Renting & Housing Law in Spain

If you are relocating or just want to spend your holidays in Spain, here you have useful tips about your rights and obligations when renting or letting a property in Spain.

Most legal provisions on renting and letting in Spain are laid down in the Law of Urban Lettings (Ley de Arrendamientos Urbanos) of 1994, which applies to rental contracts dated from January 1, 1995 and onwards. Contracts signed before such date are governed by several rules, which have been modified by the current law of urban lettings.

According to the aforementioned Spanish Law, rental contracts are firstly governed by the agreement between the parties, as far as they comply with the provisions of  the Law on Urban Lettings.

1. Rental Contract

1.1 Legal Provisions

The rental contract must contain the following items:

• • Details of landlord and tenant
  • Description of the property
  • The contract term
  • Amount of rent and payment terms
  • Any other legal provisions that the parties agree

Rental contracts may be made before a notary and recorded at the Spanish Land Registry (Registro de la Propiedad).

These are only general guidelines and not definitive statements of the law, all questions about the law’s applications to individual cases shall be directed to a Spanish Lawyer.

1.2 The Contract Time Period

Both parties agree the term for which the property will be rented. You may rent the property for a long or a short term. The distinction is very important as Spanish law provides with less rights to short-term tenants.

1.2.1. Short term rental contracts

Short-term rental contracts (contrato de arrendamiento de temporada) require that the tenant vacate the property when the contract ends, there is no chance to renew it but a new contract can be agreed. This type of contract is normally used for holiday letting.

The short-term condition must be specified in the contract, which duration must be agreed in accordance with the term needed to be spent in the property rented. The Spanish law does not provide a minimum or maximum term for short term rental contracts, however, if the contract duration is longer than 11 months it may be considered a long-term rental contract and the Spanish law on rental agreements would be applicable, where the right to renew the term is for up to 5 years for individuals.

1.2.2. Long-term rental contracts

You can settle a long-term rental contract, which duration exceeds 1 year.

If the contract does not exceed 5 years duration or 7 years duration in case landlord is a company, it will be renewed up automatically upon its expiration for periods of 1 up to a 5 years term (7 years if landlord is a company), unless the tenant is not willing to renew it. The landlord is obliged to accept these renewals, except when he had previously stated in the contract that he needs to recover the property for his own use before running the 5-year period.

After the 5 years’ term (7 years if landlord is a company), the owner may terminate the contract, as long as he has given the tenant 4 months notice  the end of the contract, otherwise the contract will be automatically renewed for 1 year, unless the tenant refuses this renewal.

When the contract does not provide its duration, legal term is for 1 year.

These are only general guidelines and not definitive statements of the law, all questions about the law’s applications to individual cases shall be directed to a Spanish Lawyer.

2. The Deposits

Upon signature of the rental contract, tenants are required to pay the landlord a deposit (fianza) normally equal to 1 month rent payment, in order to guarantee that the property will be returned to the owner in the same state as before the occupation.

This deposit cannot be used to pay the rent to the landlord.

This deposit should be returned as the tenant moves out, assuming that the property is in good condition.

3. The Rent

The amount of rent is agreed between both parties. Rent is normally paid within the first 7 days of every month.  Payments should be made as agreed in the contract.

Tenant shall receive a written receipt justifying that the rent has been paid, unless it is accredited by other means; e.g. proof of payment by wire transfer. Make sure you get these receipts or any proof of payment as they constitute an implicit contract.

During the first 5 years, rent will be increased or reduced according to the consumer price (inflation) index (índice de precios al Consumo – IPC). After that period, rent will increase according to what both parties agreed upon signing the new contract.

It is strongly advisable that a Spanish lawyer either reviews your existing lease agreement or draws it up.

In case your tenant stops paying you for the rent, you may immediately proceed through courts to evict him to recover your property.

4. About the Expenses

Although expenses produced for daily use of the property, such as community fees, or real estate tax (IBI), must be paid by the landlord, tenants may be required to pay them when it had been previously agreed by both parties in the rental contract.

