Wednesday, May 18

The Constitutional annuls the Catalan law that limited rentals in areas with high prices

The Constitutional Court has annulled more than a dozen articles of the Catalan housing law of 2020 which, among other things, placed limits on the rental of homes in “stressed” areas or with high prices in general. The magistrates have unanimously partially estimated an appeal presented by deputies of the Popular Party, understanding that the Generalitat de Catalunya invaded state powers in housing matters by approving this regulation that affected 60 municipalities throughout the Catalan territory.

Catalonia, the first community that limits the rental price by law despite doubts about its constitutionality

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The Constitutional Court, in any case, explains that its sentence will have consequences on the rental contracts that are signed from this moment on, but not on those that are already in operation. “In this way, it does not affect consolidated legal situations, based on the principle of legal certainty and the legitimate aim of seeking stability in pre-existing contractual relationships. The effects will be for the future, so the housing lease contracts entered into with prior to the time of this resolution remain in its terms”, says the Constitutional.

The law was in force in Catalonia since September 2020 and was a pioneer in Spain when it came to limiting rental prices. Approved by ERC, Junts, Comuns and CUP, it was supposed to satisfy a historical demand of the movement for the right to housing. Since it was approved, and despite warnings from the real estate sector, prices had dropped slightly and the market had not stagnated, although experts point out that this could also be due to the impact of the pandemic.

Currently, some 60 Catalan municipalities, including all the big cities, were considered a tight market and therefore had regulated rental prices.

The articles that the Constitutional Court lays down are those that constituted the basis for the limitation of rental prices. For example, the number 6 that prevented the rent in tense areas from being higher than the reference price for a house in the same environment, the number 7 that established those reference prices, the number 12 that allowed the tenant to recover the amounts paid in excess and with interest or numbers 15 and 16.2 that detailed serious and minor infractions for tenants who failed to comply with this regulation. Several additional, transitory and final provisions are also annulled.

As reported in a statement by the court of guarantees, the plenary session has seamlessly accepted Ramón Sáez’s proposal, one of the most recent additions to the Constitutional Court. These precepts “represent an invasion of the autonomous community in the powers of the State” that the Constitution recognizes so that it establishes “the general management criteria of the private contracting sector in those autonomous territories that have their own legislation.” This centralization of housing regulation, says the Constitutional Court, “is based on the need to guarantee a common denominator in the principles that should govern contractual obligations, which is achieved when the general categories are the same throughout the national territory” .

The Tenants’ Union, one of the promoters for the law to reach Parliament, has asked to “disobey” the decision of the Constitutional Court in an emergency press conference this Thursday in the Catalan Chamber. The entity has appeared to request that a new rule be drawn up to replace the one that the High Court has knocked down. “We will do it again, we will regulate rents again,” explained spokeswoman Carme Alcarazo after assuring that the law has allowed the price of housing to be reduced without reducing its offer. Representatives of ERC, Junts, En Comú Podem and the CUP have also criticized the judicial decision in response to an appeal by the PP.