- Concept of rental property in Spain and its characteristics
- What is property rental?
- Can you apply the same legal concept of property rental to parts of it such as a garage or storeroom?
- Should the rental property have a First Occupation Licence to be considered inhabitable?
- Are caravans and tents regulated by the LAU?
- Should property rental contracts be for longer than 12 months?
- What happens if a rental is treated as short term when it’s really a permanent dwelling?
- Should a property rental contract be in writing?
- Who should provide the energy-efficiency certificate for a rental property?
- Are any types of property exempt from energy-efficiency certificates?
- Who can issue an energy-efficiency certificate and what must it contain?
- If both parties agree pacts to improve the tenant’s rights, are they valid?
- What are examples of possible clauses that are null and void in a property rental contract?
- Can you register a property rental contract at a Property Registry?
- Is it necessary to sign deeds at a notary to register a rental contract at the Registry?
- Duration and compulsory extensions to property rental contracts
- What’s the minimum legal term for a property rental contract?
- When does the compulsory legal length of a property rental contract start?
- Are the annual extensions compulsory for the tenant too?
- Under what circumstances is the landlord allowed to refuse the compulsory extension?
- Can you extend a contract beyond the first 5 or 7 years?
- Financial obligations – rental rates, deposits and expenses
- Are rental rates regulated?
- How should the rent be paid?
- Must the landlord provide a receipt after the rent is paid?
- Can refurbishment work be a substitute for rent?
- When may the landlord increase the rent?
- Can the landlord put up the rent because of improvements?
- How much can the landlord raise the rent after improvement work?
- Can the rent go down because of building work?
- Is deposit obligatory?
- Can a deposit be updated?
- Should the deposit be placed with an authority?
- How should the deposit be paid back to the tenant?
- Can the tenant be asked for further guarantees?
- Who should pay for community fees?
- Who should pay for individual expenses measured by a metre?
- Who should pay the estate agent’s commission and fees for the contract?
- Refurbishment or renovation works
- What sort of works are classed as maintenance?
- Must the landlord maintain the property in an inhabitable condition?
- Can the rental contract be terminated if the landlord does not carry out the necessary maintenance work?
- Can the tenant demand the landlord carries out necessary repairs?
- What are the tenant’s obligations regarding the maintenance of the property?
- Should the tenant inform the landlord of the required work?
- Does the tenant have to put up with any kind of maintenance work?
- If the repair work is urgent, can the tenant carry it out?
- Should the tenant carry out minor repair work?
- Is air conditioning necessary for a property to be inhabitable?
- Is the tenant obliged to paint the property?
- What is improvement work?
- What are the landlord’s obligations if improvement work is required?
- What are the tenant’s obligations if improvement work is necessary?
- What effects do improvement works have?
- What sort of work can the tenant carry out simply by informing the landlord and that do not need permission?
- What sort of work does the tenant need the landlord’s permission for?
- If the property has more than one owner, who gives permission?
- What happens if the tenant carries out work without the necessary permission?
- What sort of improvement work can the tenant carry out?
- Can a rental contract be terminated if the tenant carries out work that alters the property layout?
- What happens if the tenant’s work affects the property’s stability?
- Change of ownership of the rental property
- Does the tenant have the preferential right to buy the property if it goes up for sale?
- How should the landlord notify the tenant of the sale?
- When does the right to withdrawal work in favour of the tenant after the property has been sold to a third party?
- Does the tenant have the right to know the sales price of the rental property?
- How long does the tenant have to exercise the right to withdrawal?
- What effects does the right to withdrawal have on the owner?
- When is foregoing the right to withdrawal valid?
- Can the landlord’s or tenant’s rights be subrogated when the property is sold?
- Tenant’s separation or divorce
- Death of tenant
- What happens to a rental contract if the tenant dies?
- Who can take on the tenant’s rights?
- What is the time limit to exercise the right to take over the rental contract as the new tenant after the previous tenant’s death?
- May a tenant hand over his rental rights?
- What happens if no consent has been given?
- Ending or suspending the rental contract
- Is there an obligatory way of notifying the tenant’s wish to end the rental?
- Should the tenant compensate the landlord?
- Does the tenant have the right to leave in the obligatory legal extension?
- Must the tenant pay compensation if he leaves during the periods of extension?
- Can the tenant leave early for marriage reasons?
- Can a rental come to an end if the property becomes uninhabitable?
- Non-compliance with the contract
- When may the landlord terminate the contract?
- How may the tenant end the contract?
- Contract expiry
Whether you’re planning to rent a home when you move to Spain or to set up as a landlord with a buy-to-let investment, this is the guide you need to make sure you do everything by the book.
Of course, it’s no substitute for professional legal advice and we always advocate contacting us if you have any queries or need help with a rental problem.
(Note that in the text, he/his/himself also means she/her/herself. We’ve referred to one only to make it easier to read and do not mean to be sexist in any way.)
Concept of rental property in Spain and its characteristics
What is property rental?
Any inhabitable property whose main objective is to satisfy the tenant’s permanent necessity of somewhere to live.
As a result, in order to be let, the property must meet the following requirements:
- It must be a building, that is, an architectural structure with foundations.
- It must be habitable and satisfy the tenant’s permanent necessity of somewhere to live.
Can you apply the same legal concept of property rental to parts of it such as a garage or storeroom?
Under Spanish Urban Rental Law (Ley de Arrendamientos Urbanos/LAU), property rental may also apply to annexes of the property such as a garage or storeroom as long as they comply with these requirements:
- They must be accessories of the rented property, although they don’t have to be in the same building. However, their location must be somewhere that facilitates their use as a part of the property.
- They must be let by the same landlord renting out the property. If the landlord of the property is not the owner of the annex then the law considers that the annex has a use other than a dwelling.
Should the rental property have a First Occupation Licence to be considered inhabitable?
No, it isn’t necessary.
The property must be habitable but this condition doesn’t have to be linked to the issuing of a first occupation licence from the appropriate council. The important thing is that the building satisfies the tenant’s need for a home.
Are caravans and tents regulated by the LAU?
No, they are not buildings and are therefore not regulated by Spanish rental property law.
Should property rental contracts be for longer than 12 months?
The relevant factor that determines whether the rental is for a dwelling is its purpose: to satisfy the primary need for housing. This, not the duration of the contract, is what distinguishes a rental for housing from a short-term let.
It’s therefore vital that the contract clearly states its purpose. In case of doubt, if the contract doesn’t specify whether it’s for short-term or a different use of the property in general, the law will tend to protect the tenant by assuming that the contract is for a home.
On the other hand, it’s important to note not only the concept and meaning of the rental but also its effective use, independently of what is established in the contract.
The least important thing is therefore not whether the contract says it’s for a dwelling or an office since the condition doesn’t depend on what each party says but on the reality of the situation.
What happens if a rental is treated as short term when it’s really a permanent dwelling?
When the classification of a rental as short term is abusive, it obviously aims to avoid the duration of permanent rental contracts.
There is, therefore, nothing stopping the law from applying the rules that the contract sought to avoid.
Should a property rental contract be in writing?
The contract doesn’t necessarily have to be in writing, Spanish law allows the parties involved to choose.
As a result, it may be oral or written, but the parties must be able to prove it exists and that it includes the essential conditions for its validity, namely, consent, object and cause.
However, each party may force the other to formalize the agreement in writing. In which case, the contract should:
- Identify the tenant and landlord.
- Identify the rental property.
- State the agreed duration and initial rental rate.
- And include any other clauses that the parties have agreed.
Independently of its form, the rental contract can include certain contractual clauses that, in order to be valid, must be in writing. For example, the agreement on general expenses.
Who should provide the energy-efficiency certificate for a rental property?
The person responsible for getting an energy-efficiency certificate and keeping it for reference is the owner of the property.
The owner must present the certificate to the appropriate regional authorities for its registration and have it available for inspection if required.
When a rental contract is signed, the owner must give the tenant a copy of the energy-efficiency rating as part of the contract as well as a copy of the document containing a list of recommendations for the user.
This certificate provides the tenant with objective information about the property’s energy efficiency, giving him/her the chance to assess and compare it.
Although giving the energy-efficiency certificate to the tenant is not a formal requisite that affects the validity of the rental contract, it is an administrative requirement and the authorities may fine you for non-compliance.
Are any types of property exempt from energy-efficiency certificates?
