Royal Decree-Law 21/2018 of 14 December on Urgent Measures in Housing and Rental Matters

OFFICIAL STATE BULLETIN No. 304 Tuesday, December 18, 2018 Sec. I. Page 124048 I. GENERAL PROVISIONS HEAD OF STATE 17293 Royal Decree-Law 21/2018, of December 14, on urgent measures in housing and rental matters. Spain faces important challenges in housing matters, which are currently linked especially to the difficulty of access to housing in the rental regime. The liberalizing reform of 2013, in addition to not yielding the expected results regarding the increase in housing supply and price moderation, has placed the tenant of a housing unit as a habitual residence in a position of weakness that does not respond to the minimum conditions of stability and security with which the tenant of a housing unit in possession of a valid title must be endowed. In this context, the State must reinforce cooperation with territorial administrations that have the responsibility to exercise their respective direct competence in housing matters, adopting a series of urgent measures that contribute to improving the regulatory framework to increase the supply of rental housing, balancing the legal position of the owner and the tenant in the lease relationship, establishing the necessary economic and fiscal incentives, and having the goal of guaranteeing the exercise of the constitutional right to housing. In this sense, it is worth recalling that Article 47 of the Spanish Constitution proclaims the right to enjoy a dignified and adequate housing and, at the international level, the Universal Declaration of Human Rights of the United Nations in its article 25 places housing as the object of a fundamental right of persons, as elementary and basic as food, clothing, or medical assistance. Faced with this challenge, the need to adapt the regulatory framework has led different social and political agents to push for modifications in the regulation, some of which are currently in parliamentary processing, and in which the urgency is highlighted and the gravity of the situation that many households are currently living in due to the housing problem is described. For all these reasons, it is necessary to underline that the requirement of extraordinary necessity and the urgency of the measures are supported and justified by solid reasons. The grave situation of economic and social vulnerability of a large number of families and households to face the payments of a housing in the market constitutes the first reason for urgency. According to Eurostat data, in 2017, more than 42% of Spanish households devoted more than 40% of their income to paying rent. This means that Spain is located 17 percentage points above the average value of the European Union and, if appropriate measures are not adopted, it will presumably increase, since the price of rents has increased in the last three years by more than 15% and, in some locations, the increase doubles that registered in Spain as a whole. This unequal and heterogeneous behavior of the housing rental market reveals the existence of various factors that influence this evolution, which constitute the second reason that justifies the urgency and extraordinary necessity of the measures. It is observed that the increase in market housing prices has been particularly intense in territorial environments of strong real estate dynamics characterized by greater tourist activity developed on the existing housing stock. This is evident if one analyzes the evolution of prices in recent years: the provinces in which housing prices have increased with greater intensity have been Madrid, Barcelona, Las Palmas, Balearic Islands, Malaga, and Santa Cruz de Tenerife. There is no doubt that, although there may be various factors that explain this increase in prices, the growing phenomenon of tourist rental of housing through p2p platforms incides in a context in which, in addition, the demand for rental housing is growing intensely. If one analyzes the evolution of rental in Spain in recent years, it is observed that it has gone from representing the tenure regime of 20.3% of the population in 2011 to 22.9% in 2017, according to the latest Eurostat data, which represents an increase of 12.8% and may represent around 700,000 more rental housing units in this period. This trend contrasts with the greater stability of the European Union average, in which rental has increased slightly from 29.6% in 2011 to 30.0% in 2017. The third reason that justifies the urgency and necessity of the measures is the scarcity of the social housing stock, which in Spain covers less than 2.5% of households, a figure that contrasts with significantly higher percentages of over 15% recorded in some of the main countries in our environment, such as France, the United Kingdom, Sweden, the Netherlands, Austria, or Denmark. This is due to different causes, among which is the orientation, for decades and almost exclusively, of public policies towards protected housing models in ownership regime. In this scenario, it is urgent to reverse this dynamic and eliminate certain normative and financing barriers that hinder the development of social rental housing promotions by the various Public Administrations, in order to provide society as a whole with an instrument in service of the effective fulfillment of the constitutional right to housing, which is especially necessary for those persons and households that have more difficulties accessing the market due to their scarce economic means. And, in relation to these situations of special vulnerability that many families and households live after years of profound economic crisis characterized by intense destruction and precariousness of employment, the fourth reason that justifies the urgency and extraordinary necessity of the measures is formulated. The number of evictions linked to rental contracts is growing at an annual rate very close to 5%. This negative evolution of the evictions practiced as a consequence of procedures derived from the Urban Leases Act contrasts with the progressive reduction of evictions derived from mortgage executions