Apartment Rental Charge

[Daveyboy]

I have seen something of what I wish to know in an earlier thread but apologise for beginning a new one, as I can't locate it now.
My problem: I am renting a new apartment. When the contract comes up for renewal, it states that the monthly rental charge will be increased by 5%.

What I have read, is that a new place can only be increased by the rate of inflation for the first 5 years. I am renting through a properties agency, not the owner.

My question is, am I obliged to pay the 5% or could I reasonably suggest that the agency is only allowed by law to raise it by the rate of inflation?
Or, if the 5% agreement has been reached between agency and owner, does the A.R.I. rule no longer apply?

Thanks in advance for any assistance.

Daveyboy

[silver]

could depend on the small print in contract..but the norm is by the rate of inflation

[Guest]

I have seen something of what I wish to know in an earlier thread but apologise for beginning a new one, as I can't locate it now.
My problem: I am renting a new apartment. When the contract comes up for renewal, it states that the monthly rental charge will be increased by 5%.

What I have read, is that a new place can only be increased by the rate of inflation for the first 5 years. I am renting through a properties agency, not the owner.

My question is, am I obliged to pay the 5% or could I reasonably suggest that the agency is only allowed by law to raise it by the rate of inflation?
Or, if the 5% agreement has been reached between agency and owner, does the A.R.I. rule no longer apply?

If that's what it says in the contract and you've signed it then you have no choice, but actually you do, the rental market is flat as a f%rt right now and people who insist on this increase are just being greedy, a lot of landlords Don't put up the rent every year, particularly for a good lessee, my advice is to shop around, try the smaller agents they are usually hungry for a deal!!

Thanks in advance for any assistance.

Daveyboy

[Beachcomber]

I intend no disrespect to Daveyboy who is probably quite right in what he says but, rightly or wrongly, it is situations like this that make people think twice about renting out their property on a long-term basis.

[Guest]

I intend no disrespect to Daveyboy who is probably quite right in what he says but, rightly or wrongly, it is situations like this that make people think twice about renting out their property on a long-term basis.

I'm sorry Beachcomber, I mean no disrespect but what "situations" are you referring to? can you clarify please?

[Beachcomber]

I'm not going to get into the old landlord/tenant argument because one's point of view depends entirely upon which side of the fence one sits.

I think it's quite clear what I mean and I don't intend to spell it out in words of one syllable but suffice it to say that I would never, ever, even consider the remote possibility of renting out my property on a long term basis.

By the way, you seem to have messed up the quote in your previous post which also appears to contain your reply. Perhaps you could clarify!!

[Daveyboy]

Thanks for the replies so far guys.

Let me say that I am not trying to upset my landlord. I am concerned that the agency is trying to rip me off.

I guess I asked two questions really. One, does the rule of 'Rate of inflation price rises only' actually exist?

Two. If so, is the agency entitled to ignore that if agreement is reached between them and the landlord, to raise the rent x% as they see fit ?

Thanks.

[Beachcomber]

You are obviously a good tenant and the landlord will not want to lose you. Do you know who he is? Can you contact him direct?

I think this is the law you are looking for. Specifically Article 18 and also 19 if any improvements have been carried out to the property since you started renting.

Durante los cinco primeros años de duración del contrato la renta sólo podrá ser actualizada por el arrendador o el arrendatario en la fecha en que se cumpla cada año de vigencia del contrato, aplicando a la renta correspondiente a la anualidad anterior la variación porcentual experimentada por el Índice General Nacional del Sistema de Índices de Precios de Consumo en un período de doce meses inmediatamente anteriores a la fecha de cada actualización, tomando como mes de referencia para la primera actualización el que corresponda al último índice que estuviera publicado en la fecha de celebración del contrato, y en las sucesivas el que corresponda al último aplicado.

This basically says that during the first five years of the duration of the contract the rent can only be changed on the anniversary of the date of signing each year in line with the change in the Retail Prices Index for the previous twelve months. It then goes on to tell you how to calculate which dates and periods to use to calculate the increase in the RPI.

You may wish to print out this law and show it to your agents although it does run to 25 pages.

[silver]

Beachcomber very good post... but this fella could have one of the new 11 month contract... if he does your great info might not apply. or do they

[Beachcomber]

He says his contract comes up for renewal so I assume it is not an eleven month contract because to renew such a contract would defeat the object of imposing it in the first place.

An eleven month contract is just that. A contract for eleven months which specifically states that it is not renewable. The idea is that the tenant moves out at the end of eleven months then moves back in on signing a new contract which will last for another eleven months.

