10 Doubts about renting

On the website of the Ministry of Transport, Mobility and Urban Agenda, within the rental section, you will find the main questions and answers about a rental contract for a home.
It is worth echoing this excellent information:

1. How long are the rental contracts?

The duration will be the one freely agreed upon by the owner and tenant. However, for contracts signed as of March 6, 2019, if the agreed term is less than five years – when the lessor is a natural person – or seven – if it is a legal entity – the contract will be automatically extended until reaching those 5 or 7 years, for annual installments. With the previous law, this period was only up to 3 years.

However, the extension will not occur if the lessee (tenant) notifies the landlord (owner) at least 30 days prior to the end of the agreed term or any of its annual extensions of his intention not to renew. Article 9 LAU

After those first five years (7 if the landlord is a legal entity), if none of the parties had notified their willingness not to renew it, the contract will be extended for annual terms up to a maximum of three more years (tacit extension Art. 10 LAU) . Under the previous law, this tacit extension was only 1 year.

2. How much notice do both parties have to give if they do not want to renew the contract?

The new regulations establish that, after the first five years of the contract (7 if the landlord is a legal entity), the landlord-owner must communicate at least four months in advance his desire not to renew it. For his part, the tenant must communicate it at least two months in advance.

Otherwise, the contract will be mandatorily extended for annual terms up to a maximum of three more years. During these three years, the tenant may communicate his will not to renew one month in advance of the termination date of any of the annuities. Article 10 LAU

3. Can I stay in the apartment for 5 years without renewing the lease?

Yes, the minimum rental period is precisely five years, if the landlord is a natural person (and seven if he is a legal entity), as long as the tenant wishes to continue in the home.

In addition, once this period of minimum duration has expired, the tacit extension is three years. Therefore, I can stay in the apartment for five years without renewing the rental contract. Article 9 and 10 LAU

4. If my landlord wants to recover the house before the end of the contract, can he do it?

No, with certain exceptions.

The owner, when he is a natural person, may recover the home one year after the contract was signed, only if he needs it for himself or for a first-degree relative (parents, children and spouse), notifying with two months in advance. In addition, this possibility must be expressly provided for in the contract. This is one of the novelties of the new regulations approved in 2019.

In the event that the landlord or his family members have not occupied the home within a period of three months, unless it was due to force majeure, the tenant would have the right to be replaced in the lease and/or receive compensation determined according to what is legally provided. Art. 9.3 LAU

5. How much can my rent go up each year?

The rent is not subject to annual updating unless expressly agreed between the parties. However, the usual thing is that said update clause is included in the contracts.

In this case, since the approval of Royal Decree-Law 7/2019, said update will be limited to the CPI variation for that period. Art. 18.1 LAU.

When agreeing to update, the following should be taken into account:

When does it apply? The rent can only be updated by the lessor or by the lessee, in the terms agreed by the parties, on the date that each year of the contract expires.

How do I calculate the upgrade? The parties may agree on the methodology to update the rent. If they do not do so, the rent will be updated for each year according to the annual variation of the Competitiveness Guarantee Index on the date of each update. To calculate this variation, the month of the last published index will be taken as the reference month. In any case, whether applying this index or the one agreed by the parties, this variation may never exceed the variation of the CPI.

You can calculate this CPI limit at the following link: https://www.ine.es/calcula/

6. How does the new regulation affect evictions?

Royal Decree-Law 7/2019 has established a protocol for action by the administration that gives greater protection to vulnerable individuals and families in a situation of eviction, and greater clarity and legal certainty to the procedure.

Systematic notification is established
ca of the eviction procedures to the competent social services. In this way, social services can analyze each case and provide housing solutions or alternatives to the launch. Art. 441.5 LEC

In addition, with the new regulations, all those rental processes whose total amount claimed does not exceed €6,000 are processed by verbal trial -where the defense exercise is cheaper than in ordinary trials- and evictions with an open date are put to an end . Article 249 LEC

7. How many months of deposit can I be required to sign the contract?

Upon signing the housing rental contract, the landlord or landlord will require a monthly rent, as a deposit, and the establishment of additional guarantees equivalent to a maximum of two monthly payments, whether deposits or any other type of guarantee (guarantees, non-payment insurance, etc.). With the previous regulations there was no amount limit. Article 36.5 LAU

8. What is rental insurance and who pays?

They are products designed so that owners and lessors are covered in the event of non-payment. They also usually include legal advice and/or coverage against damage from vandalism and/or theft. They can be paid by both the owner and the tenant. However, it must be remembered that the new regulations limit the cost of the additional guarantees that can be added to the month of deposit to two monthly payments, so in the event that the insurance is borne by the tenant, its cost may not exceed those two months. monthly payments. Article 36.5 LAU

9. Can I require a bank guarantee to access the rental?

The bank guarantee is a commitment to pay that the tenant’s financial institution acquires in the event that the tenant does not pay the agreed monthly payment. It was a common additional condition in some stressed markets… to date. Now, the bank guarantee may not imply in any case for the tenant more than two monthly rent payments (that is, the maximum limit of additional guarantees that can be added to the month of deposit). Article 36.5 LAU

10. What can neighborhood communities do about the phenomenon of tourist housing?

The Royal Decree-Law on urgent measures in the area of housing and rent increases the control capacity of the community of neighbors over the exploitation of a property as tourist housing. With the new regulation, it is enough that three-fifths of the owners of a neighborhood community oppose a home being used for tourist rental purposes to prevent it, through a community agreement. Previously, a unanimous opposition was required. In addition, the neighborhood communities may charge the apartment or flat that is intended for tourist use up to 20 percent more than the annual expenses of the community that corresponds to it as the owner of the flat. Art. 17.12 LPH

These community agreements will in no case have a retroactive effect, that is, they would not apply to those homes that were already developing the activity with all their administrative authorizations and applicable legal requirements.

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