The other side of the Housing Law: more bureaucracy and possible disappearance of real estate

The Housing Law has started its processing in the Senate this week with a view to its approval before the regional and municipal elections on May 28.

Among other points included in the project, rent increases are limited, specific measures are established for stressed areas, the CPI is eliminated as a reference index for the annual rent update or mechanisms are established to expand the housing supply social. However, there are also other lesser-known developments that raise many questions in the real estate market.

Some of them concern article 31 of the regulation, which deals with the “minimum information in housing purchase and lease operations”. According to Idealista, who cites property agents, law firms and opposition parties, section 1.a of the aforementioned article will increase the bureaucratic work of real estate agents, make their work more difficult and could even cause the disappearance of small real estate agencies.

Specifically, the controversial point is the one that allows the person interested in buying or renting a home to request the “identification of the seller or landlord and, where appropriate, of the natural or legal person involved, within the framework of a professional activity or business, for intermediation in the operation”.

For his part, José Ramón Zurdo, general director of the Rental Negotiating Agency (ANA), has indicated that this law contains “two important elements” that, in his opinion, “go against the professionalization of the sector, even its viability, especially for some real estate agents, which are dedicated only to rent brokerage, which can directly disappear from the market”.

Article 31 is one of them, since the tenant, by being able to request a whole series of data and documentation, such as the identification of the landlord, would thus avoid the intermediation of the real estate agency. In his opinion, “it threatens the work and function of companies and professionals in the sector, where the spirit of the law has a direct impact on hindering professional work, to give more weight to the relationship between individuals, hindering the professionalization of the sector.

Another aspect that Zurdo has criticized refers to the modification of article 20 of the Law of Urban Leasing (LAU), “where the expenses of real estate management and those of formalization of the contract will be borne by the landlord, suppressing it when it is a legal person, and in this way all private landlords will have to take charge of this expense and the professionals who are dedicated only to real estate brokerage, will not be able to charge this professional service to the tenant or charge their fees to the landlords”.