[silver]

I re read

I am renting a new apartment. When the contract comes up for renewal, it states that the monthly rental charge will be increased by 5%.

It seems that he is about/or just has rented and on the contract they he has signed/or might sign..it states.....
Dont know if thats legal or not..do you?

[Beachcomber]

I honestly don't know but, if it is not, what is he going to do? Take his landlord to court and get involved in a lot of litigation and bad feeling?

I've no idea what the RPI increase will be for the twelve months prior to the renewal of his contract but let's say that it is 3%. He is going to be asked for a 5% increase so on a monthly rental of, say €1.000 he will be paying €240 per year on top of what the increase should actually be. Unless he wants to make a point is it really worth all the hassle.

From the owner's point of view he could just as easily obtain an inflated bill for making a few basic improvements then (according to that law) legally charge the tenant a proportion of the cost in increased rental.

[silver]

I wonder if the agent get the difference? Could be that he has a contract with agent and the agent has a contract with the owner..dont know if thats above the law...could be a way to get around the law. but woth finding out for 240€

[Daveyboy]

Great responses. thanks.

The contract is one of the 11 month variety. It states on it that it is renewable, if mutually agreeable between the landlord and the tenant, presumably for a further 11 months (legally, as i understand) although it does say, 'For a period of mutual agreement by both parties.'

Does this alter the RPI aspect?

Beachcomber, as ever, thanks for your valuable input along with Silver's logically prompting questions.

I know who the owner is but I have no direct contact to him. I cannot see the agency providing the detail which will allow me to do so, either!
As Silver says, are they creaming off a %age on this and this is my fear, hence my question as to the legality of their statement in the contract, as to the intended increase.
Thanks again

[samizdat]

As Silver says, are they creaming off a %age on this and this is my fear, hence my question as to the legality of their statement in the contract, as to the intended increase.
Thanks again

well if they can legally increase by inflation which we assume to be about 3% and the agency want to charge you 5% - its a two percent difference, hardly worth arguing over, certainly not worth getting the agency's back up over. I would imagine they are taking either one month rental for introduction from the owner or 25% ish of monthly rent to manage the property. So either way 2% is peanuts to them.


Speaking as a someone who rents out, I would insist on 5% as that covers the re-painting of the entire house after the tenant moves out and all the numerous breakages. Plus I have to do constant maintenance, often caused by careless tenants i.e. leaving iron on table so it burns through or leaving cooker on and burning it out so it has to be replaced. I wouldn't want to be in a position in a couple of years where I have not had a percentage increase for inflation. Like the other posters, theres no way I want a long-term tenant "stating" his rights.

I think 5% is very reasonable amount.

[Beachcomber]

The contract is one of the 11 month variety. It states on it that it is renewable, if mutually agreeable between the landlord and the tenant, presumably for a further 11 months (legally, as i understand) although it does say, 'For a period of mutual agreement by both parties.'

Does this alter the RPI aspect?

It could well do and even if it doesn't presumably the owner could say he isn't agreeable to the renewal if you don't agree to the 5% increase.

If you are otherwise happy with the apartment it may be best to bite the bullet and agree to the increase. As samizdat says, he considers it a reasonable increase and so do I but, then, we are both owners rather than tenants!

[Guest]

I'm not going to get into the old landlord/tenant argument because one's point of view depends entirely upon which side of the fence one sits.

I think it's quite clear what I mean and I don't intend to spell it out in words of one syllable but suffice it to say that I would never, ever, even consider the remote possibility of renting out my property on a long term basis.

By the way, you seem to have messed up the quote in your previous post which also appears to contain your reply. Perhaps you could clarify!!

Coming from someone who purports to be useful and informative that's a pretty, nay, very stupid answer, what situation are you referring to? the fact that the guy doesn't like neing ripped off, why can't you answer the simple question?

[Beachcomber]

I don't purport to be anything of a sort. If you don't like my answer, tough. I don't see Daveyboy complaining!

[MaggieMay]

Coming from someone who purports to be useful and informative that's a pretty, nay, very stupid answer, what situation are you referring to? the fact that the guy doesn't like neing ripped off, why can't you answer the simple question?

Classic.
Read all through the thread again Stan and then decide whether you ought to be embarassed by that outburst.

[Lorraine - Mijas]

I think Beachcombers advice is pretty honest , unless your going to really struggle to pay the extra is it really worth upsetting both the agent and landlord, especially if your happy there!! no one likes to be ripped off but unfortunately it's how the world works. Could be worse you could buy a trespasa here, rent increases at cost of inflation every year but also can and often does increase and extra 15% on top every time the business changes hands!!! fair? certainly not but that's life!!
Lorraine