Rentals in Spain: the regulations

Spain is a country that attracts many investors who want to find good deals in the real estate sector. Recently, the country has put in place new regulations for rentals which require good knowledge before getting started. In this article, discover the new regulations for making rental property purchases in Spain .

The new law on rentals in Spain

Coming into force on March 6, 2019, the new regulatory law introduced by the Spanish government aims to provide better protection to tenants in rental housing . Various points were worked on, including: the duration of the leases , the price of the rent and their evolution, the rules of the contract, etc.

1- The duration of the rental leases

The new rules have established an extension of the duration of the new rental leases . Thus, if the tenant is a "legal person", the duration of the accommodation is increased to seven years renewable for a maximum of three years instead of the three years plus one which was in force previously.

In the individual case, the lease term is now five years maximum renewable three years if neither party withdraws at the end of the lease. Thus, any long-term rental contract whose duration is limited to ten or eleven months is in no way valid.

In addition, if at the end of the five years, the owner does not wish to renew the lease, he must expressly let the lessee know within a period of four months before the end of the lease; this period is two months if it is the tenant who does not wish to continue his lease. Note that the notification not to continue the lease must be in writing.

On the other hand, in the event that the decision to vacate the accommodation occurs during the renewal period of three years, the tenant can do so at the annual deadline while notifying the owner one month before this, always in writing.

Let us mention that in the new rental contracts in Spain , the owner has the possibility of recovering his accommodation if he wishes to make it a main residence for himself or his family. However, he must notify the tenant two months in advance and this must be stipulated in advance in the rental contract. In which case, he will not be able to avail himself of it.

2- Security deposit, rent and payment deadline

Under the new laws, the owner can ask for a two-month deposit which can be increased to three months divided between the deposit and the guarantee. However, the deposit must be paid to a specialized organization depending on the area, which is responsible for keeping the said sum.

Regarding the rent, the owner cannot, however, demand more than one month's rent in advance from the tenant. Also, let us add that the price of the rent can be increased each year by the owner, but this one cannot exceed the index in force which generally varies between 1 and 2% .

The monthly rent payment deadline for rentals in Spain is set at the 5th of each month. It must not exceed the date of the 7th; otherwise from the 8th, the owner is able to authorize an eviction request to the Spanish social service.

Some clauses now considered null and void

The new rental regulations in Spain therefore invalidate certain clauses previously used by owners. Here are a few :

● Rent revision: previously semi-annually, the new law requires that in future it be done annually and be based on the IPC index ;       

● Owner's access to the property: the owner can no longer invite himself unexpectedly to the tenant's who, today, is the only one authorized to let him enter the accommodation;       

● The payment of various charges such as IBI , home insurance , tax on household waste or condominium charges must be paid by the owner and no longer by the tenant;       

● The landlord can no longer abuse his authority to dismiss the tenant if the latter does not refuse to pay more than a month's rent in advance;       

● One-year renewable contracts are no longer valid;       

● The abolition of the tax on property transfers, also known as " Impuesto sobre Transmisiones Patrimoniales " ( ITP ).       

These few clauses listed are part of a set which no longer has the right to be and which tenants can oppose. With the assistance of a real estate agency , you can avoid all these pitfalls that can cost you dearly.

What consequences for the owner with the new regulations?

The new rental regulation law in Spain has consequences for the landlord.

● In the event of major works, the latter has the possibility of increasing the rent up to a limit of 20% unless otherwise specified in the contract;       

● Landlords are now required to pay the commission to estate agents under the rental agreement. However, previously, tenants had to pay either half or all;       

● The necessity clause which allows an owner to recover long-term leased property for personal use;       

● The owner can carry out an inventory at the entry and exit of a tenant;       

● All work necessary for the proper maintenance of real estate must be carried out by the owner;       

● The owner has the right to financial compensation in the event of the tenant leaving prematurely for causes unrelated to the nature of the accommodation itself;       

● The deposit must be paid to an institution which keeps it;       

● The property must be repaired by the owner when the tenant leaves