The new law of “Promoting the Housing Rental Market” in Spain, which the Spanish government has given the green light to on Friday 24th August, includes a series of legislative changes designed to ease the fears of many owners who rent their properties.
The changes (a date as yet unknown by when the new legislation will take effect) remove many of the rights that previously guaranteed the protection of the tenants against landlords, which naturally has raised many questions among those owners who rely on renting for a living.
(Please note that the following Q&A’s refer to the general laws of renting in Spain. This article does not cover the circumstances surrounding “temporary” contracts found in many coastal regions of Spain, more popularly known as 11 month contracts. We will publish soon a separate article on this matter.)
- What if I can’t pay the rent? If your contract does not require you to pay any compensation, you can leave the property with one month’s notice (until now it was two). According to the Minister Ana Pastor, these are some of the benefits of this new measure: it allows you to leave the house in case you are no longer able to pay. If you still do not pay the monthly rent, things will remain as per the last legal reform approved in October 2011: your landlord may go immediately to a court where the judge will give you a period of ten days to pay, leave the property or submit a claim in your defence. The main change in the new law is that by paying the outstanding rent, this will no longer be sufficient to stall the proceedings. Furthermore, the aim is to reduce the bureaucracy involved in the legal proceedings so that the eviction can take place in a shorter time . So, instead of a decree issued by a clerk of the court, the judge’s decision is now final and takes immediate effect. Furthermore, in order to execute the eviction (on the premises) only one judicial officer need be present, instead of two that were needed so far.
- I have a lease for three years ending in December. I want to continue living in the property. Will the changes in the law affect me? (Note that this question relates to rental contracts that are not governed by the “temporary” clause that appears in many contracts in tourist areas, i.e. 11 month contracts). So far, all contracts for less than five years were automatically extended each year up to a maximum of five years (the so-called “forced” extension by Spanish law) if the tenant had not communicated to the landlord his intention to leave. After those five years, if neither the landlord nor the tenant had indicated their willingness to terminate the contract, this was again extended annually (the so-called “tacit” or automatic extension) to a maximum of three years. Under the new law, the forced extension is reduced from five to three years, whilst the tacit extension is reduced from three to one. So, if your agreement ends in December and the law is passed by then, your landlord may indicate his desire to terminate the contract. Your landlord may also revise the value of your deposit.
- I’ve been living two years in an apartment. My landlord lives abroad, but his daughter will start college in my town next year. Can my landlord kick me out of the property? Yes. So far, the landlord’s right to recover the property for personal use should be expressly stated in the contract. If it was not, the landlord must wait for the “forced” extension period (five years) before asking you to leave. The new law will allow the landlord to evict the tenant at any time for personal use or for use by an immediate member of his family, such as a son or daughter, with two months’ notice.
- My landlord wants to sell the property. Will the new law force the new owner to honour the contract? Only if the rental contract is registered in the Land Registry. So far, in general, the new owner must honour the contract to meet the extended “forced” deadline (five years). Under the new law, if the contract was not registered in the Land Register, the new owner is entitled to recover the property immediately. The registration of rental contracts in the Land Registry has been, until now, a cumbersome and expensive process involving a notarized deed. The ministry has already announced its intention to cheapen and ease the procedure.
- I want to reform the kitchen of my rented property. Can I ask the owner to lower my monthly rent? In principle, yes. The Government has announced that the new law will allow improvements made by the tenant to apply to and form part of the rent.
- I am going to rent a property. To what extent will the changes in the law affect me? The government wants to provide more freedom between the landlord and tenant to sign a contract in the most mutual and beneficial manner to both parties. So far, the annual review of the rent was indexed to the official annual rate of inflation. Under the new law, the landlord and tenant may agree other review mechanisms. Furthermore, so far, if the landlord put his property up for sale, the tenant had a first right of refusal at the price that the landlord offered his property to a third party. The new law will allow the tenant to waive that right, “and negotiate a lower rent” according to the minister.
28th August: It would appear that the above proposal will take some time to legislate through the Spanish parliament where final changes could still be made and could therefore take some months before becoming law.