5. Inventory

Tenants may be required to sign an inventory of the property contents (furnishing, fixtures and fittings; and the state of them.

It is important to check this carefully, as every item outlined on the list shall be returned when you move out in the same order as it was listed, otherwise you might lose your deposit.

6. Repairs in the House

The landlord must make all necessary repairs to keep the property in a fit and habitable condition, however landlord is not responsible for repairing any damage caused by the tenant.

Tenants must make those small repairs on account of the property daily use.

Urgent maintenance repairs may be undertaken by the tenant in order to avoid serious and immediate damages in the property, these must be made previous notice to the landlord, repair costs will be returned to tenant.

The landlord must give the tenant three-months notice in advance to undertake repairs affecting to health, hygiene and comfort in the property. In this case the tenant may surrender the tenancy within 1 month after receiving the notice. If the tenant decides to stay, he may get a reduced rental rate in relation to the rooms that cannot be used because of the repairs.

7. Sale of the House Rented. The tenant’s rights of Pre-Emption

If the landlord is willing to sell his property that is rented during the life of the rental contract, the tenant is entitled to a right of pre-emption (derecho de tanteo), which means that he could buy the property in priority to other purchaser.

Landlord must first offer the property’ sale to tenant , who will have 30 days to reply. If the landlord does not make this offer, or the property is sold at a lower price than the offered one, the tenant might, within one month after sale completion, have the sale annulled and purchase the property for the price declared in the sales’ document.

Surrendering pre-emption rights’ is legally allowed as far as both parties agree so.

No pre-emption right can be applied when the rented house is sold together along with the rest of properties that form part of the same building.

If you buy a rented property, and the rental agreement is duly registered with the Land Registry, you acquire the rights and obligations of the vendor, and therefore, not until the 5-year (7 years if landlord is a company) validity period of the rental contract has been completed, may the rental contract be terminated.

These are only general guidelines and not definitive statements of the law, all questions about the law’s applications to individual cases shall be directed to a Spanish Lawyer.

8. Landlords/tenant’s Subrogation in Favor of Third Parties

In certain cases, such as the following, parties of the rental contract may be substituted for another person, who will acquire all rights and obligations of the old tenant or landlord:

• The landlord may be substituted when he sells the rented property to a third party, as far as the rental agreement is duly registered with the Land Registry.
• The tenant may be substituted when he got divorced or died. In such a case his descendants or spouse could stay in the property up to the termination of the rental contract.

9. Can the tenant let the Property to a Third Party?

Previous consent provided by the landlord, the tenant may sublet a portion of the rented property to another person for the same period he had contracted.

The rent that the third person shall pay to the original tenant must be lower than that stated in the rental contract.

10. Taxes

Landlord is liable to pay income tax at a rate of 25%, assuming that he is a non-resident whose Spanish property is rented.

You can deduct maintenance expenses from your Spanish income tax.

11. Having the Rental Contract Terminated

a) The landlord may terminate the rental contract when the tenant:

• Does not pay the rent or deposit.
• Rent the property to a third party without the landlord’s consent.
• Deliberately causes damages to the property.
• Undertake repairs without landlords’ consent.
• Causes serious nuisance to the neighbours.

In any of these cases you probably need the services of a Spanish Lawyer in order to obtain a court order against the tenant.

b) The Tenant may terminate the rental contract when the landlord:

• Fails to make the necessary repairs to keep the property in a fit and habitable condition
• Disturb the tenant’s dwelling use

12. Starting Legal Action Before the Spanish Courts

Many problems may arise when renting/letting a property. You may disagree with your rental contract duration, the rent increase, tenant refusing to move out, tenant failing to pay the rent;

Normally, disputes regarding renting and letting are dealt with by civil courts (juzgados de primera instancia).

If you are a landlord and your tenant has failed to pay for the rent, you may be entitled to evict him/her from your property and claim any unpaid rents. Our lawyers provide a fixed-fee eviction service that you can purchase online right now.

13. Getting Legal Help