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Majority of New Rental Contracts Are for Just One Year
23 April 2018
Short-term contracts make rental agreements “unstable” for tenants as they allow landlords to evict tenants or dramatically raise rents.
The number of rental contracts with durations of more than 12 months is decreasing. This is due to the increase in market prices, which have risen by more than 36% in Lisbon compared to 2011. With short-term contracts, landlords can increase their rents more frequently or find tenants willing to pay more. Likewise, the contract renewal clause is decreasingly used, the Diário de Notícias reported on Monday.
According to the Confidencial Imobiliário index, rents in Lisbon have been showing double-digit quarterly increases since 2016. In Porto, although the numbers are lower, the trend has been the same. The president of the Lisbon Tenants’ Association (AIL), Romão Lavadinho, stated that there are currently “more than 500,000 tenants that lack stability” – that is, they have short-term contracts.
Faced families’ difficulty in finding property at reasonable prices, some political parties have already presented some policy proposals aimed at solving the housing problem.
Last week, the PS (Socialist Party) delivered a bill to the Basic Housing Law. The proposal would give municipalities the right to allocate unjustifiably vacant homes to the rental market. The proposal was praised by the Lisbon Tenants’ Association, while property owners, who consider the proposal unconstitutional, criticised it for its “violence and cruelty.”
This Monday, the Minister of the Environment will present the New Generation of Housing Policies legislative package, in which there is support for increased access to housing. The policy intends to boost the offer in the rental market by private owners, at affordable prices, in exchange for tax benefits and other support.
This week, the Left Bloc will also present a project that targets short-term rental contracts by setting a minimum duration and granting tax incentives for longer-dated contracts.
The president of the National Property Owners’ Association (ANP), António Frias Marques, said in a statement to DN that not all landlords are equal and stressed that the association’s board recommends five-year contracts that guarantee stability for the landlord and the tenant. However, their recommendations often go unheard.
Romão Lavadinho, president of the Lisbon Tenants’ Association, says that more and more people are faced with eviction orders or changes in the value of their rents.
There are reports of one-bedroom flats whose rents are increasing from 350 euros to 900 euros. “I don’t it’s fair that you can stay indefinitely in a small house, but this absurd,” said Maria de Lurdes Melo, 65, one of the tenants the DN interviewed and who received “a brutal and dry letter” from her landlord opposing the renewal of her rental contract.
Original Story: Público
Translation: Richard Turner