Law no. 56/2023 was published on October 6, 2023, which approves measures in the field of housing (and to which we refer in case of omission of reference to the law to which the articles refer).
I.
One of these measures is the definition of exceptional and transitional rules regarding the value of rents in new rental contracts, subsequent to contracts signed in the last five years (Article 1(1)(d)).
In this context, the respective Law reserves Chapter IV for Security in the rental market, and Article 34 [under the heading Rent for new rental contracts] provides that:
a) the initial rent
b) of new rental contracts for residential purposes
c) that relate to properties for which there have been rental contracts in force in the five years prior to the entry into force of this law [i.e. October 7, 2023 under the terms of Article 55]
d) may not exceed the value of the last rent charged on the same property in a previous contract, applied with a coefficient of 1.02 [i.e. 2%].
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II.
Notwithstanding this “general rule”, there are two exceptions regarding the maximum allowable increase, and the exception to the application of the respective regime:
II.a) With regard to the maximum amount of the admissible increase:
i. In the event that the rent has not been updated in the last three years under the legally admissible terms and in accordance with the provisions of Article 1077(1)(d) of the Civil Code, the aforementioned increase in rent in Article 1077(1)(d) may be increased by the amounts corresponding to such updates; and
ii. In the event of extensive refurbishment or restoration work, as certified by the City Council, the initial rent may also be increased by the amount of the costs borne by the landlord, up to an annual limit of 15%.
II.b) Regarding the application of the respective regime:
Article 34(2) provides that article 34 shall apply to contracts that exceed the general price limits for rent by type set out in tables 1 and 2 of annex i to Ministerial Order no. 176/2019 of June 6, with table 1 referring to the correspondence of municipalities by bracket, and table 2 to the general price limits by type, in euros, by bracket.
If interpreted in the opposite way, not exceeding the respective limits, the rules imposed under the above terms will not apply.
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III.
Article 34(4) also states that the coefficient to be considered for the year 2023 for updating rents will be 1.0543.
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IV.
Finally, it should be noted that, with regard to the effects of these aforementioned rules, Article 54(2) stipulates that the provisions of Article 34 shall take effect until December 31, 2029.
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