannot access housing due to the high price of rent and even more so of purchase, is “more than incomprehensible”.
However, it maintains that, like the employers' associations CEOE and Cepyme, this initiative by Sumar does nothing but increase legal uncertainty and cause a withdrawal of rental supply, reflected not only in those whose prices are increased, but in that million people looking for housing and not finding it.
This type of measure —insists Salcedo— raises the selection of tenants and increases prices, as landlords will demand a higher risk premium and, otherwise, will withdraw their homes from the rental market.
The "negative impact" on the price of rents
From an economic standpoint, Mikel Echevarren, president of Colliers Spain and Portugal, regarding the market impact, believes that "a percentage of these homes will not be put back up for rent due to threats of government intervention and the rest will be renewed at market rents which should be around 20% to 30% higher than current ones, as they have been subject to an IPC determined by the current Executive for an average of five years, while the market rose by more than double digits annually in the same period".
In Echevarren's opinion, the repeal of this decree "is very good news for homeowners who have suffered government intervention in the last five years."