Changes to the Spanish Rental Law, December 2018

Changes to the rental law (Ley de Arrendamientos Urbanos) in Spain in December 2018 help towards making rentals more stable for the tenant. The main changes are as follows.

The term for a standard long term rental contract has increased from three years to five years. This is the obligatory period for the landlord, and rent cannot be increased during that term (during a rental contract the rent can only increase in line with inflation, those figures are taken from the IPC (Indice Nacional General de Precios al Consumo)). After 12 months, the tenant can give notice to leave the property without penalty. A tenant can leave after six months, but there is usually a clause stating there is a penalty to do so.

On the renewal date of a rental contract, if neither party gives notice, the contract will automatically renew for three years. Previously this renewal term was one year.

The deposit amount when renting has always been the equivalent of one month’s rent. However, additional guarantees are usually asked for and historically these have been anything from one month up to six months. Additional guarantees are now limited to the equivalent of two months’ rent. They also have to be money deposits and not bank guarantees.

There are different new rules concerning properties that are owned by a legal entity, such as a company. In those cases, the rental term has to be seven years. The renewal if neither party gives notice is also three years.

A huge help to tenants is that where owners are a legal entity, those owners have to pay the agency fee rather than the tenant having to do so. This makes much more sense and I wish this rule applied to all rentals.

ITP (Impuesto sobre Transmisiones Patrimoniales) – a tax tenants were meant to pay on signing every new rental contract has been made exempt. In reality, most tenants didn’t know they had to pay it, and in many cases it went unpaid.

There are other changes to the law, mainly to help support people in assisted housing and those people under threat of eviction.

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