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10 May, 2021

What You Need to Know To Update Rent In New Or Old Contracts

The issue of rental contracts has been a controversial topic in recent years; Especially after the Urban Leasing Law came into force in 2013. Many questions have been generated, all pursue the same purpose, to know what to do to update rent in the sale of both old contracts or those made in 2021?

We want to answer all those questions that have arisen with the Urban Leasing Law with this post. Join us in reading and know how to update rent in old contracts, as well as in this 2021 ; in addition to knowing the review process.

update rent

How to Update Rent In Old Contracts?

It must be taken into account that contracts referring to rentals made between 1995 and 2013 are governed by the LAU. In this case, the income and its revision are based on the consumer price index; with the exception that the contract had been established under another updating system.

The increase used to update income must be based on the variation index registered in the last 12 months. If not, it is clearly established that since the first year of the contract has been completed; the one that acts as lessor must be based on the latest data from the IPC. The increase used to update income must be based on the variation index registered in the last 12 months, exactly with this formula.

What is the review process?

What is known as the review process is the consultation of the Law indicators; that the landlord must do in order to update the rent in 2021. This prevents the use of an incorrect formula for the calculation.

Similarly, the landlord must notify the tenant through a written document that the rent review is in process. If it is the case, in which the tenant will ask the owner to justify the percentage of the increase, the landlord must justify the increase based on the CPI and the INE .

Update Income In This 2021 How To Do It?

The easiest way for a landlord to update rent in 2021 is by using the following formula. The lessor must rely on the year-on-year CPI to apply the monthly calculation. When the CPI is positive, the injured party is the tenant since the rent will rise.

Otherwise, when the CPI is negative, the beneficiary is the tenant, since the rent must go down.

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