Rental contract

Please can you help me? I signed a 11 month rental contract in August 2008 on a Spanish property, which was renewed for 16 months until 15th October 2010 in July 2009 and signed by myself, and the wife of the owners (not both of them).

I thought this was a fixed contract until October, but they want to put it for sale and have viewings and have said if I don´t allow it, they will give me 2 month´s notice now. If I do allow it, they will give me 2 month´s notice when they get a buyer. It is very inconvenient for me to move out before the Autumn as planned and I don´t want to allow strangers in the house with my furniture and valuables (not theirs - it was unfurnished).

I have been told that as I have been there over 12 months and always paid the rent on time and signed the contract according to the Tenancy Law 1994, they cannot do this and I could stay for up to 5 years?? (but I wouldn´t do that)

Can I say that I insist on staying until October and the end of the contract and do not wish strangers to enter the house, while I am paying 800 euros per month for its use?

Thank you

Dear Madam,

You have been told correctly.

I copy you in my article on the matter which explains this in more detail (specifically Landlord's mistake number five):

Renting Property in Spain: Common Mistakes to Avoid (Part I)
- 12th May 2010 Levante Lifesyle Magazine


10 Common Mistakes to Avoid on Renting Property in Spain

Raymundo LarraÃ*n Nesbitt – Lawbird Legal Services
22nd of April 2010

I thought it would be a good idea to summarise in an article the most common faults that both landlords and tenants make on letting out property in Spain. Some of these slip-ups can cost landlords dearly and may even lead them to being prosecuted criminally in Spain by their tenants.

Many problems stem from the fact that landlords don’t fully grasp the legal implications of renting a property out in Spain. What renting entails is losing possession of the property which means you can no longer enter the property if it is not with the permission, preferably in writing, of your tenant, regardless if they are up-to-date with the rental or in arrears; that is not an issue. Landlords cannot enter their own property even if it’s just for “inspection” purposes without the said permission.

There are many more misunderstandings and blunders that I could have listed although for simplicities’ sake I’ve decided to leave them out to keep this article reasonably short.

Landlord’s top five mistakes

Many expat landlords are unaware of the different mechanisms in place to secure rental income and often fail to implement them in their rental agreements which can leave them unprotected if the tenant does not, or cannot, pay the rent. These mechanisms are explained in my article.- Landlord: Keys to Successful Rental Income – 31st January 2008.

Most of the blunders made by landlords are related to their tenants becoming non-paying tenants. This can understandably exert great pressure on landlords, especially if they are relying on the rent to offset it against their mortgage repayments, which can easily lead them to take rash decisions that may come back to haunt them later on in life-

1. Shutting off utilities (water & electricity). Landlords often feel the urge of doing this on their tenant missing out on their rental. If you happen to do this your tenant can report you to the police. Doing this may be labelled as either coercion or harassment or both. Your tenant can prosecute you criminally on doing this. So you may want to think twice before doing this. If the utilities are in the name of the landlord and he stops paying them on purpose to mount pressure on the non-paying tenant he can equally be prosecuted as it’s equated to shut-off the utilities physically.

2. Changing the locks. Same as above, it may be regarded as either coercion or harassment or both and you may be prosecuted criminally for this.

3. Evicting non-paying tenants with the assistance of “friends”. Landlords may feel tempted to take justice in their own hands and “break in” the property assisted by some square-jawed tattooed acquaintances from the local pub. This is seldom a bright idea and may land you and your “friends” in a Spanish jail for unlawful entry (trespassing). The only way to evict your tenant is to hire a lawyer and initiate a formal eviction procedure through the law courts. New laws have been enacted to help speed-up the eviction procedure. But on average it is still taking 5-9 months depending on how clogged law courts are.

4. Entering the property to perform a “routine check”. “It’s my property and I will enter it when I please.” I’ve often heard this line from disgruntled landlords who just cannot believe they are forbidden from entering their own property in Spain if it’s not with the prior –written– permission of their tenant. You simply need their permission following Spain’s Urban Tenancy Act regardless if they are paying the rent or not.

