Property News

WATCH THAT LEASE!

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Spain´s recent changes to the rental law have created some important changes mainly for landlords, especially in regard to long-term leases.

Most landlords wrongly assume that when the mandatory five years are up, the lease agreement is automatically terminated.

If nothing is done, an automatic extension to long-term leases now operates by law(known as “silent renewal”), the idea being to protect the rights of tenants still further.

For all long-term rental contracts signed on or after the 6th of March 2019, if the landlord is a physical person, the silent renewal adds an extra three years to the lease, making a long-term tenancy’s total duration of eight years.
For example, if contract involves a private landlord and was signed last month on March 10th, if by 2024 the landlord takes no action, the contract will be automatically extended for a further three years until March 10th, 2027.
To avoid a legal extension, a solicitor needs to draft a formal notice of termination and and serve it to your tenant by recorded delivery within a specified time limit.
This must be done giving a two month notice period if the landlord is a physical person.
If you are trying to sell a property that has got tenants in it, then you need to take careful note of the law change.
Under the new legislation, any buyer acquiring a property needs to respect the whole duration of a pre-existing lease agreement until it ends.
This means a buyer may have to wait several years before they are able to attain vacant possession. Needless to say, most buyers just pull out of any deal.
For this reason alone, private landlords are recommended to get legal advice before signing any lease agreement, of which there are many and some will lock you into a long and binding contract if you are not careful.

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