Yes, there are two exceptions:
- Buildings with official protection because they form part of a protected area or have particular historic or architectural value, providing that any improvement in energy efficiency would alter its character or aspect unacceptably.
In this case, the appropriate authorities are responsible for determining which elements cannot be altered.
- Buildings or parts of a building whose floor space is less than 50m2.
Who can issue an energy-efficiency certificate and what must it contain?
Only an authorised professional may issue the certificate, for example, an engineer or technical architect, and it must contain the following:
- (or the part being certified) including its cadastral reference and if necessary, a description of special architectural classification.
If both parties agree pacts to improve the tenant’s rights, are they valid?
Property rental is based on pacts, clauses and determining conditions, agreed by the parties within the framework of the LAU. In this sense, the law allows there to be agreement on, for example, the tenant giving up the right to preferential purchase or not allowing the contract to be passed on if the tenant dies.
In general and by virtue of free choice, clauses that improve the tenant’s rights are valid and those that prejudice them are null and void. However, a contract may contain valid clauses that improve the tenant’s rights and others that weaken his position at the same time.
What are examples of possible clauses that are null and void in a property rental contract?
A judge in a court of law is the only person who can declare a clause in a contract null and void. Its inclusion does not mean the whole contract is invalid, just that the parts considered null and void by a court would be regarded as not a legal part of the contract.
Some examples of null and void clauses include:
- The refusal to a legal extension of the contract without bearing in mind the tenant’s need for a home.
- The tenant’s waiver of an extension when signing the contract.
- The obligatory fulfilment of the first year of the contract.
- Advance payment of more than one month’s rental rate.
- The transfer of the obligation to maintain the property.
- The landlord reserving the right to access the home to check on its state.
Can you register a property rental contract at a Property Registry?
All rental contracts, regardless of their duration, may be registered at a Property Registry. The same applies to sub-letting, transfers, subrogation, extensions and any change in the registered contract.
Is it necessary to sign deeds at a notary to register a rental contract at the Registry?
To register a rental contract or any change in one at a Property Registry, it must first be formalised in the form of deeds at a notary’s office.
Duration and compulsory extensions to property rental contracts
What’s the minimum legal term for a property rental contract?
The minimum length for a property rental contract is currently 5 years if the tenant is an individual and 7 years if the tenant is a company. It’s made up of the contractual term agreed by both parties and if necessary, a series of annual extensions that continue until they reach the minimum length by law.
Given that the minimum legal term has been changed several times, you should check the latest regulations before signing the contract.
When does the compulsory legal length of a property rental contract start?
The clock starts ticking from the moment the contract is signed. However, if the property is made available to the tenant at a later date, the length of the contract starts then and it’s up to the landlord to prove when the property became available. Weekends count as well as weekdays.
When the contract does not state a length or is not specific – for example, when it says “for years”, Spanish law understands that its duration is for one year.
This does not affect the tenant’s right to annual extensions until the minimum length by law.
Are the annual extensions compulsory for the tenant too?
The extensions are voluntary for the tenant who may opt-out of them at any time. He may choose not to renew the contract by giving the landlord at least 30 days’ notice before the contract comes to an end.
On the other hand, automatic extensions are compulsory for the landlord.
Under what circumstances is the landlord allowed to refuse the compulsory extension?
Once the initial contractual term is over (for example, a year when one year has been agreed), the landlord may reclaim the property if he needs it for a permanent home for himself or a close member (children or parents) or spouse in the case of legal separation or divorce.
This possibility of reclaiming the property is clearly regulated by law and is termed as the right to refuse an extension, not as a right to waiver.
It’s therefore a right that can only be exercised at the end of the first term of a contract or one of its extensions.
The landlord must inform the tenant of the circumstances and give at least two months’ notice before the date the property is required. If the parties do not agree on an alternative, the tenant must leave the rental property within those two months.
For their part, the landlord or relatives must occupy the property within three months of the end of the contract. If they do not, the tenant has the following two options:
- To reoccupy the rental property for up to five years while respecting the contractual terms in place at the time the contract ended, The tenant also has the right to be reimbursed for any expenses incurred by having to leave the property.
- To be reimbursed with the equivalent of one month’s rent for every year that remained on the contract until the five year maximum.
In these cases, there’s no need to prove that the landlord acted in bad faith, just that the property has not been occupied within the stipulated time (three months).
However, there are some instances of the landlord not occupying the property when the tenant has no right to move back in or receive compensation. These are when the landlord failed to occupy the property because of events that:
- are classed as such by a legal regulation – for example, illness.
- was unpredictable – for example, an earthquake.
- was predictable but inevitable – for example, a pandemic.
Can you extend a contract beyond the first 5 or 7 years?
Once the first 5 or 7 years have passed and providing that neither party had informed the other of their intention not to continue with the rental, the contract is extended for yearly periods up to a maximum of 3.
The landlord must abide by this extension. However, the tenant is not obliged and may interrupt it after each of any of the three years as long as he gives the landlord a month’s notice.
If either party does not want to extend the contract after the minimum legal term of 5 or 7 years, they must notify the other party and give the following notice:
- A minimum of 4 months if the landlord does not wish to extend the contract.
- A minimum of 2 months if it’s the tenant who does not want to stay on.
Financial obligations – rental rates, deposits and expenses
Are rental rates regulated?
The initial rate is freely agreed upon by both parties. There is currently no limit on its amount or the possibility of changing it once it has been agreed upon.
Payment may be made in kind, a circumstance that is only limited by good faith or local practice.
The existence of a rental rate is an essential element of the contract and it must be established with an acceptable exactitude of amount and period in time, otherwise, we would be talking about a different kind of contract.
However, there is nothing to stop the parties from agreeing on a period of non-payment of rent because of moving house, refurbishment work or other reasons.
How should the rent be paid?
Unless otherwise agreed, rental payments are monthly and should be made in the first 7 days of the actual month (i.e. in advance), not in the following month.
It is possible to agree on how often and when payment is made, but the landlord may not demand more than one month’s payment of rent in advance, even when quarterly or annual payment has been agreed upon, not counting the deposit. If this clause is included, a court would declare it null and void.
This limitation does not affect any agreement on additional guarantees other than more than a month’s payment in advance.
Payment is made by the means agreed by the parties and if this is not specified, it should be in cash and at the rental property. Any payment form that provides proof it took place is valid such as 30-day payment bills or payments into the landlord’s bank account.
Must the landlord provide a receipt after the rent is paid?
The landlord must give the tenant a receipt for payment unless the parties have agreed that payment is made through means that prove the tenant has paid, for example, by bank transfer.
The receipt must include the amount paid for the different concepts that make up the total rental amount (e.g. rent, utility bills) and specify the rental rate.
Can refurbishment work be a substitute for rent?
The parties are free to agree that, for a certain period, the tenant’s obligation to pay rent is substituted, entirely or partly, by the commitment to refurbish the property under the agreed terms and conditions.
If the parties have agreed to substitute rental payment for refurbishment, the tenant may not ask for any compensation for the cost of the work at the end of the contract since this would mean the reimbursement of rental payments.
In this case, it’s essential to define the work being carried out since it’s the tenant’s compensation in the contract for the rent he should pay, albeit in kind. The tenant’s obligation should therefore be understood as having to produce results and he must carry out all the work and pay all the necessary costs to achieve the agreed result.
Non-compliance of this agreement by the tenant can lead to the contract being declared void and eviction.
When may the landlord increase the rent?
During the contract’s duration, the rent can only change on a yearly basis and by the agreed terms. However, if there is no express agreement, the rent does not change.
Although both parties are free to agree on one system or another, any rental changes must be updated according to official figures so that the rent may go up or down. Otherwise, the agreement means an annual increase in rent.
Clauses that leave increases and the amount up to the landlord’s discretion are not permitted under Spanish law because this would open the contract’s compliance to the will of just one of the parties.
If the parties agree on a review mechanism that does not specify an index or reference, rent will be reviewed annually with reference to the “Indice de Garantía de Competitividad” (Competitive Guarantee Index).
To review the rent, all three of the following are required:
- The contract includes a clause for a review.
- The variation in the applicable index for the previous 12 months.
- And notification in writing to the other party of the percentage variation and if required, proof from the National Institute of Statistics.
The landlord can only ask for payment of the new rental rate from the month after the notification onwards.
A rent review is not compulsory, but either party can call for it. A prior waiver of the review is not permitted because, in the hypothetical case of a decrease in the applied index, the tenant would lose out.
