MADRID, 28 Nov. (EUROPA PRESS) -

The general coordinator of the National Federation of Real Estate Associations (FAI), José María Alfaro, has warned that, due to the limitation of the 2% increase in rent, many landlords are choosing not to renew the extensions to their tenants in their next expiration.

Alfaro indicates that in contracts prior to March 2019, if there was no complaint by any of the parties, the contracts were extended for annual periods with negotiated price increases. But, due to the new limitation, owners can terminate the lease on the annual expiration date, create new leases not subject to the 2% cap, and update the rent to market rate.

The general coordinator of the FAI has contextualized that the contracts prior to the entry into force of the Lease Law of March 2019 were signed for 3 years according to current regulations and are now in the voluntary phase of annual extension. Likewise, he has stressed that only in 2018 566,000 rental contracts were signed.

Alfaro perceives that this situation will put more stress on the rental market and will leave many tenants who until now negotiated rents with the owners out of it, considering that until 2019 the negotiated price was satisfactory for landlords and tenants.

Likewise, the "casting of tenants" will increase, about which the FAI has been warning since the approval of the Urban Leasing Law three years ago. In fact, he has stressed that in the main cities, for every apartment for rent that comes on the market, there are 10 applicants.

Alfaro has declared that this situation is due to the ignorance of politicians about the real functioning of the rental market and the lack of consultation of the sector.