New Property Law regarding rentals

Last month, on the   1st  March 2019, a new Law took place that affects properties, especially when renting.

This is classed as an urgent measure due to a deficient property market, especially in the rental sector.

One of the main benefits, that hasn’t changed from the previous Law, is that valid contracts that aren’t registered in the Property Registry (Registro de la Propiedad), are still protected in respect of third parties. This means that, if there is a sale on a rented property the tenant is always protected.

The amount of time needed to communicate your intentions of not renewing the contract has also changed. If you are the tenant, you need to give 2 months notice. If you are the lessor, you need to give 4 months notice.

Both parties can also agree on building work being done on the property whilst the contract is in place, making it possible for there to be an increase in the monthly rent for the rest of the period that the contract is in place for, if there is an agreement reached by both parties.

Additionally, to furthermore help vulnerable groups; if the tenant should pass away during the term of the contract, there is a possibility of subrogation in favour of minors, disabled people and/or elderly (over 65).

Another important change is in the “Ley de Propiedad Horizontal”, which states that in an apartment block the community can vote to limit the activity of holiday rentals. They need a majority of 3/5, to be able to limit the activity of holiday rentals, establish some special conditions or increase their community charge. The community charge can be increased up to 20% in any apartment that is for holiday rentals. The objective is to give the neighbours tools to improve their coexistence and to be able to decide on the activities that take place in their community. The “Ley de Arrendamientos Urbanos” changed in order to comply with the previous Law, including all properties for tourist use by the tourism sector regulations, regardless of the form of marketing or promotion, including holiday rentals.

The proposal to change these two state Laws, the Ley de Propiedad Horizontal and the Ley de Arrendamientos Urbanos (or “LAU”) was debated in September 2018 during the “Grupo de Trabajo de Viviendas de Uso Turístico” meeting, where 17 provinces and the FEMP (Spanish Federation of towns and provinces) participated, as well as nearly two dozen representatives of the hotel and business sector, consumers and syndicates.

Below is a link to the original law, in Spanish:

https://www.boe.es/boe/dias/2019/03/05/pdfs/BOE-A-2019-3108.pdf

In conclusion, this Law will try and make a social turn to the property politics. Its objective is to offer more security , to increase the number of rental properties and to help the most vulnerable groups, relieving financial stress in families.

To make sure you are protected, either if you are a tenant or a lessor, it is best to have a rental contract in place, that is in accordance to the new property law, as well as all the other Spanish legal jurisprudence.

At LACS, we are a qualified property consultant, that can help you with your rental contract, and to make sure the process is free from stress.