Extension of aids to lessees

> Royal Decree-law 11/2022, adopting and extending certain measures to respond to the economic and social impact of the war in Ukraine (“RDL 11/2022”) came into force on June 25. It adopts and extends until December 31, 2022, certain measures, namely (i) the limit on the annual increase in housing lease agreements, due to expire on June 30; and (ii) the suspension of eviction and foreclosure processes affecting vulnerable households with no alternative housing options, due to expire on September 30.

Limit on the rent increase in housing lease agreements

> This measure affects housing lease agreements to which the corresponding annual adjustment must be made between June 27 and December 31, 2022. Instead of the increase being subject to the consumer price index (“CPI”), it will be adjusted according to the Competitiveness Guarantee Index (“CGI”).

> The regulation distinguishes between large property holders (individuals or legal entities owning over 10 urban housing properties or a built surface area of over 1,500 m² of residential property, excluding parking lots and storage spaces) and those owning fewer properties.

> In the case of large property holders, the lessor and lessee will agree on the increase, the amount of which cannot exceed the CGI.

> In the case of lessors holding fewer properties, RDL 11/2022 allows the parties to negotiate the increase. If they are unable to reach an agreement, they must apply to the rent the most recent IGC published on the date the agreement is updated.

Suspension of eviction and foreclosure processes affecting vulnerable households with no alternative housing options

> RDL 11/2022 extends until December 31, 2022, the suspension of eviction and foreclosure processes against (i) vulnerable households with no alternative housing options in rental arrears and subject to the 1994 Spanish Urban Leases Act; and (ii) people inhabiting a dwelling without any legal right to do so provided that (a) they are victims of gender violence, dependents or they care for dependents or minors; (b) they are in a situation of vulnerability; and (c) the property belongs to a legal entity or individual that owns more than ten properties.

> Lessors and homeowners affected by the suspension of eviction and foreclosure procedures have until January 31, 2023, to request compensation in certain circumstances.