Lisbon renters want government to fix rent support mistakes

The Lisbon Tenants Association wants the government to correct shortcomings in rent support measures for families who have lost subsidies because they had to sign new contracts, and is calling for oversight of the rental market.

Público reports this Monday that families are losing extraordinary rent support because they were forced to enter into new leases at the will of the landlord, since the law establishes that rent support is provided for contracts concluded before March 15, 2023. The newspaper also reports a case where a landlord reported an addendum to a lease agreement to the Tax Authority (AT) in December 2023, which led the Institute of Housing and Urban Rehabilitation (IHRU) to assume the agreement had been terminated and withdraw support.

“There are some omissions in the legislation that were not foreseen and must be corrected,” António Machado, secretary general of the Lisbon Tenants Association (AIL), told Lusa, adding that they would contact the government to request that the amendments to the legislation be put into effect. .

However, the head of AIL said that there are also “many lessors who use a number of tricks to change contracts” that relate to the same thing and with the same person, and make “additions to the contract that are not reflected in the Tax Code.” Authority”, which led to the cessation of support.

Therefore, for the head of the association representing the interests of tenants, these problems arise either due to imperfect legislation or due to a lack of control.

“We have been complaining for a long time that oversight is needed, we need an administrative body to which we can complain and act. In any economic activity there is someone to complain to, but in renting there is no one. The party that has power – who has property – makes changes, manipulations, contracts that are not registered and do not interfere,” said António Machado.

Consumer protection association Deco told Lusa there had been complaints about a loss of rental support and a lack of response from the IHRU and AT to requests for clarification.

Cases include families who move and lose government support, as well as cases where contracts may be renewed and the landlord submits a counteroffer for a new contract with a higher rent, resulting in families paying more rent and losing support. Support is only valid for contracts until March 15, 2023.

Natalia Nunez, Deco’s financial protection coordinator, said that for families whose income makes up a significant portion of their monthly income, this support is very important and that if the state wants to continue supporting these families, “it should consider changing the law.” or support families in other ways.”

Faced with such expensive homes, the Deco chief said, “many families pay rent on credit, are forced to share a home with other families, or move back into their parents’ home.”

For the Lisbon Property Owners Association (ALP), the problems with rent support are not surprising, and they blame it on the lack of a structured approach to housing in recent socialist governments and laws passed in haste.

“We are not surprised because the legislative activity was terrible, laws were adopted in a hurry, were not discussed with partners and populists,” said ALP spokeswoman and director Diana Ralha, believing that this support was not properly thought out in a market that is in high volatility and has many short-term contracts.

Diana Ralha also said that poorly designed legislation and support pits “citizens against citizens” and results in landlords being perceived as the enemy when they do not address these issues. He expressed hope that “the central bloc will quickly reach consensus” on these topics.

For the ALP director, there is also the issue of the IHRU’s inability to cope with the large volume of work placed on it, starting with the More Housing package, and she cited the example of the rent-to-sublet program (Government rents out properties and then sublets them to families at more affordable prices), stating that there are cases where the government has already rented houses for a year, but families have been waiting for subletting of the same houses for five months.

Lusa, like Público, asked the IHRU about the households that receive this support and how many of them stopped receiving assistance because they had a rental agreement after March 15, 2023, but received no response.

According to the IHRU, at the end of 2023 almost 237 thousand families were receiving emergency income support, and the average amount was around €113.

This support is provided automatically and covers families with income up to IRS level 6 (about 38,600 euros per year) and with an income level above 35%. The maximum monthly amount is 200 euros.

This support is available until December 31, 2028, but is subject to annual review so that the level of effort can be assessed and whether the tenant continues to qualify, for example in terms of income.

For 2024, as a way to mitigate the impact of the 6.94% rent renewal, the previous government approved a measure that automatically updates extraordinary support by adding 4.94% to the cost of monthly rent, with this increase being granted even if it implies exceeding the current maximum support amount (which is 200 euros).