If no review takes place, it’s understood that it is waivered, but not for the percentage variation that accumulates until it is applied.
Can the landlord put up the rent because of improvements?
Regarding the possibility of putting up the rent because of improvements carried in the rental property, there are two scenarios:
When there’s an agreement between the landlord and tenant to carry out the work, it may take place at any time from the start of the contract and gives the landlord the right to raise the rent.
This is without prejudice to the tenant’s right to be compensated for the expenses incurred from the work or to have a reduction in rent while the work is taking place to compensate for not being able to use part of the property.
If the improvement work is carried out by the landlord and it could not be reasonably delayed until the end of the rental contract, the landlord may increase the annual rent if the following conditions are met:
- The rental contract has been in place for the minimum legal term. The landlord may not raise the rent for improvement works carried out beforehand or even after this legal minimum.
- The tenant has received notification in writing.
- There are no agreements otherwise. An agreement to the contrary does not have to be writing and may be verbal. In any case, it’s the tenant’s responsibility to prove such an agreement exists if the landlord wishes to contest it.
It’s therefore very important that the term “improvements” be understood in its literal sense. The landlord can therefore only put the rent up when living conditions in the property have been improved and are not necessary repairs. This is because the landlord is obliged to carry out all necessary repairs to maintain the property in habitable conditions as agreed without having the right to increase the rent.
The rent increase takes place in the month after the works have been completed and the landlord has notified the tenant in writing of the amount. This notification must include:
- The calculations that lead to the specified amount.
- Copies of documentation that list the cost of the work carried out.
The tenant may refuse to pay the increase in rent for the improvement works until he receives the above documentation.
How much can the landlord raise the rent after improvement work?
The annual increase in rent is calculated by applying legal interest to the money invested in the work plus 3%, bearing in mind the following:
- If any of the work was paid for by subsidies, these must be subtracted from the final amount.
- The interest rate to be applied is the one when the work is completed.
- The increase in rent cannot be more than 20% of the amount paid previously.
If the work affects several properties, the rent rise is calculated depending on whether the properties are in the same complex (e.g. apartments).
When the improvements are for several properties in the same building, the landlord must divide the costs of the work proportionately between them according to the share each property has in the communal facilities. The increase may not be higher than 20% for any of the properties.
When the properties are not in the same building or complex, the costs of the work are shared proportionately between the properties according to the agreement between the landlord and tenants. If there is no agreement, it is divided proportionately depending on the size of each rental property.
Can the rent go down because of building work?
To get a reduction in rent because of building work, the tenant must be unable to use part of the property. The bother and inconvenience that go with any refurbishment work are not reasons to reduce the rent.
If the tenant is unable to use part of the property, the rent reduction depends on whether the work is for maintenance or improvement.
- Maintenance work – the tenant has the right to pay lower rent if the work lasts for longer than 20 days and means part of the property is unusable.
- Improvement work – the rent reduction starts on the same day as the work and the tenant must receive compensation for any expenses incurred because of it.
- the tenant has the right to pay lower rent if the work lasts for longer than 20 days and means part of the property is unusable.
- the rent reduction starts on the same day as the work and the tenant must receive compensation for any expenses incurred because of it.
Is deposit obligatory?
Yes, a deposit is compulsory and must be paid when the contract is signed.
The deposit has two legal sides, both of which have separate obligations:
- Civil law – the tenant owes the landlord the deposit even if it has not been agreed.
- Administrative law – the landlord must place the deposit with the appropriate public authority if this requirement is law in the region where the property is located (e.g. Andalusia).
The deposit must be paid in cash and no other form of guarantee is acceptable, whether it’s real or personal. It must be equivalent to one month’s rent.
The LAU is very clear on the deposit and states that it is not negotiable for the landlord who must claim it and it cannot be more than one month’s rent.
Non-compliance by the landlord both for claiming the deposit and placing it with the appropriate authority can attract a fine. The contract may also be declared null and void by law if the deposit is not paid or updated (see below).
If the tenant transfers the contract, a deposit is not due because there is no change to the property rental contract. However, the new tenant must pay the previous tenant the amount the latter gave as a deposit at the time of signing the contract plus any extra amounts if the deposit has been updated.
Can a deposit be updated?
Within the minimum legal term of the contract, the deposit does not change. After this period, updates to the amount are voluntary – each time the contract is extended, the parties can request that it is increased or decreased until it is the equivalent to a month’s rent at the time.
When a rental contract is longer than the stipulated minimum legal term, updates to the deposit will depend on what was agreed in the contract.
If there is no specific agreement, the understanding is that whatever was agreed on updates to monthly rental payments also applies to the deposit.
Should the deposit be placed with an authority?
Some regions in Spain make it mandatory to place the deposit with the appropriate authority in the region.
Once the landlord informs this authority of the end of the contract, the deposit must be returned. On principle, the deposit is refunded without legal interest unless more than a month has passed since the contract ended. If this is the case, the legal interest at the time will be added.
At the moment, most regions have their own regulations for this matter and some have removed the obligation to place the deposit with them.
In any case, to promote transparency and the exchange of information between the different public administrations, the regional authorities require the landlord to provide at least the following information:
- Personal details identifying both parties, landlord and tenant, including their addresses for notification purposes.
- Information about the rental property including the year of construction, year and type of refurbishment if applicable, size, postal address, cadastral reference and energy-efficiency rating.
- Information about the rental contract including the rent and how it is updated, deposit and if applicable, additional guarantees, length of rental, how utilities are paid for and if the property is furnished or not.
The following table shows which regions in Spain require landlords to place the deposit with them, the law governing this regulation and which authority is responsible for holding the deposit.
|Region in Spain||Mandatory placement of deposit||Regional regulation||Authority responsable for the regulations|
|Andalusia||Yes||L Andalucía 8/1997 art.82 s.||Agencia de Vivienda y Rehabilitación de Andalucía (AVRA)|
|Aragon||Yes||L Aragón 10/1992 art.2 s.||Dirección General de Vivienda y Rehabilitación|
Departamento de Vertebración del Territorio, Movilidad y Vivienda
|Asturias||No||D Asturias 48/2010|
|Balearics||Yes||L Baleares 5/2018 art.55 s.||Instituto Balear de la Vivienda (IBAVI)|
|Canaries||Yes||L Canarias 2/2014 art.2 a 16|
D Canarias 45/1985
|Instituto Canario de la Vivienda|
|Cantabria||No||L Cantabria 9/2017 art.16|
|Castilla-La Mancha||Yes||D Castilla-La Mancha 98/1984|
Orden Castilla-La Mancha 5-3-1985
|Dirección General de la Vivienda, Urbanismo y Planificación Territorial de Castilla-La Mancha|
|Castilla y León||Yes||L Castilla y León 9/2010 art.37 a 42||Cámaras de la Propiedad Urbana de Castilla y León|
|Catalonia||Yes||L Cataluña 13/1996|
D Cataluña 147/1997
|Instituto Catalán del Suelo (INCASÒL)|
|Extremadura||Yes||D Extremadura 67/1985||Consejería de Hacienda y Administración pública – Caja general de depósitos|
|Galicia||Yes||D Galicia 42/2011||Instituto Gallego de Vivienda y Suelo (IGVS)|
|La Rioja||No||L La Rioja 7/2014 art.52|
|Madrid||Yes||D Madrid 181/1996|
L Madrid 12/1997
|Agencia de Vivienda Social|
|Murcia||No||DL Murcia 1/2021|
|Navarra||No||DF Navarra 240/1998|
|Basque Country||Yes||D País Vasco 42/2016||Servicio Bizilagun – Departamento de Vivienda, Obras Públicas y Transportes|
|C.Valenciana||Yes||D C.Valenciana 333/1995||Consejería de Hacienda y Administración Pública|
|Ceuta||Yes||D 11-3-1949 (*)||Empresa Municipal de la Vivienda de Ceuta (EMVICESA)|
|Melilla||Yes||Ordenanza de Fianzas (BOME 30-1-01)||Empresa Municipal de la Vivienda y Suelo de Melilla (EMVISMESA)|
How should the deposit be paid back to the tenant?
The remainder of the deposit should be returned to the tenant when the rental period finishes because it is a guarantee that comes to an end with the contract.
However, if there are outstanding issues (see below), the landlord is entitled to keep the corresponding amount and only return to the tenant the difference between the deposit and the amount considered owing.
Examples of concepts that the landlord may deduct from the deposit include:
- Non-payment of rent, utilities, refuse tax and other expenses that were the tenant’s responsibility.
