Rent increase in a residential tenancy: what to check when you are notified of an update

When the rent can be updated and what to check first

When a landlord notifies you of a rent increase, the first thing is not to argue over the amount, but to check whether the contract allows it to be updated and on what terms. The Urban Tenancies Act provides that the rent may only be updated on the date each year of the contract’s term is completed and “on the terms agreed by the parties”; if there is no express agreement, no automatic update applies. The current law also provides that, if the contract agrees an update mechanism without specifying an index or methodology, the reference will be IRAV, pursuant to Article 18 of Law 29/1994, of the Urban Tenancies Act.

Before assuming the increase, check:

1. The exact date the contract was signed and the day each yearly period is completed.

2. Whether there is an express update clause.

3. Whether the contract mentions a specific index or a clear formula.

4. Whether the notification states from which monthly payment the new amount applies.

Do not confuse a rent update with a renegotiation. The former depends on the contractual agreement and the law; the latter requires agreement between the parties.

How to review the notification without losing sight of the key details

The communication of the increase must contain sufficient information for you to understand the new amount. The LAU itself states that the updated rent will be due from the month following the one in which the interested party notifies it in writing, stating the percentage change applied and, if the tenant requests it, enclosing the INE certificate where applicable. This allows you to check whether the increase has been properly notified and whether the landlord is applying the index provided for in the contract or the relevant legal reference.

Carry out this practical check:

1. Check whether the communication arrives by a method that leaves evidence.

2. Verify the date of receipt, because that is from when due payment is calculated.

3. Check the percentage applied and whether it matches the agreed formula.

4. Request a breakdown in writing if it is not clear.

5. Keep the letter, email or message and the next receipt.

Useful tip: if the receipt for the following month already includes the increase, note the amount paid and the reference month to avoid confusing a valid adjustment with an incorrect early charge.

What cannot be included in a rent increase

A common mistake is to mix the rent update with other charges. Article 17 of the LAU distinguishes rent from other items and, in addition, Article 20 regulates in detail which expenses may be agreed. In particular, estate agency fees and contract formalisation costs may not be passed on to the tenant, either directly or indirectly, and any agreement on expenses must be in writing and include an annual reference amount. It is also stated that, in buildings subject to horizontal ownership, chargeable expenses must correspond to the rented property according to its share of ownership.

Be especially careful in these situations:

- Your rent is increased and, at the same time, new items are charged without contractual basis.

- The update is presented as if it were a “review” of unitemised expenses.

- You are asked to accept an increase without being told which clause in the contract allows it.

- Amounts are included that were not previously in the contract and have not been agreed.

Here it is worth distinguishing between general guidance and individual advice. If the wording of the contract is ambiguous, if there are several addenda or if the property is in an area with specific rent limits, the specific review requires analysing the full document and the property’s situation.

Practical steps if you do not agree with the increase

If you find that the increase does not fit the contract or the law, act methodically and do not rush.

1. Reply in writing, making it clear that you are reviewing the notification.

2. Ask for the original contract and the specific update clause.

3. Request a detailed calculation of the new amount.

4. Compare the effective date with the actual date of notification.

5. Continue paying the amount you consider correct while you clarify the discrepancy, to avoid mixing the dispute over the increase with a possible default.

If the landlord insists on an amount you do not recognise as due, it is advisable to keep all supporting documents. In tenancies, documentary evidence is usually decisive: contract, notification, receipts and subsequent communications.

Common mistakes to avoid

- Thinking that every annual increase is automatic.

- Failing to check whether there is an express agreement in the contract.

- Paying without checking from which month the update takes effect.

- Accepting new amounts by WhatsApp or verbally without anything in writing.

- Mixing the rent update with repairs, utilities or community fees.

It is also a mistake not to distinguish between a main home and other uses. The LAU itself separates main-home tenancies from temporary tenancies and those for a different use, and that distinction changes the applicable framework. Therefore, if your contract is not for a main home, do not assume the same rules apply in the same way.

If you need an indicative valuation of your home to decide whether it is worth keeping the tenancy, you can use UBICASA’s online estimate at valoración de vivienda en Madrid, which provides a range, a PDF report and an optional visit. If you would like to discuss your case with a professional, you can write to us at contact or visit us at Calle Montesa 29, Monday to Friday from 10:00 to 15:00 and from 16:00 to 19:00.

If you would like to go further, read our related guide: How to update rent on a tenancy in Madrid as a landlord.