Consumer is investigating real estate portals for rental listings in high-demand areas

MadridThe Ministry of Social Rights, Consumer Affairs, and Agenda 2030 has launched an investigation to remove rental listings in designated high-demand areas that violate current consumer protection regulations, the ministry announced in a statement on Friday. "If we can prove the existence of deceptive or unfair practices, the ministry will act decisively," warned Social Rights Minister Pablo Bustinduy (Sumar) at a press conference. Bustinduy declined to name the real estate portals under investigation but indicated they are "the largest." The targeted listings on major real estate portals will be those offering rental apartments at prices higher than those set by law for large landlords, or those that fail to include the price of the last lease agreement offered for the property, if the owners are private individuals, as required by law. In this regard, Bustinduy has once again demanded that the PP apply state regulations to the regions and cities it governs, which would entail the delimitation of high-demand areas. These advertisements, according to the ministry, could be considered violations of consumer regulations as "unfair and misleading practices" and, therefore, carry penalties. The Customer Service Law, which came into effect on December 27, requires real estate portals to publish information in online advertisements for properties located in high-demand areas that allows consumers to understand the parameters used to justify the asking price in accordance with these regulations. These parameters include the price of the last rental agreement under which the property was offered and the applicable rent index for large landlords. The Secretary General for Consumer Affairs and Gambling, Andrés Barragán, recently informed various real estate portals and associations by letter of the legislative changes approved in this law and their responsibilities as intermediaries between landlords and tenants.

Idealista, one of the largest real estate portals in Spain, stated in a press release that "the responsibility for the content of real estate listings lies with the advertiser." The portal says this is not altered by the customer service law. "Idealista maintains a fully cooperative stance with the authorities," it insists.

Clash between the PSOE and Sumar

The start of this investigation comes after the detection of practices that could violate the new rules. It also comes amid a clash between the two partners in the coalition government, the PSOE and Sumar, over housing policies. Specifically, the party led by Yolanda Díaz, and of which Bustinduy is a member, rejects the Socialist proposal to offer tax breaks to landlords who lower rents. "We do not agree [with the proposal]. It is unfair, and the only solution is the extension of the contracts [that must be renewed]," stated the Minister of Social Rights. In contrast, the Socialists insist that it is a "balanced" measure that provides "legal certainty," in the words of the Minister of Economy, Carlos Cuerpo, this Friday. In the PSOE's opinion, an "extraordinary extension" of contracts cannot be approved because it would be unconstitutional in a non-exceptional context such as the pandemic and the price crisis.