- Repair of damage caused in the property with the exception of elements that deteriorate naturally over time and are not caused by the tenant’s misuse.
The onus is on the landlord to prove why all the deposit or part of it is not returned once the rental is over and he must therefore justify all amounts not paid back.
The landlord is obliged unless there are outstanding issues (those described above) to return the deposit as soon as the rental term has come to an end. If a month has passed since the tenant handed back the keys and the deposit has not been returned, legal interest starts to apply.
Can the tenant be asked for further guarantees?
As well as the deposit, the tenant can also be asked for additional guarantees if the landlord wishes. They can be used to cover damage to the property, non-payment of rent or any other of the tenant’s responsibilities as set out in the contract.
While the deposit must always be paid in cash, the content of additional guarantees can be agreed by the parties. It could consist of an object, a third-party guarantor such as a bank or private guarantee, mortgage or cash deposits.
However, whatever form it takes, the value of the additional guarantee may not be more than two month’s rent.
Who should pay for community fees?
Community fees are those for maintaining the property and its services as well as those that correspond to the rental property and its content. These expenses cannot be itemised because it is either impossible or has never been done.
If the property is part of a building with other properties in it (e.g. an apartment), the expenses depend on its share of the communal facilities or the property’s size.
On principal, these expenses should be paid by the landlord, although the parties can agree for the tenant to pay them. For this sort of agreement to be valid, it must be expressly agreed in writing and the annual amount calculated at the time of signing the contract.
The agreement on community fees is valid for expenses that are ordinary and paid annually. They include general repairs and adjustments and increases to the annual fees caused. They do not include extraordinary expenses outside the usual annual budget, which led to extra community fee payments.
The tenant has the right to refuse to pay any community fees that he considers outside the agreement. However, the tenant can only refuse to pay the landlord since the community of owners has no part in the agreement by the tenant to pay community fees. According to Spanish law, the payment of community fees is the responsibility of the owner.
If such an agreement exists during the minimum legal term of the contract (currently 5 to 7 years), the amount the tenant must pay for community fees can only increase on an annual basis and never by a percentage that is more than twice the increase in rent.
After the minimum legal term, there are no limitations and the increase can be of any amount. In addition, the tenant has no right to oppose this.
Payment of community fees must be made in the same way as rental payments. The receipt must include details of each expense separately.
Who should pay for individual expenses measured by a metre?
The tenant is responsible for paying for services in the property, measured by a metre, which may be one installed by public utility providers or one installed by the landlord or community of owners to determine the individual use of each property even when the whole community of owners is billed as a whole.
There is no limit to the amount paid, which depends on the service charges and the use made by the tenant.
However, the agreement to pass the responsibility for payment of these expenses to the landlord is valid. For example, both parties may agree that utility charges are included in the monthly rent.
Who should pay the estate agent’s commission and fees for the contract?
When a third party intervenes in the rental, for example, an estate agent or other type of intermediary for any kind of service such as advertising the property and advising on and drafting the contract, they charge fees, which are usually the equivalent of one month’s rent. All these expenses are usually the tenant’s responsibility.
However, if the contract is signed after 6 March 2019 and the landlord is a company, the landlord is responsible for their payment.
This regulation also applies to contracts signed between 19 December 2018 and 23 January 2019. However, the landlord is not obliged to pay them (even if it’s a company) if the tenant was the party that contracted these services.
Refurbishment or renovation works
What sort of works are classed as maintenance?
The term “maintenance works” (obras de conservación in Spanish) includes a wide range of concepts from repairing the building’s structure or its insulation to changing the hot water tank, for example. Small repairs such as blocked pipes, broken locks and scrapes on the walls are also included.
Must the landlord maintain the property in an inhabitable condition?
Yes, the landlord is obliged to carry out the necessary repairs to maintain the property in an inhabitable condition so that it may be used as agreed.
The landlord must maintain the property in the same condition as when the rental contract was signed as long as:
- The tenant has used the property and its contents correctly and is not responsible for the deterioration. (If this isn’t the case, it’s the tenant’s responsibility for the repairs.)
- The work involved is maintenance work, not small repairs that the tenant should carry out.
- The work is correcting wear and tear suffered in the property, not rebuilding it since in this case, the state of the property would bring an end of the rental contract.
Since it’s the landlord’s obligation to maintain the property, the tenant cannot demand the repair of defects that were present when the contract was signed.
This is because the tenant was already aware of these and accepted them when he inspected the property before signing. Exceptions to these are hidden defects that deteriorate the property’s condition.
If maintenance work is carried out, the landlord has no right to raise the rent.
Any clauses in the contract that oblige the tenant to carry out all repairs regardless of their origin go against the LAU regulations. They are therefore null and void clauses that should not be included in the contract.
Can the rental contract be terminated if the landlord does not carry out the necessary maintenance work?
No, the landlord’s lack of taking responsibility for maintenance work is not usually considered a reason to terminate the contract.
However, it does give the tenant the right to receive compensation for damages suffered in his home.
Non-compliance by the landlord does not give the tenant the right to stop paying rent. The landlord’s obligation to maintain the property and the tenant’s obligation to pay rent are not reciprocal and therefore do not condition one another. They are independent obligations.
Can the tenant demand the landlord carries out necessary repairs?
Yes, the tenant may stipulate the repairs, or, if they are urgent, carry them out him/herself and claim the cost from the landlord and even terminate the contract.
However, the tenant can never stop paying the rent for this motive.
A totally different scenario is if the property becomes completely uninhabitable because of the lack of repairs, then the tenant may terminate the contract and with it, the obligation to continue paying rent.
What are the tenant’s obligations regarding the maintenance of the property?
The tenant is responsible for the deterioration or loss of any part of the property caused by him/her or anyone in the house unless it was not their fault.
The tenant is therefore obliged to use treat the property as if it were his own using it for the agreed use. At the end of the contract, he must return the property in the same state as it was when he signed the contract. It is assumed unless proved otherwise, that the tenant received the property in a good state.
When damage occurs because the tenant fails to meet his obligations to maintain it, and not because of natural wear and tear, the landlord is not obliged to carry out the repair work.
Unless otherwise shown, the tenant (or other people in the house) is presumed responsible and must therefore show that the damage or deterioration is not his fault and that he took all reasonable care to avoid the said damage.
If this cannot be shown, the tenant is responsible for all damage caused in the property.
If the damage is due to the willful misconduct by the tenant, the landlord may terminate the contract and demand that the damage be repaired.
If it is due to negligence on the part of the tenant, the landlord may demand the repair plus compensation if it is not possible to terminate the contract.
Should the tenant inform the landlord of the required work?
Yes, the tenant should inform the landlord as soon as possible of any required work, providing proof (personal or professional) of the state of the property.
Failure to do this could mean the tenant is obliged to compensate the landlord for lack of communication on the necessity of repair work and the refusal to provide proof of the damage.
On the other hand, the non-communication of the necessity of repairs conditions the tenant’s possibility of compensation because if there is no information, it is difficult to prove a landlord’s willful misconduct or negligence in not carrying out the required repairs.
The notification can take any form as long as it is enough to let the landlord know that repairs need doing. Since no particular form of notification is specified in the LAU, the tenant should notify the landlord in such a way that there’s proof, i.e. in writing.
The timescale for the notification is equally flexible and depends on the sort of damage, the inconvenience it causes the tenant and the cost of repair.
Does the tenant have to put up with any kind of maintenance work?
Since one of the landlord’s obligations is to allow the tenant to enjoy the property in peace and quiet, the tenant is only obliged to put up with maintenance work that cannot be delayed until the end of the rental contract because of its urgency.
The tenant can only refuse to allow the work to go ahead if the repairs are not essential to avoiding further deterioration of the property and they would prevent further costs. A tenant’s unreasonable refusal opens the door to compensation for the landlord.
It’s the landlord’s responsibility to decide whether work cannot be avoided until the end of the contract and if there’s a discrepancy, he must prove it.
If the work is unavoidable as per the above conditions, the tenant must put up with the work, however inconvenient they are or if they mean he cannot use part of the property temporarily.
If the work takes longer than 20 days, the landlord must reduce the rent. However, when maintenance work on the property makes it uninhabitable, the tenant has the option to temporarily pause the contract or end it.
If the repair work is urgent, can the tenant carry it out?
