Iberian Rental Housing Systems – Legal changes in Portugal and Spain after the crisis Maria-Olinda Garcia Faculty of Law – Coimbra University, Portugal 1

TENLAW: Tenancy Law and Housing Policy in Multi-level Europe This project has received funding from the European Union's Seventh Framework Programme for research, technological development and demonstration under grant agreement no

Portuguese and Spanish private rental housing Laws Housing is not under the EU Treaty Importance of national laws: – For foreign investors – For foreign workers 3

Portugal and Spain housing characteristics in common: ( Censos 2011) 4 PortugalSpain Owner-occupied dwellings 78%80% Rented17%15% Vacant 12%13%

Brief Historical Background 5 PortugalSpain Tenants very protected: - Rents frozen - Landlords did not have the right to terminate the contracts Until 1990Until 1985 Short-term rental agreements allowed After 1990, minimal duration 5 years - Between 1985 and 1994, minimal duration: 3 years - After 1994, minimal duration: 5 years Old and new legal frameworks co-exist yes

Urban Lease Acts after the crisis Portugal Act n.31/2012 Spain Act n.4/2013 Duration of the contractThere is no minimal duration Minimal duration : 3 years Landlord’s rights to terminate the contract If the tenant does not pay the rent for 2 months; - No need to go to court to terminate the contract After 1 month delay: - Court order (but not a judicial decision) Eviction process fasterExtra judicial processFaster judicial decision Registration of the contract If the contract is not registered, when the dwelling is sold the rental agreement ends. Tenant pays a penalty to terminate the contract before the agreed time T. cannot terminate the contract before 1/3 of the agreed time has elapsed T. cannot terminate the contract before 6 months have elapsed 6

Consequences of the new legislation - Rising supply of dwellings for rent - Uncertainty about current and future effects of the new rules : - lack of official data - inconsistent information: - increasing number of people interested in buying a dwelling - value of rents not going down 7

(Eurostat 2013) 8

Will the new legislations be decisive in increasing the percentage of rented dwellings? - From a tenant’s perspective: - both systems do not combine correctly stability and flexibility 9