Urban leases

The Supreme Court (TS) has rejected the claim of a landlord considered a " large holder " who was seeking compensation from the State for the legal limitation applied to the annual increase in rental housing prices.

The case arises from art. 46 of RDL 6/2022, which was initially intended for the period between 31-3-2022 and 30-6-2022, but was later extended until 31-12-2022 through two other Royal Decree Laws. During that time, the regulation established a maximum limit on rent updating. In the case of large holders , this limit was always applied, whether there was an agreement with the tenant or not, the increase could not exceed the annual variation of the Competitiveness Guarantee Index (IGC) on the update date. For lessors who were not large holders, the first thing required was what was agreed between the parties and, if there was no agreement , the IGC was also consulted.

The claiming landlord argued that this harmed him because in his contracts it had been agreed to update with the CPI, and the IGC cannot exceed 2% (L 2/2015), so the rent increased much less than expected. That's why he argued that it was an "expropriatory" measure that should entitle him to compensation according to the LRJSP art. 32. 3 and 4.

The Supreme Court denies it as it does not see an expropriation , but a temporary delimitation of the lessor's powers within the residential lease, without emptying the right of ownership or its "essential content." It also rejects the measure being unconstitutional which it considers justified to protect tenants economically, in a context of inflation (with the CPI reaching 10. 8% due to the war in Ukraine), and understands that it does not violate either the right to property, the limits of the decree-law, or legal certainty.

If you find yourself in a similar situation or have any dispute related to a housing lease, our professionals can analyze your case and take the most appropriate actions to defend your interests