Rent increase for long term tenants

Rent increase for long term tenants

Landlords, who want to raise their tenants rent on the grounds of the increase in the value of the house, do not have the right to increase the CPI without a court decision before 5 years have passed after the lease.  While the relations between the lessor and the tenant are regulated by the Code of Obligations, the provisions generally protect the tenant.

 Is it possible to increase the rent above the CPI?

It has been reported that the landlord must pass 5 years after the lease and a court decision to increase the rent compared to the CPI.

How has the pandemic affected prices?

During the worldwide COVID-19 epidemic, there were huge price increases in the real estate market due to the construction sector slowing down. Many months were spent in quarantine therefore these companies were forbidden from working. The high demand fees were also reflected in the rental prices. Rental prices have gone through the roof since the pandemic and landlords who rented out their houses before also started to ask for an increase in their rents.

Rules and Regulations

While the relations between the lessor and the tenant are regulated by the Code of Obligations, the outcomes generally protect the tenant. Therefore, the rent cannot be increased more than the 12-month average of the CPI. While this rate was 15.15 percent as of August, the landlords who want to determine the rental price this month should not exceed 15.15 percent, which is the 12-month increase rate in CPI. However, there is an exception to this situation. Landlords have the right to demand that the rental price be determined by the judge at the rate of the current value every 5 years. Research suggests that if landlords file a lawsuit about rental fees, then the CPI increase rate can be determined fairly according to the condition of the leased property and the precedent rental prices. If that region is very developed, the judge can increase the CPI in accordance with the equity, but this can only be requested every 5 years