Thursday, January 29, 2009

Focus on: Recent Amendment to the Tenancy Law

In response to rapidly rising rents, the Law Regulating the Tenancy of Residential, Commercial & Industrial Premises issued by Royal Decree 6/89 was recently amended by Royal Decree 72/08. Some of the significant features of the amended law are as follows:

  • Landlords may not increase rents for three years from the date of commencement of the lease or from the date of the last rental increase;
  • Thereafter, rent increases are capped at 7% per year;
  • If the landlord performs any improvements of the leased premises at the tenant’s request, then a commensurate increase in rent is permitted;
  • The landlord may not evict the tenant without a valid legal ground for four years for residential premises and for seven years for commercial/industrial premises from the date of the tenancy agreement; and
  • The lease will be deemed renewed during the period when a tenant cannot be evicted even if the landlord does not renew the registration;