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What you need to know about Spain's new rental laws

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What you need to know about Spain's new rental laws
Photo: Jocelyn Erskine-Kellie/Flickr
13:55 CET+01:00
This is essential reading for anyone letting out or renting a property in Spain from March 2019.

Spain has just brought in a new government decree regulating rentals across the country that offer improved protection for tenants.

The new law was entered into Spain’s State Bulletin on Wednesday after being approved by the cabinet of Pedro Sanchez’s socialist government last week.

The new measures, which come into effect from March 6th, will only apply to new lease agreements and not those that have been signed before that date.

The new set of rental changes which give homeowners greater veto powers against holiday home rentals within their building and offer extra security for tenants by extending the length of their contracts and capping rent hikes.

FIND OUT: Why rising rents across Spain are causing a new crisis

These are the key elements of the new decree.

Longer leases

Average tenancy contracts will go from being three to five years long, or seven years in cases where the landlord is a legal entity – a company rather than an individual landlord. It’s a measure meant to give greater security to the tenant, but the measure, as is the case with all others, isn’t retroactive.

In cases where the rental agreement expires and neither the landlord nor the tenant make their intentions vis-à-vis the property known, the implicit renewal of the tenancy agreement (known as plazo de prórroga tácita in Spanish) will now be of three years rather than one.

Longer terms of notice

After the mandatory renewal period outlined above, landlords are legally obliged to provide four months’ notice to end the contract – up from a previous two months.

Meanwhile tenants must now give two months’ notice instead of one.


Photo: photography33/Depositphotos

Limited rent hikes

The new decree determines that the rent is not to be increased above the consumer price index (CPI) – a measure of inflation – bringing an end to contracts that have annual rent rises written in. 

Price benchmark system

The decree outlines a new state benchmark index for rental prices so that renters can see whether the asking price of any given property is realistic for the area.

The index, which will be created by December 2019, will provide average prices of rentals across Spain based on supply and demand and will serve as a useful tool to determine whether a rental property is good value.


Photo: AFP

Maximum two-month’s deposit

Landlords will be able to ask their tenants one month rent as a deposit, and any additional guarantee will be limited to the equivalent of two months rent, unless the tenancy contract is longer than the now five-years standard length.

Landlords who are legal entities or companies will now also have to cover all agency and contract costs by law (gastos de gestión inmobiliaria y de formalización del contrato).

According to the decree it will now also be easier for the landlord and tenant to reach an agreement to revamp or improve the dwelling before the end of the tenancy contract. 

READ ALSO: Five things nobody tells you about renting a property in Spain

Added protection for tenants

Those who have contracts that have not been officially registered with the Property Registry will be afforded the same legal protection as those that have, according to the decree.  This means that even if the house is sold with a sitting tenant, that lease agreement must be respected.

Evictions

In a nation where evictions have become so rife, the new law finally attempts to limit the damage.

All eviction requests must first be evaluated by social services to determine whether the tenant is considered in a “vulnerable situation”. If deemed to be so, then the tenant will be given a grace period of one month -  or three months if the landlord is a commercial enterprise – in order to find new accommodation.

It also states that the date and time of the eviction must be communicated to the tenant via a judge, effectively bringing an end to the surprise evictions that have become so notorious in Spain.

READ MORE: Meet Madrid's anti-eviction warriors

Protection against holiday rentals

This change  in the law will allow property owners as a collective to decide whether or not to allow short-term holiday rentals in their buildings by calling a vote.

For homestay portals such as Airbnb to be able to operate in any given building, three quarters of the owners that make up a homeowners’/residents’ association will have to approve their entry.

The same ratio will be needed to increase any levees meant to cater for short-term holiday rentals in their building. The measure is again not retroactive so can’t apply to any properties currently being rented out for short stays.

RENTING PROPERTY IN SPAIN - Know your rights as a tenant

Photo: photography33/Depositphotos

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