Law and slow courts benefit tenants in buy-to-let properties
Buy-to-let Landlords and tenants can write any contract duration into the contract, but this is overridden by the tenant´s right to annually extend for five years any ´long-term´ contract
But-to-let rents are freely negotiable between landlord and tenant, with the rent due within the first seven days of each month. The landlord cannot ask for more than one month payment in advance.
Agreed rent increases are on a yearly basis during the first five years of the contract and only according to the variations of the Consumer Price Index (Indice de Precios al Consumo, IPC). In addition, the landlord should notify the intention to increase the rent with a written notification. Once agreed at no more than 20% of current rent, the contract can be renewed at a new rent
If improvements are made the landlord is entitled to increase the annual rent on the basis of the legal interest rate, incremented by three points, applied to the total investment, less any public subsidies. But the rent increase cannot exceed 20% of the rent.
The landlord has the right to only one month´s rent as deposit. This cannot be increased during the 5 years. The deposit should be held by an agency independent of both landlord and tenant, which will not release the deposit until both parties agree.
What rights do landlords and tenants have in Spain, especially as to duration of contract, and eviction?
This five years obligatory lease will not be valid if the landlord expressly states in the contract his will to recover the dwelling for personal residence at a given date.
The tenant is entitled to put an end to the contract before the five years period, by giving notice at least thirty days prior to the termination of the contract.
If neither the party serves a notice to terminate the contract one month before it ends, the contract is renewed by yearly terms up to a maximum of three years.
The tenant can give 1 months’ notice before the end of any of these annual contracts. If the landlord and tenant initially agree for a contract lasting more than five years, the tenant has the right to discontinue the agreement, by giving notice two months in advance after a minimum five years.
Short term contracts are designed for holiday rentals, but can last as long as one year. Holiday rental contracts do not give tenants any rights to extensions and tenant must vacate when the contract ends.
A landlord can evict a tent and regain his property on several grounds, including
- failure to pay the rent (but courts have often ruled that these arrears must exceed six months before any action can be taken)
- damage to the property
- use of the property for immoral purposes
- subletting without permission from the owner
- Causing a serious nuisance to the neighbours. In any of these cases, a court order must be obtained against the tenant and many months could pass before he is evicted