Property for rent in Spain
Landlords and tenants are free to negotiate a lease. Typically, rental fees are paid monthly until the seventh of each month. The landlord has no right to demand payment more than a month in advance.
Contracting parties may renew the lease on an annual basis during the first five years of the contract only in accordance with fluctuations in the Consumer Price Index (Indice de Precios al Consumo, IPC). In addition, the landlord must notify the tenant in writing of his intention to increase the rent. After the expiration of this agreement, the contract can be updated, but the cost of a new annuity should not be higher than the previous by more than 20%. If the landlord improves housing conditions, he has the right to increase the annual rent for rent on the basis of the statutory interest rate increased by three units, applicable to the entire investment and minus all government benefits. But the rent should not be increased by more than 20% of the rent.
The landlord has the right to demand a security deposit (fi anza) only one month in advance. For at least a five-year lease term, the lessor is not entitled to increase the amount of the security deposit. The security deposit must be kept by the intermediary and be inaccessible to both the lessor and the lessee until both parties reach a final agreement. The security deposit may be (for example) in the local public housing authority (Consejeria de la Vivienda). If the landlord does not return the security deposit to the tenant on time, he will be obligated to pay the interest rate established by law.
Landlords and tenants can enter into a contract for any period, but this is contrary to the tenant’s right to renew for five years each long-term contract (Contrata de Vivienda), that is, a contract concluded for a period of more than one year. This mandatory five-year “delay” of the lease will not be valid if the lessor explicitly stipulates in the contract that he is going to get the house back for his personal use after the expiration of the period set by the contract.
The tenant has the right to terminate the contract before the end of the five-year period, having notified about it at least thirty days before the expiration of the contract. If neither the lessor nor the tenant provides notice of their intention to terminate the contract one month before the expiration of the contract, the contract is updated on the terms of the annual agreement, extending the validity period by a maximum of three years. The tenant may terminate the contract by notifying one month before the end of any one-year period of validity of this contract.
If the lessor and the lessee from the very beginning draw up a contract for a period of more than five years, the lessee has the right not to renew this contract, having notified about it two months in advance, but only after at least five years have passed. Short-term contracts (Contrata por temporada) are drawn up for vacation rental, but can last for a whole year.
Vacation rental agreements, called arrienda de temporada, are not covered by the Urban Rental Act. Such contracts do not give automatic renewal rights, and the tenant is required to vacate the premises as soon as the contract expires.
The landlord can evict the tenant and return his property in several cases, including the following: if the tenant is unable to pay rent (although the court usually orders in such a way that any measures against these tenants can be applied only if their debts exceed the payment for six months); if property is damaged; if the property is used for immoral (illegal) purposes; if it is rented out without the permission of the owner; if the tenant’s accommodation causes serious inconvenience to the neighbors. In any of these cases, the tenant must be given a court order, and only after many months after this the tenant can be evicted.
Recent changes to the Spanish Landlord and Tenant Law The Ley de Arrendamientos Urbanos Act, which entered into force on January 1, 1995, repealed the old law of 1964 on the forced extension of a contract, in which tenants could extend the contract indefinitely. The new law allows landlords to gradually increase previously established controlled and ridiculously low rental prices in accordance with real market prices and ultimately regain their property. This law also, in comparison with the old one, provides greater protection for the rights of tenants and obliges lessors to update lease contacts every year for up to five years.