The tenant can carry out urgent repairs at any time and after informing the landlord as long as the repairs are necessary to avoid imminent damage or grave inconvenience and are not a result of willful negligence by the tenant. He has the right to demand immediate reimbursement from the landlord.
Although the tenant does not need the landlord’s permission, he must inform the landlord before the work is carried out so that the landlord is aware of the state of the property and has the opportunity to carry it out him/herself.
The tenant has the option to carry out the works, but this is never an obligation. His only legal obligation is to inform the landlord of the need to carry them out.
The tenant may deduct the cost of the work from the next rental payment. If the landlord refuses to reimburse the tenant for the repair work by claiming it was not urgent, it will be a matter for a court to decide who should pay for it.
Should the tenant carry out minor repair work?
It’s the tenant’s responsibility to carry out minor repairs caused by the usual wear and tear in the property. However, the definition of minor repair work is often controversial.
It does not include material damage caused by the tenant, accidentally or on purpose and the tenant is obviously responsible for this sort of repairs.
It does, however, include regular maintenance of the property that is part and parcel of the tenant’s obligation to return it in the same state as he received it. Exceptions to this obligation are when inevitable damage occurs.
It’s therefore understood that a tenant’s obligation is to repair usual wear and tear (maintenance) but not repair worn-out damage (obsolescence). In the latter’s case, consideration is also that the lifetime of an object may be shortened through misuse or because it has not been maintained properly or regularly.
In any case, it’s a court matter to set a limit on repairs and the length of the rental period is also an important consideration.
When the rental period comes to an end, the landlord has the right to insist that the tenant carries out all the necessary minor repairs to ensure the property is returned in the same state as it was originally rented, except those caused by age or unavoidably.
Is air conditioning necessary for a property to be inhabitable?
Installing air conditioning is not considered necessary, but rather as useful or an improvement. Its repair is included with other appliances and depends on its use.
As a result, its repair is minor and the tenant’s responsibility.
Is the tenant obliged to paint the property?
Repair to paintwork is the tenant’s responsibility when there has been usual use of the walls. For example, fingermarks around light switches are considered usual, but graffiti, holes or scratches are not.
What is improvement work?
Anything carried out voluntarily. As a result, improvement work cannot be classed, in principle, as repair or maintenance work.
It includes work that leads to a noticeable change (financially, socially or esthetically) and leads to an increase in the property’s value, utility or returns or gives it better functionality or comfort.
What are the landlord’s obligations if improvement work is required?
He must inform the tenant in writing at least three months before the work is due to start. The letter must contain the following information:
- The sort of work to allow the tenant the chance to delay it and weigh up any inconveniences it may cause.
- The start date, which must be at least three months after the notification unless the tenant has already authorized an earlier date.
- The length of the work so that the tenant is aware of how long any inconveniences will last.
- The estimated cost of the work to allow the tenant to calculate the increase in the rent.
When the tenant receives this notification, he has the following options:
- Terminate the contract within one month of the notification unless the work is minimal or has no effect on the property.
- Accept the work taking place.
- Refuse to allow the work to take place by showing that it is not justified and can reasonably be delayed.
What are the tenant’s obligations if improvement work is necessary?
The tenant must allow any improvement work that cannot reasonably be delayed until the end of the contract.
A delay is not possible in the following circumstances:
- Work that is subsidised by local, regional or state authorities with a deadline for completion that must be met in order to receive the subsidy.
- Work that the landlord is obliged to carry out by the community of owners.
- Work conditioned by the season.
The classification of the improvement work’s importance is, in principle, down to the landlord, but the tenant has the right to exercise his opposition.
What effects do improvement works have?
Improvement works have the following consequences:
- If the tenant has chosen to terminate the contract because the nature of the work allows it, the rental period comes to an end two months later. Work may not start during these two months.
- If the tenant has decided to put up with the work, he has the right to a reduction in the rent proportional to the part of the property that is unusable as a result and to compensation for any costs paid because of the work.
- The landlord may have the right to increase the rent.
What sort of work can the tenant carry out simply by informing the landlord and that do not need permission?
The tenant must notify the landlord but does not need permission for the following:
- Work that does not change the layout of the property or any of its accessories.
- Urgent repairs and those caused by wear and tear.
- Work adapting the property to the needs of occupants who are disabled or (since June 2013) over 70 who live there permanently. However, the tenant must return the property to its original state at the landlord’s request at the end of the contract.
What sort of work does the tenant need the landlord’s permission for?
- Any work that leads to a change in the layout of the property or its accessories.
- Any work that leads to a decrease in the property’s stability and safety.
If the property has more than one owner, who gives permission?
When a property has several owners, work that changes its layout must be authorized unanimously because it is classed as a disposition, not administration. However, if the tenant only deals with one of the co-owners, he has no reason to know what the relationship is between them and therefore obtaining permission from just the one owner is sufficient.
While the legal representative can authorize the work, the administrator or representative must have express permission from the owner since the authorisation has legal consequences beyond an administrative act.
Regarding the reach of the authorisation, Spanish law considers that all rentals implicitly have permission to carry out the necessary work to adapt it to its specific purpose, although this authorisation is not valid indefinitely. For this reason, using the authorisation within a rental contract for improvement work outside the minimum legal length of the contract is against the law.
Permission in writing for the work to take place may be given before, during or after the work takes place.
If the landlord has given his consent to the work, he may only demand that the property be returned to its original state in the following circumstances:
- It was expressly stated when permission was granted and
- When the work leads to a decrease in the property’s stability or safety.
What happens if the tenant carries out work without the necessary permission?
If the tenant goes ahead with work without the landlord’s permission, the contract may be terminated and the landlord may also choose to either:
- Demand that the tenant returns the property to its original state, or
- Keep things as per the change, in this case, the tenant has no right to compensation.
The landlord may only demand that things are returned to their original state when the contract comes to an end or if it is terminated early.
What sort of improvement work can the tenant carry out?
The LAU does not regulate the sort of improvements a tenant may carry out so their nature is agreed by both parties and by extension, the Spanish Civil Code of Law.
The tenant may therefore carry out improvements as long as they are not prohibited or restricted in the rental contract. For example, useful improvements that do not change the property’s shape or form or decrease the building or its accessories’ stability or safety.
The tenant has no right to compensation from the landlord but is allowed to remove the improvement providing it causes no detriment to the property.
On the other hand, the tenant must compensate the landlord for damage caused to the property, fully or in part by the improvements made.
Can a rental contract be terminated if the tenant carries out work that alters the property layout?
Work that changes a property or its accessories’ layout must be considered case by case. This is because the concept of layout is not defined generically or abstractly by any law and it implies the need for a comparison of the property’s state before and after the work.
The change in layout is not in place at the time of signing the rental contract or at any time afterwards, but its state immediately before work started. In addition, the particularities of the property must be considered.
In general terms, the indeterminate legal concept of a property’s layout refers to its inside and outside walls, size, form and distribution of the spaces between the walls that enclose the rented property, horizontally as well as vertically.
On the other hand, case law says that for a change in a property’s layout to be legally significant the work must concern the so-called fixed or factory structure, embedded in the walls and ceilings and with construction materials.
When the change in the layout is insignificant, there is no justification for terminating the contract.
What happens if the tenant’s work affects the property’s stability?
The landlord may demand that the tenant immediately returns the property to its original state if the work has led to a decrease in the stability and safety of the property or its accessories.
For this to happen, there is no need to wait until the end of the contract.
Even when the landlord has given permission to carry out certain work, if it subsequently causes a decrease in stability of safety, he may demand a return to the original state, even at the end of the rental period.
The tenant’s intention to affect or not the stability or safety of the property does not influence this regulation.
Change of ownership of the rental property
Does the tenant have the preferential right to buy the property if it goes up for sale?
When the rental property is put up for sale, the tenant occupying it has the first right to buy ahead of other possible buyers.
To exercise the right to preferential purchase, the tenant has the following options:
- Right to first refusal, before the sale.
- Right of withdrawal, after the sale.
However, this right does not prevail absolutely in the face of any buyers and furthermore, the parties may agree to not include it in the contract.
This right has preference over any other similar right with the exception of:
- The recognised right of withdrawal held by the co-owner of the property. This preference over the tenant is logical since Spanish law considers jointly held assets to have uneconomical and transient status whose termination should be facilitated.
- The conventional right of withdrawal in favour of the previous owner as stated in the Property Registry before the tenancy since the consequences of the tenancy should not fall on anyone who stated their preference right to buy in the Registry.