and with the evolution and general growth of the economy and employment in our country. Faced with this situation, it is urgent to adopt measures to correct the effects of the reform carried out in the regulation of lease contracts in 2013, extending the legal deadlines and introducing in the eviction procedure mechanisms that serve to respond to the grave situation that the most vulnerable households are living in, establishing deadlines and guarantees in the process. In addition, it is necessary at this point to ensure compliance with our commitments with international agreements on social rights in a matter that does not admit delay. In this sense, it is worth recalling the Opinion of the Committee on Economic, Social and Cultural Rights of the Economic and Social Council of the United Nations, adopted on June 20, 2017, in which, among other aspects, it urged the Government of Spain to ensure that its legislation and its application are in accordance with the obligations established in the International Covenant on Economic, Social and Cultural Rights. And, in particular, it pointed out the obligation to adopt the necessary measures to overcome the problems of lack of coordination between judicial decisions and the actions of social services in the eviction procedures of the habitual housing when it affects especially vulnerable households. Finally, the fifth reason that supports the urgency of the measures is the need to respond from the housing scope to the deficiencies in accessibility that people with disabilities and reduced mobility suffer daily, in a demographic context marked by a progressive and alarming aging of the population: it is predicted that, in the next decade, the population over 65 years old will exceed 10 million people. Therefore, it is urgent to attend to the dramatic situation that many households live in within communities of owners, which are affected by physical barriers and conditions that prevent them from exercising their rights. Taking into account the above, and without prejudice to future legislative initiatives that may complete the regulation in housing matters, addressing structural aspects, general principles, and guarantees that ensure equality in the exercise of this right throughout the State, the urgent adoption of a norm with the rank of law is essential to allow the modification of different regulatory provisions to adopt certain measures that enjoy a high degree of social consensus and do not admit delay, as they affect the exercise of the constitutional right to a dignified and adequate housing of many households. II The present royal decree-law is structured in four titles, and is composed of five articles, one additional provision, two transitional provisions, and three final provisions. Title I introduces the necessary reform of the regulation of housing lease contracts, through various modifications of Law 29/1994, of November 24, on urban leases, among which stands out the extension of the deadlines for mandatory extension and tacit extension of housing lease contracts. The deadlines established prior to the liberalizing reform operated by Law 4/2013, of June 4, on measures for flexibility and promotion of the housing rental market, are recovered. In this way, the mandatory extension period is established at five years, except in the case where the landlord is a legal person, in which case a deadline of seven years is fixed, thus responding to the differences that, both from the point of view of tax treatment, as well as the reality and characteristics of the lease relationship and the development of the activity, may exist in practice. As for the tacit extension, it is established that, upon the expiration date of the contract or any of its extensions, and once the mandatory extension period has passed, if there is no communication from either party establishing the will not to renew it, the contract will be extended for three more years, thus providing the tenant with greater stability that is no longer exposed to the annual extension established in 2013. In addition, modifications are established that affect the moment of signing lease contracts. On the one hand, the maximum amount of additional guarantees to the deposit that can be demanded from the tenant, whether through deposit or bank guarantee, is fixed at two months' rent, except for long-term contracts. And, on the other hand, it is established by Law that the expenses for real estate management and contract formalization will be borne by the landlord, when the landlord is a legal person, except for those services that have been contracted at the direct initiative of the tenant. In any case, the rental problem also arises from the insufficient supply of rental housing in our country, due to a series of practical obstacles that hinder the reaction from the supply to price signals, preventing the market from functioning properly. In the specific area of social or affordable rental, the number of housing units continues to be insufficient, partly due to the scarce use of public-private mechanisms, which allow the maximum impact on the rental market within the existing budgetary restrictions. The balanced solution to the rental problem is therefore only possible if the greater protection of the tenant is combined with energetic measures on the supply side. For this reason, the sole Additional Provision collects a mandate to the Ministry of Development to ensure that the supply of rental housing in Spain is dynamized; for this purpose, a set of actions to be carried out is entrusted to the Ministry, among them the negotiation with the sectorally competent administrations, using for this purpose all the instruments at its disposal. Also included in Title I is a technical clarification in the exclusion from the scope of application of the Urban Leases Act of the temporary transfer of use that entails the activity of the so-called tourist housing, suppressing the limitation that these must necessarily be marketed through tourist supply channels and specifically referring to what is established in the sectoral tourist regulations that apply.

