New Revised Law on Rentals
At the end of 2018, we wrote to advise that a new Spanish law was published Ley 21/2018, on urgent measures to do with rentals, which comes into force December 19 2018. Now Pedro Sánchez of PSOE has updated this with a new law Ley 7/2019, which came into force March 6th 2019.
This modifies the previous six laws. Once again, this law clearly favours the tenants, as these new regulations are intended to reinforce longer-term tenants’ rights.
What the government has aimed to do is balance the legal position of the owner and the tenant in their rental relationship. Some could say that the scales have tipped firmly in the tenants’ favour. It is important to understand the implications as this area of rental law is important to study carefully.
When there is a problem, it needs a lawyer who is aware that there are now many contractual periods in force with rules for housing leases, depending on the dates of the contracts. Otherwise when it comes to a Court case the client could find themselves with a problem. We are very experienced in this area. The new law only applies to contracts signed from March 6th 2019.
A letting agency could find themselves in the position of many of their landlords being in different situations depending on when the contracts were signed.
So what does this new Spanish Rental law actually say? Well, some important points.
1) The law does not cover holiday rentals.
2) In Spain there is an automatic renewal period. This is five years, unless the person renting says at least 30 days before the date of termination of the contract or any of the extensions, that he does not want to renew it, or both parties are in agreement. Otherwise, a rental autotmatically renews each year for up to five years (unless the tenant is a company and then it is 7 years).
3) After the five years are ended, if there is no communication from any of the parties to not renew it, the contract will be extended for three more years, which gives the tenant greater stability as they are no longer exposed to the one year extension previously established in 2013.
4) The mandatory extension of the contract will not proceed if the owner has included in the contract that they may need the rented house back as permanent housing for himself , but not for selling.
5) However this must be told to the lessee at least two months before the date on which the house will be needed and the tenant will be obliged to deliver the leased property within that period if the parties do not reach a different agreement.
6) Evictions for people with financial problems can only take place after a Court have arranged somewhere else for them to live.
7) It is now not permitted that the deposit is more than two month’s rent on top of the usual month’s deposit (so no more than three months in total).
The most important thing to remember is that long-term tenants have a lot of rights, and a proper contract is very important and a landlord/tenant relationship should not be entered into without taking into consideration Spanish law in this respect.
If you require any help with a tenant or landlord problem, please let us know.
Revised April 2019