The object of the preferential right to buy is the rental property. However, if the tenancy includes other accessories let to the same tenant, the right should extend to all of them, not just the property.
If both parties agreed in the contract that the tenant would give up this right, the landlord must inform the tenant of the decision to sell the property at least 30 days before the sale of the property.
There is no preferential right to buy when:
- The rental property is sold together with other properties or premises belonging to the landlord in the same building.
- All the properties and premises in the building are sold as one lot by different owners to one buyer.
In these cases, it makes no difference whether the property is part of a building with a community of owners or not.
However, if there’s only one property in the building, the tenant still has the right to first refusal and withdrawal because the above exceptions are for multiple sales in which owners who wish to sell their properties could be affected by a tenant’s right to buy.
How should the landlord notify the tenant of the sale?
The notification must in an irrefutable manner, e.g. in writing, and should include the price and other essential conditions of the sale.
The effects of the notification end 180 days after it is issued. If after this time, the landlord has not signed a sales contract with the same buyer he wants to sell the property to, he must notify the tenant.
To register the sale of a rental property to a third party at the Property Registry, proof must be shown of the above notification.
When does the right to withdrawal work in favour of the tenant after the property has been sold to a third party?
The legal right to withdrawal is the right to acquire an asset, through purchase or in kind, in the same conditions stated in the contract.
The tenant may exercise the right to withdraw in the following circumstances:
- When the landlord owner has not notified him/her of forthcoming sale.
- When the notification did not include any of the required information.
- When the price of the sale is lower than that notified or the essential conditions are not fulfilled.
Does the tenant have the right to know the sales price of the rental property?
Yes, the buyer must notify the tenant in writing of all the essential conditions of the sale by handing over a copy of the title deeds or sales document.
This notification must be made even if the landlord complied with his obligation to notify the tenant of the sale and the tenant did not exercise the right to the first refusal.
How long does the tenant have to exercise the right to withdrawal?
30 days from receiving the notification the buyer must send it to the tenant.
What effects does the right to withdrawal have on the owner?
The right to withdrawal means the buyer is entitled to reimbursement for:
- The price of the sale. If the real price and that stated in the title deeds are different, the tenant must pay the real price regardless of what is stated in the deeds.
- All costs of the sale, for example, the contract costs and any other legitimately made.
- All necessary costs on the asset sold.
To exercise the right to withdrawal, a previous payment or a commitment to it must be made in cash. The effective purchase by the tenant exercising the right to buy happens when payment is made.
When is foregoing the right to withdrawal valid?
It’s valid when the event governing the right is exercised, i.e., when the property is sold.
The contract cannot include a clause with a generic, upfront and wide-ranging foregoing of this right.
Can the landlord’s or tenant’s rights be subrogated when the property is sold?
Yes, and these circumstances have different regulations depending on the date of the rental contract.
Tenant’s separation or divorce
When the tenant separates or gets divorced, the non-tenant spouse may continue to use the rental property if so designated in the legal agreement.
The spouse allowed this use, either permanently or for a longer period than that remaining in the rental contract, becomes the holder of the contract. The original tenant disappears from the contract and no longer has the right to use the property.
When a change in holder takes place, Spanish law removes the landlord’s right to claim against the previous tenant and contract holder for any non-compliance of the contract, including non-payment of rent.
The original tenant’s spouse must inform the landlord of their wish to continue to use the property within 2 months of receiving official notification of the separation or divorce.
The spouse should provide a copy of the legal document, but to protect the right to privacy, just the part that affects the use of the property.
Death of tenant
What happens to a rental contract if the tenant dies?
On principle, the death of the tenant leads to a termination of the rental contract because the latter exists due the personal relationship between the landlord and tenant.
However, a rental contract may continue if people with the right to take on the contract expressly state the desire to do so.
In rental contracts whose initial duration is longer than the minimum legal length, both parties may agree that there’s no right to take on the contract if the tenant dies.
Or that the rental contract terminates at the end if the tenant dies beforehand. However, since 3 March 2019, it is not possible to forego the right to take on a contract if the people allowed this right are particularly vulnerable, minors, disabled or over 65.
Who can take on the tenant’s rights?
- The tenant’s spouse living with him/her at the time of death.
- The person living permanently with the tenant in similar circumstances to a spouse for at least 2 years before the death, unless they had children in common, in which case living together suffices.
- The tenant’s descendants, who at the time of death were in his charge or had lived with him/her on a permanent basis for the previous 2 years.
- The tenant’s ascendants who had lived with him/her on a permanent basis for the previous 2 years.
- The tenant’s siblings who had lived with him/her on a permanent basis for the previous 2 years.
- Others who have a disability of at least 65% and are at least third-degree relatives of the tenant and had lived with him/her on a permanent basis for the previous 2 years.
Priority is given as per the list above. If there’s concurrence among any of the above and no unanimous agreement on whom should benefit from the right to take on the contract, the following priorities apply:
- Parents over 70 take priority over descendants.
- Among descendants and ascendants, nearer relations have preference and among siblings, full rather than half.
Equal cases are resolved as follows:
- Anyone with a disability of at least 65%.
- Anyone with higher family responsibilities.
- The youngest descendant, oldest ascendant or youngest sibling.
The decision must be made unanimously – a simple or reinforced majority is not enough.
In this case, the usual succession mechanisms do not apply to the right to take on the rental contract. For example:
- A tenant may not designate a successor because this legal relationship is not part of the inheritance.
- If the landlord receives several notifications from people considering themselves to be the beneficiaries, he does not have the right to choose who takes on the contract.
- If there is just one beneficiary, this person is the only one who can take on the contract and there’s no right to substitution or the possibility to transfer this right to his own heirs.
What is the time limit to exercise the right to take over the rental contract as the new tenant after the previous tenant’s death?
The rental contract terminates 3 months after the tenant’s death if the landlord has not received notification in writing of the death (including the official death certificate) and the identity of the tenant wishing to take over the contract.
The new tenant should indicate their relationship with the deceased and give proof of fulfilling all the legal requirements to take over the tenancy.
If the contract is terminated, all who were entitled to take over from the deceased tenant are equally obliged to pay the rent for those 3 months, unless they have expressed foregone their option to take over the tenancy. They must convey this in writing to the landlord within one month of the death.
If the landlord receives on time and in the correct form several notifications from people claiming to be beneficiaries of the right to take over the contract, he may consider them to be equally bound to the tenant’s obligations for as long as they continue to claim.
To continue to enjoy the right to take over the tenancy, notification is compulsory even though a unanimous decision is reached later to designate a beneficiary.
However, this agreement does not necessarily have to be made or notified within this period of 3 months.
May a tenant hand over his rental rights?
Yes, if the landlord has given his consent.
In theory, consent must be in writing, but it’s understood that if the landlord agrees verbally, he cannot deny the transfer of rights or end the contract since this would go against his own actions.
Consent does not have to be given before the rights are handed over – the contract can be transferred and the landlord agrees afterwards. However, if consent is not given, the contract is null and void.
What happens if no consent has been given?
Handing over rental rights to someone else without the landlord’s consent gives the landlord the right to end the contract.
The absence of consent does not mean the contract is null and void or revocable but is regarded as an example of the tenant exceeding his power to exercise rights on his own position. It has no effects for the landlord until he grants consent, tacit or express, or not.
It is the tenant’s responsibility to show proof of consent.
Can a rental property be sub-let?
Sub-letting entails the introduction of a third party in the rental property with a continuation of the tenancy and no deviation from the original contract. It, therefore, implies that the said property continues to satisfy the tenant’s need for a permanent home.
The rental property may only be partially sub-let and with prior written consent from the landlord. The lack of this consent gives the landlord the right to end the contract.
The sub-let price must be the same or lower than the total rent, particularly when the permitted sub-let is for part of the property, but it may never be higher. If a higher price is set, the sub-letter(s) may request a reduction in rent because Spanish law does not contemplate foregoing this rule.
There may be different sub-letters at the same time providing that the tenant keeps part of the property for his own use and that the price paid by the sub-letters does not exceed the total rent paid by the tenant.
If the sub-let is for the entire property and the tenant has to leave, the transfer is against the law.
In any case, the right to sub-let terminates when the tenant’s contract ends. If the tenant chooses to end his contract before its legal limit, sub-letting also ends, notwithstanding compensation for any damage and the possible existence of a fraudulent agreement.
