Known in Spanish as the Ley de Arrendamiento Urbano (LAU 29/1994)* this law forms the basis of the rules that regulate landlord and tenants in Spain.
In Spain the leasing of a property for residential purposes is distinguished from other types of leases – such as commercial businesses, for example. A lease is said to be for residential purposes when it is satisfying the need for a permanent home for the tenant in a habitable property.
A residential letting having been determined, the LAU applies to the primary building as well as any other land or structures connected to the property.
* LAU 29/1994 has been amended in a number of important respects – please see our blog post Tenancy Laws in Spain Overhauled to Boost Rental Market
Minimum Duration of Leases
The duration of a residential lease may be freely agreed between the landlord and tenant, though, if it is for less than five years, the lease becomes renewable on a yearly basis. This is obligatory and may not be avoided unless agreed to by the tenant.
That said, if the contract contains an express provision to the effect that the property will be required for the landlord’s own habitual residence within the five year period, a contract may be made for less than five years.
Note should be taken, that failure on the part of the landlord to occupy the property may result in damages arising in favour of the tenant.
At the end of the five year period, if neither of the parties informs the other of an intention to not renew the lease, the lease becomes automatically renewable on a yearly basis for a further period of three years unless the tenant gives one months notice of an intention to quit.
Upon signing the contract there is a legal obligation on the tenant to provide a deposit of one month’s rent. The deposit will stay in the possession of the landlord until the lease period has ended.
At the end of the lease, the landlord has one month to return the deposit. If it is necessary to use part of the deposit to return the property to its condition prior to the leasing, the balance should be repaid within one month following the termination of the lease.
The deposit may not be used instead of the final month’s rent. It should be noted that the tenant in Spain is liable for any wear and tear through normal usage of the property, unless otherwise agreed.
So, any repairs that need to be carried out are paid for with the deposit, and any left over is returned to the tenant.
The only legally recognized deposit is to the value of one-months rent.
Rent and Rent Reviews
The rent may be freely agreed between the parties and is payable monthly unless otherwise agreed. The landlord may only change the rent once a year on the anniversary of the signing of the contract and it must be amended as per the prevailing inflation rate (IPC in Spain).
After the end of the five year period the rent may be freely agreed once again or, if there is no communication between the parties on this issue, the rent continues as before.
From the fifth year, the rent may be increased by an amount equal to the legal interest plus 3% on any investment made to improve the property, with a maximum increase in the rent of 20% being the limit.
Recent Advocate Abroad property lawyer reviews as added by clients directly to the Wufoo client survey platform:
- Peter & Anita Bradshaw, Leeds, EnglandMonday, June 18, 2018We could not be more happy with the service we received from Jaime.
He responded immediately to our enquiry and it was clear from the outset that he fully understood our position. It was vital tha...t Jaime acted quickly in this matter and he did so in a highly professional and competent manner, providing us with clear and concise updates throughout.
We found Jaime to be very polite and approachable and we believe his fees to be very reasonable. We would genuinely not hesitate to recommend his services.
Before contacting Jaime, our previous experiences of Spanish Lawyers had been appalling - in fact we needed Jaime's help to resolve issues which previous Lawyers had created. Our only regret is not finding Jaime sooner!
Thanks so much for all your help Jaime.
- Tracey and Mike Iliffe Bradley, Colchester, United KingdomTuesday, May 29, 2018From our very first contact through to the end of our purchase, Rosa surpassed all expectations.
She was helpful, efficient, always quick to return our communications and a pleasure to deal with. ...We have already recommended her services to a friend.
- Rl, AlicanteThursday, May 24, 2018Felt very comfortable at all times. Nothing was too much. Understood everything mentioned in our meeting. Very reasonable rate, money wise.
- Cian O'Grady, IrelandTuesday, May 15, 2018We bought a property in spain and Lidia assisted us through the buying process.
She was very professional and reassured us throughout the process.Her english was very good and we felt that we got ...good value for our money.
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Pedro had to evict my squatter tenants, and then organised an estate agent to sell my apt. This agent un...dertook renovating the apt, and got me a good price.
Pedro and his brilliant co-worker Ana finalised the sale and I received the money into my account, without me ever setting a foot in Spain.(Power of attorney).
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- George Salib, LondonMonday, April 23, 2018Jose Antonio was very professional and has assisted me in every step of the purchase of my flat in Alicante.
