Wednesday, 23 October 2024, 10:46
Spain’s consumer affairs ministry is investigating various real estate agencies for allegedly charging tenants illegal fees and forcing them to sign temporary contracts without valid reason.
Following a stream of complaints filed by consumer associations, the directorate general for consumer affairs found the alleged dodgy practices were being carried out by some real estate agencies throughout Spain.
The ministry said passing the costs of property management onto tenants, contract formalisation, as well as encouraging the signing of temporary contracts without valid justification, is prohibited. The ministry, headed by Pablo Bustinduy, pointed out that housing is a right and a basic necessity protected by Spain’s urban leasing law, which prevents real estate agencies from including clauses or practices that violate the rights of tenants.
These clauses or practices could be considered serious infringements, with fines of up to 100,000 euros, or very serious with penalties of up to one million euros. These amounts could even exceed those set at four to eight times the illegal benefit obtained, according to the consumer affairs department.
Property management and contract formalisation fees
In May of this year, leading consumers association in Spain Facua already warned that real estate agencies were charging tenants a fee that landlords have to pay themselves. These are real estate management fees and the costs of formalising the contract in the case of long-term contracts.
Until the entry into force at the end of last May, of the new law on the right to housing, which introduced a modification of the urban leases law, the payment of this fee was up to the landlord when it was a legal person (companies), but when it was a natural person, the law proposed that the landlord and tenant agreed on how they would share this expense. According to the new regulation, this payment now always falls on the landlord, regardless of his status (legal or natural person).
One of the agencies that Facua denounced for this reason was Alquiler Seguro, which is now among those investigated by the ministry of consumer affairs. According to the consumer organisation, Alquiler Seguro is allegedly charging an amount equivalent to one month’s rent plus the IVA sales tax for offering a “tenant care service”, which includes, among other things, “advice on how to change the ownership of energy supplies”, “legal advice” on the rental contract and even “resolution of claims and incidents”. However, the organisation pointed out that this type of management has to be assumed by the lessor.