The sub-letter’s obligations to the landlord are:
- The same as those agreed between the tenant and landlord regarding the use and maintenance of the rental property.
- Payment of the price agreed for the sub-let in the same timeframe and by the same method as the tenant. Any payments made otherwise do not count.
In theory, the sub-letter may in turn give the sub-let to someone else in the same way as if he were the tenant since Spanish law does not exclude this possibility.
Ending or suspending the rental contract
At the end of the contract, whether it’s the tenant’s wish because the contract has come to an end or he does not want to renew it, it’s advisable to notify the other party in writing in order to prove compliance with the timescale established in each case.
How can the tenant end the contract?
The tenant’s right to end the contract is subject to different conditions that depend on the length of the contract agreed by the parties or in any of its legal extensions.
In any case, it’s the tenant’s choice and does not need justification whatever the motive.
How can the tenant end the contract within its agreed length?
During the contractual length agreed by both parties, independently of how long it is, once the first 6 months of the rental are over, the tenant may leave the property without justifying the reason. His only obligation is to notify the landlord at least 30 days in advance of leaving.
The landlord may not limit in the contract the tenant’s right to end the rental contract after the first 6 months. This right is set in law and applied on a mandatory basis even if the contract says otherwise.
However, agreements reducing the obligatory 6 months are perfectly valid, either allowing the tenant to leave before the first 6 months or leaving it out of the contract completely, thereby permitting the tenant to leave at any time.
The law does not establish how the tenant should notify the landlord and it is understood that any means are valid including verbal notification. However, it is in the tenant’s interest to do it in a way that proves the landlord has received the notification and the date it was sent.
The fact that the landlord receives the notification and takes the keys for the rental property cannot be understood as tacit acceptance or consent to the ending of the contract. Nor that he is acting against his own interests by taking legal actions to claim any compensation due to agreements in the signed contract.
For rental contracts for periods over 5 years, the tenant may not end the contract for the first five years. After this period, he may, but must give the landlord at least 2 months’ notice and possible compensation equalling the legal requirement – one month’s rent for every year of the contract yet to be fulfilled.
Is there an obligatory way of notifying the tenant’s wish to end the rental?
In principle, there is no required form for the notification and Spanish law does not even require it to be in writing. It is a reciprocal notification and the landlord must receive it in order for it to be effective, which implies that the landlord must be receptive to receiving it and cannot refuse to accept a burofax notification, for example.
The timescale of 30 days is the minimum established by law, meaning that the tenant is free to give the landlord more notice if he has already decided not to continue with the contract.
Note that untimely notification has no legal effect.
Should the tenant compensate the landlord?
If the tenant leaves the property before the initial six months is over (the legal minimum to comply with the rental), the landlord may demand payment of the monthly rent until the six months have passed as compensation for ending the contract.
The landlord may demand one payment of the outstanding amount and there is no need for this to be stated in the contract.
However, if the property is let to another tenant within this period of six months, the landlord may not demand compensation as the law considers this to be unfair gain.
In addition, if the tenant leaves after the first six months, but before the contract comes to an end, the landlord may demand compensation for early termination of the contract clearly states this possibility. The maximum compensation is one month’s rent for every year left on the contract and reduced proportionally for periods of less than a year.
Compensation higher than the legally fixed amount is not possible and any clause in the contract stating otherwise is null and void.
Does the tenant have the right to leave in the obligatory legal extension?
During the periods of legal extension, compulsory for the landlord and optional for the tenant, that make up the compulsory minimum legal length, the tenant is not, in theory, obligated to stay for six months in order to leave. This is because he has already complied with this obligation in the initial contract and may now leave at any time.
For example, in a contract signed for one year, in its first legal extension (i.e., during the second year), the tenant is free to leave at any time without having to wait for 18 months to pass since signing the contract (6 months into the second yearly term).
Must the tenant pay compensation if he leaves during the periods of extension?
Regarding compensation for leaving before the contract ends and specifically stated in the contract:
- Some legal experts understand that it is no applicable during extensions because the initial contract period is over and the extension is a separate entity that does not form part of the first period.
- Others believe that if the contract allows for compensation, the landlord may demand it for the rest of the extension period. The start of the extension determines that the contract’s duration is for a further full year. As a result, compensation for leaving early would be appliable during this year because the contract states that compensation “is for every year of the contract yet to be completed”, making no distinctions between the initial period and the legal extension.
Once the extension of the contract is for a year, it should be understood that the landlord has the expectation that the tenant will stay for the entire year.
Therefore, if the tenant decides to leave early, the landlord is entitled to compensation if the initial contract allows for it.
Can the tenant leave early for marriage reasons?
There is a special case for ending the contract early if the tenant is married or living with a partner and that is when the couple separates and the person leaving the property is the one who appears in the contract as the tenant.
When the tenant expresses the wish not to renew the contract or end it early, the tenancy may continue with the other partner as long as the following requirements are fulfilled:
- That this wish to end the tenancy or not renew be taken without the consent of the non-tenant partner.
- That the beneficiary be living with the tenant in the rental property.
- That the non-tenant partner states his intention to continue with the tenancy within 15 days if the landlord requires it.
If the non-tenant partner expresses the wish to continue, he becomes the substitute tenant in the contract and the initial tenant disappears from it as a result.
If the partner does not reply within 15 days, the tenancy comes to an end and the person staying in the property must pay the corresponding rental amount until the end of the contract if it has not already been paid.
Notification is an option for the landlord to take or not when the original tenant notifies him/her of an early end to the contract or non-renewal. It’s understood that the landlord gives his tacit consent to the other partner taking over the contract and therefore may not end the contract for this reason.
If the tenant leaves the property without giving prior notice, the rental may continue for benefit of the remaining partner living there as long as the landlord receives notification in writing from the partner expressing his wish to be the tenant within one month of the original tenant leaving.
If the contract ends because of no notification, the partner must pay the corresponding rent for that month.
Both cases apply equally in favour of the person who was living permanently with the original tenant for at least two years beforehand unless they have children in common. In this case, there is no minimum requirement.
Can a rental come to an end if the property becomes uninhabitable?
When maintenance works or refurbishment in the rental property agreed by a competent party make it uninhabitable, the tenant may choose to:
- Suspend the contract, or
- End the contract with no compensation due.
The said works must take place in the home and this choice does not apply if the works are on accessories to the property.
The notion of rental property must be wide-ranging and as a result, it includes work in the building where the home is located or adjoining buildings. However, the home must become uninhabitable because of them.
Spanish law also assumes that the work must be for maintenance that could not be put off until the end of the contract.
The home must become uninhabitable as a result of the work, excluding the opposite case, i.e. that the home was inhabitable and maintenance work was taking place because of this. In this case, it would the responsibility of the landlord to comply with his maintenance obligations.
If the tenant decides to suspend the contract until work is complete, the clock stops on its time period as does the obligation to pay rent. This means that the time taken to complete the work does not count towards updates on rent or an end to the contract because of the original timescale.
However, its suspension has no effect on other events such as an end to the contract because of the sale of the property, transfer of the tenancy to the partner, first right to refusal and withdrawal, etc.
However, in order to suspend the contract and stop paying the rent completely, the property must be totally uninhabitable. When the tenant can still live in it, he can only request a reduction in rent.
Non-compliance with the contract
If either party does not comply with their contractual obligations, the other party complying with theirs has the right to:
- Demand compliance with the obligation, or
- End the contract.
However, if he chooses to demand compliance, the other party does not fulfil this, he may later request the contract be terminated.
Both cases allow for compensation for damages and payment of interest.
Note, however, that non-compliance with obligations may only lead to a termination of the contract if these obligations are essential, not an accessory.
As well as this general rule for bilateral contracts, the LAU Spanish rental law allows for a number of specific reasons to terminate the contract with the following caveats:
- The complying party may not demand enforcement.
- The termination has full legal rights.
- The claimant does not have to prove that he has complied with his obligations.
- The respondent cannot oppose non-compliance by the claimant.
As the next section explains, termination of the contract may be instigated by the landlord or the tenant.
When may the landlord terminate the contract?
The landlord has the full legal right to terminate the contract for the following reasons:
- Default of payment.
- Unauthorised sub-letting or transfer of tenancy.
- Unauthorised work in the property and willful damage.
- Disturbance or insalubrious, harmful, dangerous or illegal activities.
- Use of the property for other purposes.
