Reforms to the Rental Act

THE New Rental Act (Ley 4/2013) for the development of the rental property market in Spain: Landlord and Tenants’ rights and obligations. Practical information for consumers. How does the new law affect us?

This new reform of rental legislations aims to:
1. Increase the amount of rental properties.
2. Increase the amount of people interested in renting.
3. Adapt prices and rentals to make renting a property more appealing.

Basically, it encourages and promotes renting as an appealing option to meet people’s housing needs. However, the new rules will only apply to leases that are signed after the new law comes into effect. Any leases that were made before this new regulation will not be subject to change, unless both parties agree and sign according to the new legal provisions.

In what situations does the new rule apply?
1. Not included in the new law are short-term holiday rental properties. This means that temporary residential or commercial leases must follow the regulations of each different province.
2. It provides new possibilities for mediation and arbitration if disputes arise.
3. It provides the opportunity for both parties to use an agreed email address for notifications.
4. In terms of contract duration; the contract will be freely agreed by the parties, and if this period is under three years, on the day of expiry of the contract, it is mandatory for it to be extended in one-year periods until the lease reaches a minimum of three years.
5. Enforced extension of any contract can be denied on grounds of necessity, without the need of it being specified in the contract, after the first   year of the contract and with a two-month notice period.
6. Withdrawal from the contract: the tenant may cancel the contract after a period of six months, giving the landlord at least 30 days’ notice in advance, and without compensation.
7. Changes can be made in the amount to be charged for the rental.
8. It is highly recommended that the tenant registers the lease in the ‘Registro de la Propiedad’, which will guarantee the duration agreed upon in the contract, from a legal standpoint.
9. This registration of the property at the ‘Registro de la Propiedad’ can be cancelled easily, when a contract is settled extrajudicially. It is highly recommended that the landlord includes in the       contract “termination of contract due to non-payment and immediate return of the property to the landlord”.

To conclude, the rental market in Spain has been residual in respect to the buying market, and what this reform aims to do is increase the amount of rentals and encourage lower prices.
We recommend that any rental contract should be drawn up or reviewed by a lawyer.

This article is for information purposes only and we recommend a proper legal consultation on your rights and legal requirements as a landlord or tenant.