OFFICIAL STATE BULLETIN No. 304 Tuesday, December 18, 2018 Sec. I. Page 124049 title II introduces modifications in the horizontal property regime in order to promote the carrying out of accessibility improvement works. First, the amount of the reserve fund of the communities of owners is increased up to 10% of the last ordinary budget and the possibility is established that such resources be destined to the carrying out of the mandatory accessibility works provided for in article Ten.1.b) of Law 49/1960, of July 21, on horizontal property. Second, the obligation to carry out such accessibility works is extended in those cases where the public aid to which the community may have access reaches 75% of the amount thereof. In the matter of tourist housing, Title II also includes a reform of the horizontal property regime that specifies the qualified majority necessary for communities of owners to limit or condition the exercise of the activity, or to establish special quotas or increase in the participation of common expenses of the housing, within the framework of the sectoral regulation that regulates the exercise of this activity and the regime of uses established by urban and territorial planning instruments. For its part, Title III incorporates a modification of the eviction procedure of housing when it affects vulnerable households, establishing that the determination of the situation of vulnerability will produce the suspension of the procedure until the measures that the social services deem appropriate are adopted for a maximum period of one month, or two months when the plaintiff is a legal person. In this way, the procedure is clarified, introducing greater legal certainty and specific measures to attend to those situations that require greater social protection. Title IV, which collects the measures in economic and fiscal matters, includes first the modification of the consolidated text of the Law Regulating Local Treasuries, approved by Royal Legislative Decree 2/2004, of March 5, introducing three measures in the Property Tax. First, the obligation to pass on the tax to the tenant is exempted when the landlord is a public entity in the case of rental of residential property with rent limited by a legal norm. Second, the regulation of the surcharge provided for permanently vacant residential properties is modified, by referring it to the corresponding sectoral housing legislation, autonomous or state, with the rank of law, in order that it can be applied by town councils through the approval of the corresponding fiscal ordinance. And, finally, a discretionary bonus of up to 95 percent is created for properties intended for rental housing with rent limited by a legal norm. On the other hand, to promote the market of urban leases as a basic piece of a housing policy oriented by the constitutional mandate enshrined in article 47 of the Constitution, it is convenient to improve the taxation of housing rental, in order to facilitate citizens the conditions of access to them. In this sense, an exemption is introduced for certain housing rentals in the consolidated text of the Law on Property Transfer Tax and Documented Legal Acts, approved by Royal Legislative Decree 1/1993, of September 24. Another of the modifications introduced in the consolidated text of the Law Regulating Local Treasuries is the expansion of the scope of financially sustainable investments to accommodate the possibility of carrying out actions in housing matters by Local Entities. This is a modification that will contribute to eliminating barriers and alleviating the serious deficit of social housing existing in our country. Finally, the royal decree-law includes an additional provision, three final provisions, and two transitional provisions. The additional provision collects the mandate to the Ministry of Development already mentioned, in order to dynamize the supply of rental housing. The first final provision establishes the competent titles that support the State to issue norms in the different matters, and the second and third final provisions enable regulatory development and establish the date of entry into force of the norm, respectively. The first transitional provision establishes that lease contracts signed prior to the entry into force of the royal decree-law will continue to be governed by what was established in the legal regime applicable to them. The second transitional provision establishes a period of three budgetary exercises for communities of owners to adapt to the new amount of the reserve fund. III The present royal decree-law respects the limits constitutionally established for the use of this normative