Default of payment
The contract may be terminated by the landlord for failure to pay the rent, deposit, an updated rental rate or any amount that the tenant is obliged to pay because it’s included in the contract (higher rental rate for improvements, general expenses, utilities, taxes, etc.).
Unless rent payment is suspended because the property is uninhabitable, the tenant may not refuse to pay rent and other amounts if the landlord has met his obligations.
In order for the cause for terminating the contract to be valid, the landlord must not have impeded payment and must have collaborated by giving the tenant a receipt and going to the agreed place of payment or the rental property.
For contracts registered at the Property Registry in which both parties have agreed that default of payment is an immediate cause for termination of the contract and a return of the property to the landlord, the termination is fully legal with the following requirements:
- The landlord must send a court or notary injunction to the tenant at the property registered.
- The injunction must urge the tenant to pay or comply.
The tenant has 10 days in which to reply. If he fails to reply or answers by accepting the termination of the contract, it will take place.
To cancel the contract at the Property Registry, the landlord needs to present the original and a copy of the court or notary injunction. In addition, the tenant must have accepted the contract’s termination or have failed to answer the injunction.
If there are subsequent charges on the rental, in order to cancel them, the following is necessary:
- Proof that written notice was given to the appropriate parties at the domicile given in the Property Registry.
- Proof before a notary assignation in his favour of the deposit placed by the tenant.
Unauthorised sub-letting or transfer of tenancy
Both sub-letting and transfer of tenancy require written authorisation from the landlord. If this is not given, the landlord has the right to terminate the contract.
The landlord does not need direct proof of sub-letting or tenancy transfer since the mere presence in the property of a third party, unjustified or not included in the contract, is sufficient to assume that sub-letting or transfer of tenancy has taken place.
The contract can therefore be terminated. To revert this assumption, the tenant will have to justify the third party’s presence in the property with legal or contractual authorisation.
However, there are circumstances in which the presence of a third party in the rental property without express permission from the landlord does not imply sub-letting or transfer of the tenancy:
- When the third party are not included in the contract, but part of the tenant’s immediate family, under his authority or financially dependent on him/her, such as domestic staff or employees.
- When the third party is living there as a spouse or partner.
In these cases, showing proof of unauthorised sub-letting or transfer of tenancy is the landlord’s responsibility and analysed as per each case.
That said, it is not legal for the tenant’s relatives to remain in the property when the tenant has left permanently because, in this case, their presence is no longer protected by the contract.
Even though sub-letting and transfer of tenancy are different legal concepts, their precise identification is not necessary to terminate a rental contract because of a lack of authorisation from the landlord.
Since it’s difficult to know exactly which of the two is taking place, especially when the tenant could be doing all he can to hide it, the landlord may claim both causes for termination.
Unauthorised work in the property and willful damage
The landlord may legally terminate the contract when the tenant has willfully caused damage to the property or carried out work that the landlord has not authorised (in the cases where authorisation is necessary).
Classing damage as willful or caused by the tenant is something the courts have to decide on a case by case basis. In order for this cause for termination to be successful, the landlord must prove this type of damage has taken place and show that the tenant can be blamed for it.
Rental law does not expressly state the obligation to compensate for damage, but the landlord may demand it as per article 27 in the LAU.
Disturbance or insalubrious, harmful, dangerous or illegal activities
The landlord may terminate the contract when the tenant carries out in the property activities that can be considered insalubrious, harmful, dangerous, illegal or a disturbance.
In this respect, the following needs to be considered:
- Deciding whether an activity is annoying, disturbing, insalubrious or dangerous is the responsibility of the courts in each case. To terminate the contract, it is not necessary that such circumstances happen at the same time.
- These activities taking place inside the property must be obvious, i.e., there should be proof of their danger or disturbance. As a result, one or several specific instances, more or less disturbing or annoying, are not sufficient. They must be of a certain excess, be part of the same pattern and carried out with certain regularity.
- There must be a particular person to whom the disturbing, insalubrious or dangerous activity may harm, such as people who live or stay in the same building or other undetermined people.
- The disturbing and annoying activity just has to be unpleasant for anyone living or staying in the building. It does not have to be unbearable or unsufferable, but it must affect peaceful co-existence.
- The disturbing activity must cause alarm in those near the property and whoever alleges the alarm must prove it. Case law states that disturbance is anything that disrupts usual social relationships.
Use of the property for other purposes
The landlord may terminate the tenancy when the property is no longer for its prime purpose of providing the permanent need for a home for the tenant or if he does not live there and nor do his spouse or legal partner or dependent children.
Rental law does not establish how long it should be before it’s understood that a property is no longer inhabited and it’s the courts’ responsibility to determine this question.
The use of the property for activities with a different purpose may be cause for the termination of the contract only if the property is no longer the tenant’s primary and permanent home.
How may the tenant end the contract?
The tenant has the legal right to terminate the contract in the following cases:
- Disruption to use
For the landlord’s failure to carry out maintenance and upkeep of the property to be the cause of ending the contract, the following conditions must be met:
- It is very important.
- There is sufficient proof of defects in the property.
- These defects mean it is uninhabitable. Those that need repair but do not impede use of the property are not valid.
In addition, the rental contract may not be terminated for this cause if the tenant has not previously complied with his obligation to inform the landlord as soon as possible of the need for the repairs.
Disruption to use
The disruption of use carried out by the landlord allows the tenant’s the possibility of ending the contract. This derives from the landlord’s obligation to maintain pleasant living conditions for the tenant throughout the duration of the contract as well as from the good faith that forms an essential part of a contractual relationship.
Although rental law does not expressly establish the possibility of demanding that the landlord stops the disruption to use, the reference to article CC art.1124 allows the tenant to do so and furthermore, request compensation for damage caused.
The upheaval should be seen in the context of the tenant’s right to end the contract and the sale of the rental property. Furthermore, rules for the repair of hidden defects also apply to rental contracts.
Two examples of this include:
- Prohibition by a court of law to use the property because it does not fulfill the minimum legal habitation requirements.
- An end of the contract by a new owner.
A rental contract expires for several reasons including:
- The loss of the rental property not caused by the landlord.
- The declaration of ruin by the appropriate authorities.
- The landlord’s right to terminate the contract.
- The death of the landlord (unless the contract is transferred to those who have the right to it).
- The sale of the rental property when the rental contract is not registered in the Property Registry and the buyer does not take on the contract.
Loss of the property
Loss of the property as a cause of contract expiry refers to its objective loss or destruction, providing this is not the landlord’s fault.
It only extends to the home itself because this rule does not apply to the rest of the estate. The loss may be part or whole.
Regarding the loss of the property, the cause is not important. As a result, the following apply:
- Material or physical loss of the property caused instantly by a catastrophic event or as a result of significant deterioration, loss or damage.
- A legal loss that results from regulations or actions derived from them that prohibit or make it impossible to use the rental property for its purpose. For example, forced expropriation.
- Mere negligence by the landlord is only relevant to the effects of determining the possibility to demand compensation for damages.
However, if the cause of loss is directly the fault of the landlord, the tenant may terminate the contract because the landlord has failed to comply with his obligation of maintaining the property in an inhabitable state to its agreed use, beyond the expiry of the contract due to loss of the property.
The right to return
When planning regulations that do not imply expropriation means that it is necessary to demolish or completely refurbish the property but maintaining the building’s façade or structure, the tenants who live there have the right to demand that the landlord provides them with a new home. It must fulfil the following conditions:
- Be no less than 50% smaller than the previous property as long as it has at least 90m².
- Be not inferior to the previous property if it does not have at least 90m².
- Have similar characteristics.
- Be in the same area or within the vicinity of the demolished or refurbished building.
The tenant has this right regarding the date in the rental contract.
A property is considered to be a ruin when the cost of its reconstruction is higher than 50% of its value at the time of the damage or catastrophe unless the higher cost is covered by insurance.
The declaration of ruin must be agreed upon by the appropriate authorities according to planning law and must be definitive, i.e., not affected by any appeals.
As we said at the start of this comprehensive guide, its contents are no substitute for professional advice. If you’re a landlord or tenant and have a problem regarding the tenancy, your first step should always be to consult a legal expert.
In our experience, many issues with rental property in Spain are easily solved by negotiation as soon as the problem emerges. It’s therefore important to seek advice as soon as possible to avoid unnecessary expense and stress. You’ll also save yourself money.
Our team of lawyers are here to help so don’t hesitate to contact them for any queries regarding letting or renting a property in Spain. We look forward to hearing from you.