He also assisted me by advising of the most suitable area according to my needs. His com...mitment and dedication is excellent.
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Lidia was the best legal representative i have employed and i will always use her where Spanish legal affairs are concerned.
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Esther speaks both Spanish and English, and is very friendly, professional and genuine. ...She took care of the whole purchasing process and explained all the steps for us, including giving advice on Spanish bank account, NIE numbers etc.
We are very pleased with all the help we have received and can highly recommend Esther. Thank you so much!
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- M Pearce, MarbellaMonday, March 05, 2018Miguel was extremely helpful, he couldn't have done more:
Always kept us updated on the progress of our purchase
Always responded to emails in a professional and timely manner
Always explained to... our understanding all aspects of the legalities about the purchase
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So much better to deal with than UK property lawyers!
- Andrew Bullen, UKFriday, February 16, 2018Rosa was very professional at all times when dealing with me. Her English was second to none and she always kept me informed of progress via email promptly.
I wouldn't hesitate to use Rosa in the ...future for any legal issues I have.
- Tamara Reeves, AustraliaThursday, February 15, 2018Anna was very knowledgeable and had prior experience dealing with English clients. She spent a lot of time explaining information and I was never rushed.
I have continued to use Anna since my firs...t meeting as I trust her judgement and know that she will look after my best interests.
- Lisa Jones, UKThursday, January 25, 2018Kristina was extremely helpful throughout the process of buying my property in Spain. She was very easy to reach at all times and very professional. I would highly recommend Kristina to anyone buying ...a property in the area.
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He is helpful and approachable and has always answered all my questions very thoroughly. He’...s very polite and an absolute pleasure to deal with.
I hope he never retires!
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All my family found Olga very approachable, professional and we were grateful to have someone who could explain and guide us through a process that is foreign to us.
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She is available to meet with us on short notice, is attentive to our needs, answers each of our questions fully and provides appr...opriate legal solutions.
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- Delphine Harrison, EnglandThursday, December 21, 2017Jose was excellent from my initial contact to the exchange of the contracts, always responding quickly to my emails even out of work hours, very professional and understanding.
Jose made the whole... experience stress free and quite enjoyable, I would highly recommend him for anybody needing legal advise or business abroad.
- Tim Burley, MallorcaFriday, December 15, 2017A very strange phenomenon with lawyers in Spain - she was working for me rather than just trying to line her own pockets!
- Theo Kleynhans, Castellón de la PlanaTuesday, December 05, 2017I always felt safe with Lidia. She knows what she is doing and was extremely professional and helpful.
I think she was priced perfectly and I believe that she always understood me. I will recommen...d her with ease. She will remain my spanish Lawyer.
- YB & CB, ScotlandThursday, November 30, 2017Our lawyer Rossana has really looked after our interests in the most comprehensive way possible.
As novice property purchasers in a foreign land, she has done everything (including things we could... not imagine as necessary due to our ignorance of local laws, customs & practices) to keep us free from unforseen trouble!
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- Nigel Griffiths, UKWednesday, November 29, 2017My situation was complicated because the correct documentation was not done at the time of sale....
Rosa contacted the purchaser and arranged to receive all the information required to submit to th...e Spanish authorities.
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Rights and Obligations
The landlord and tenant both have a number of reciprocal rights and obligations:
- The right of first refusal on the sale of the home
- If the home is repossessed or otherwise affected by a court order the tenant retains the right to remain in the property for a period up to five years from the signing of the lease
- If the home is sole, the new owner must respect the existence of the tenancy
- If the tenants are spouses who divorce, any spouse who did not sign the lease may nonetheless continue to live in the property even though the spouse who signed is no longer living there
- The tenant may not make modifications to the property without the consent of the landlord though a disabled tenant may make the necessary refurbishments to make the property adequate for their needs
- The tenant must advise the landlord of the need to carry-out any repairs and permit any necessary refurbishment by the landlord
- Wear and tear shall be the responsibility of the tenant and the tenant shall have responsibility for minor repairs
- The landlord has at all times an obligation to maintain the property in a habitable condition, unless the deterioration is the fault of the tenant
- If any refurbishment carried out by the landlord lasts more than 20 days, the tenant is entitled to a reduction in the rent equal to the proportion of the property that is effectively denied to the tenant while the refurbishments are carried-out.
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