When renting, one of the biggest concerns that tenants have is that the landlord raises their rent. And although these increases are allowed by law, the same law regulates when and how much they can be made, so the landlord cannot raise the price as much as he wants, at least while maintaining the same contract.
This has been clarified by the expert leasing lawyer, Alberto Sánchez, through a video published on his social networks LegalMente. In it, Sánchez resolves one of the most common doubts for tenants and owners when a rental contract turns five years old: can the landlord freely raise the price when renewing?
His answer is a resounding no. “When a contract of rental housing reaches its fifth year and it is extended, it is the same contract that you signed at the time, it is not a new contract,” explains the lawyer.
To set the price he wants, a new contract must be signed.
When the contract reaches its minimum term of 5 years, if the parties decide to renew it, the landlord cannot raise the rent as much as he wants, since he is obliged to follow the current law, and specifically, what is established in article 18 of the Urban Leasing Law.
“To put the rent he wants it has to be in a completely new contract, not in an extension,” Sánchez insists, thus dismantling one of the arguments most used by some owners to justify significant increases at the end of the first years of rent.
Furthermore, it warns that in areas declared to be a stressed residential market, owners cannot even set the rent they want at the beginning of a new contract, and the regulations limit the price, even in that case.
Therefore, if the contract is extended after the fifth year, it remains exactly the same document and the most that the owner can increase is the CPI (Consumer Price Index).