When the contract expires and the rent doubles: the hidden face of invisible evictions

PalmThe Urban Leases Law (LAU) decreed in March 2019 that rental contracts would be extended from three to five years. Now that thousands of contracts are expiring, the situation has worsened compared to five years ago: the price of housing as a speculative asset continues to rise, fueled by demand far exceeding supply. According to figures from the Ministry of Social Rights, Consumer Affairs and Agenda 2030, island tenants whose contracts end at that time will face a rent increase of €4,615 per year. This increase adds to an already unsustainable situation for many families: the average rent in the Balearic Islands exceeds €1,500, the second highest in Spain after Barcelona. Experts consulted by ARA Balears warn of an increase in legal proceedings stemming not from non-payment of rent, but from the termination of these agreements. "The cases are becoming more and more numerous. The landlord wants to rent at a higher price or sell, and the tenant won't leave because they have nowhere else to go. Evictions are being initiated for this reason," says Natalia Bueno, vice president of the Balearic Islands Association of Real Estate Agents (API). "Some landlords even offer a sum of money to get tenants to leave the apartment, but the response is always the same. They tell you that 2,000 or 3,000 euros, for example, isn't going to solve anything," Bueno explains regarding a deterrent practice previously limited to occupied properties.

183 evictions in three months

The Balearic Islands registered 183 evictions (executions of evictions) related to unpaid rent under the Urban Leases Act (LAU) during the third quarter of 2024, compared to 31 related to mortgage foreclosures, according to data from the judiciary. Laura Barrer is 44 years old, has a thirteen-year-old daughter, and lives in an apartment in a Palma neighborhood with a lease that expired this year. "I haven't received any official notice yet," she says, unsure if she'll be added to the eviction list. But she does fit the most common pattern: she's not leaving because she has nowhere else to go. The landlords want to increase her rent from 850 euros to 1,300 or 1,500. "They told me that, in any case, I can't afford it." They've already asked for the keys. "They want the apartment, and I want a house to live in. I'm desperately looking for something, but we can't normalize finding an apartment for 1,000 euros and calling it a bargain. I've always paid on time, but a 100% increase is outrageous. The worst part is that they know they can collect it, even if it means financial hardship." The woman, a self-employed worker, is psychologically overwhelmed by the situation. "I have nervous hives, but I know I have to find a way to make a living," she adds.

Cases like Laura's are increasing every day. She has sought advice and help from the Platform of People Affected by Mortgages (PAH), which has been focusing more on rental problems for some time now. Gloria Olmos, a lawyer at the organization, confirms the trend of contracts not being renewed due to the landlord's "unacceptable" conditions. "We can't normalize rents of 1,500 euros because people don't earn 3,000." Most families earn the minimum wage, which doesn't reach €1,500. We're talking about a problem that affects journalists, nurses, the self-employed, and hotel workers, among others." Cases of properties being sold while leases are still in place are also on the rise. "The new owners are demanding the termination of the contract, claiming they need the property for a child. This isn't always the case, and it's not always proven," warns Olmos.

What should the tenant do?

The lawyer reminds tenants that non-renewal of a lease must be formally notified four months in advance. Otherwise, landlords will lose the case. Regarding tenants, she recommends that they "under no circumstances" stop paying the agreed-upon rent. "If your bank account is closed, there's a specific procedure for depositing the rent with the courts. And if you don't have the money, report it officially, look for public assistance, but don't accumulate debt. To assert your rights, you must comply, and you'll have a strong case," she advises. "You should try to reach an agreement, whether it's a renegotiation or to request more time to find a new place to live," she adds. If the case ends up in court, there's no set timeframe for resolution: "It depends a lot on the court. Some take six months; others, a year. If it's an eviction for non-payment, they're processed more quickly."

Teresa Riera, head of the Housing and Homelessness program at Cáritas, is "hopeful" that tenants "will become aware" and renew their contracts by increasing the rent according to the Consumer Price Index (CPI). "But I know it's not going to happen and that it's more wishful thinking than reality," she acknowledges, while pointing out that the situation hits single-parent and vulnerable families the hardest. "If we all want to earn more, we'll leave families on the street," she says, while also calling for a maximum rent price. "The PP's argument that it hasn't worked where it's been implemented doesn't hold water. It's a lie," she asserts.

Geographer Sònia Vives also supports the rent cap measure to combat high rent prices in cases such as contract expirations. "It's a process that will only grow due to the gap between housing and wages. It's unsustainable. Of course, there are people looking for apartments because their rent has gone up. These are invisible evictions because, even if they don't go to court, you have to leave where you live," he explains. And he believes that "no negotiation is possible" because "very few people don't want to collect the maximum possible amount."