instrument, as it does not affect the ordering of the basic institutions of the State, the rights, duties, and freedoms of citizens regulated in Title I of the Constitution, the regime of the autonomous communities, nor the general electoral law. It must be noted that the matters addressed have been modified in the past, attending to reasons of urgent necessity, through this instrument. Among them, Royal Decree-Law 2/1985, of April 30, on Economic Policy Measures, which modified the regulation of urban leases, can be recalled. In addition, the royal decree-law represents a constitutionally lawful instrument, insofar as pertinent and adequate for the achievement of the end that justifies urgent legislation, which is none other, as our Constitutional Court has repeatedly required, to provide for a concrete situation, within governmental objectives, which for reasons difficult to foresee requires an immediate normative action in a shorter period than that required by the normal route or by the urgency procedure for the parliamentary processing of laws. This norm complies with the principles of good regulation contained in article 129 of Law 39/2015, of October 1, on the Common Administrative Procedure of Public Administrations, in particular, the principles of necessity, effectiveness, proportionality, legal certainty, transparency, and efficiency. Therefore, in the whole and in each of the measures adopted, the circumstances of extraordinary and urgent necessity required by article 86 of the Spanish Constitution as enabling prerequisites for the approval of a royal decree-law concur, by their nature and purpose. In virtue thereof, in use of the authorization contained in article 86 of the Constitution, at the proposal of the Minister of Development and prior deliberation of the Council of Ministers in its meeting of December 14, 2018, I HEREBY ORDER: TITLE I Measures for the reform of the regulation of housing lease contracts Article first. Modification of Law 29/1994, of November 24, on urban leases. Law 29/1994, of November 24, on urban leases, is modified as follows: One. Paragraph 2 of article 4 is drafted in the following terms: "2. Respecting what is established in the previous paragraph, housing leases will be governed by the pacts, clauses, and conditions determined by the will of the parties, within the framework of what is established in title II of this law and, subsidiarily, by what is provided in the Civil Code. Leases of housing whose surface area exceeds 300 square meters or in which the initial rent in annual computation exceeds 5.5 times the interprofessional minimum wage in annual computation and the lease corresponds to the entirety of the housing are excepted from what is thus stated. These leases will be governed by the will of the parties, in their defect, by what is provided in Title II of this law and, subsidiarily, by the provisions of the Civil Code." Two. Letter e) of article 5 is drafted in the following terms: "e) The temporary transfer of use of the entirety of a furnished and equipped housing in conditions of immediate use, marketed or promoted in tourist supply channels or by any other mode of marketing or promotion, and carried out with profit purpose, when it is subject to a specific regime, derived from its sectoral tourist regulation." Three. Article 9 is drafted in the following terms: "1. The duration of the lease will be freely agreed by the parties. If this is less than five years, or less than seven years if the landlord is a legal person, upon the expiration date of the contract, it will be extended obligatorily in annual periods until the lease reaches a minimum duration of five years, or seven years if the landlord is a legal person, unless the tenant manifests to the landlord, with at least thirty days' advance notice to the expiration date of the contract or any of the extensions, their will not to renew it. The period will begin to count from the date of the contract or from the date the property is made available to the tenant if this is later. It will be for the tenant to prove the date of making available. 2. Leases for which no d

OFFICIAL STATE BULLETIN No. 304 Tuesday, December 18, 2018 Sec. I. Page 124050 cve: BOE-A-2018-17293 Verifiable at http://www.boe.es

OFFICIAL STATE BULLETIN No. 304 Tuesday, December 18, 2018 Sec. I. Page 124051 cve: BOE-A-2018-17293 Verifiable at http://www.boe.es

OFFICIAL STATE BULLETIN No. 304 Tuesday, December 18, 2018 Sec. I. Page 124052 cve: BOE-A-2018-17293 Verifiable at http://www.boe.es

OFFICIAL STATE BULLETIN No. 304 Tuesday, December 18, 2018 Sec. I. Page 124053 cve: BOE-A-2018-17293 Verifiable at http://www.boe.es