5. Eleven month contracts are short-term and watertight. Erm, I’m afraid not. This single blunder is responsible of many legal problems at a later date. What qualifies a rent as either a short or long-term one is not the fact that it’s labelled one way or the other. What matters really is that the tenant and his family are not using the property as their main residence and this must be expressly built and worded into the Tenancy agreement so it’s truly a short-term tenancy. Tenants can successfully challenge at court short-term contracts of 11 months morphing them into long-term ones (5 years). During the next 5 years you will be unable to recover possession of the property whilst the tenant pays being forced to rent it out. The new Express Eviction Law has now amended this and allows landlords to introduce clauses that waive the statutory long-term requirement of 5 years i.e. a clause whereby it is stipulated that the property will be needed for the landlord’s own use or for that of his family. However, if after 3 months’ time the landlord or his family have not taken possession of the property, he will be forced to re-install his ex-tenant and award him a suitable compensation to offset the expenses of the move.

Luxury rentals are excluded from this protection as Spain’s Tenancy Act does not rule them; luxury rentals are ruled by the will of the parties.


Tenant’s top five mistakes

To be fair to landlords tenants also make their fair share of mistakes.-

1. A verbal Tenancy contract is better than a written one. Erm, no. I really don’t know where tenants get this idea from. In Spain verbal contracts are as equally valid as written ones. The problem lies when there are disagreements. It’s very difficult to prove what was actually agreed in a verbal contract i.e. landlord pays for the utilities. It’s in the best interests of both tenant and landlord that rental agreements are always put in writing. Tenants have a right to demand having a verbal contract put in writing by their landlord.

2. I can always offset the 2 months let deposit against my unpaid rental. No you cannot. That two month’s deposit payable at the on start has its own purpose and at no time can be used to make up for any shortfall on the rental.

3. I can always leave the property ahead giving 30 day’s notice. Yes you can but you will be held liable to pay for the remaining months you agreed to rent. i.e. say you signed an 11 month contract and on the third month of the let you give notice that you will be leaving ahead of the expiration of the agreed rental. You may leave ahead but you will owe the let for the remaining 8 months despite you giving notice, it is unrelated. Some landlords will pursue you legally if you fail to pay the balance owed and yet others will turn a blind eye thinking it’s hardly worthwhile the legal hassle. Obviously depending on the sum of money owed it may be more or less worthwhile to pursue you legally. Whatever the case may be, you ought to know that legally you owe the outstanding months and if you decide not to pay them you are taking a legal gamble that may or may not pay off.

4. Deducting damages from the rent. All tenants feel tempted to fall for this one.

Classic examples of this would be:

i) After heavy rainfall I’ve had this terrible damp patch with an aggressive mould growth which has cost me €300 to be removed. Plus my new laptop got damaged as a result (€1,000). I’ll deduct the €1,300 from my let to make up for both.
ii) The washing machine broke down and cost me €150 to repair.
iii) My landlord is not paying the community fees and as a result I’m now being disallowed from using the complex’s facilities i.e. swimming pool. I’ll just pay €300 less a month to offset for this.

I could put more real-life examples of the queries I’ve received over the years but I think that’ll do for now. At no time can a tenant decide unilaterally to pay less rent or withhold part of the rent to offset against these unforeseen damages or expenses. First of all some damages have to be paid, under law, by the tenant himself; especially those relating to the normal wear and tear on renting out a property (Art 21 of the Urban Tenancy Act as well as Arts 1563 and 1564 of the Spanish Civil Code). It is seldom a good idea to practice retentions or withhold amounts when you feel it’s appropriate without having the landlord’s agreement. This may even be a cause for legal eviction as you are effectively breaching the signed Tenancy agreement.

Cont'd below

5. The property is being repossessed and I’m being asked by the lender to vacate it.

Actually you don’t have to in long-term tenancies. Following Art 13 of Spain’s Tenancy Act it allows tenants to stay in the property until they complete 5 years providing it’s a long-term tenancy. This is true for urban rentals signed after the 1st of January 1995. The bank after repossession takes on the role of landlord. Lenders on repossessing the property must respect by law outstanding tenancy agreements. The tenant must continue paying the rent to the new owner, the bank. Obviously both tenant and bank are free to decide that it may be better to reach an amicable settlement to leave the property ahead of the 5 years. i.e. they can decide on a suitable compensation for all the hassle involved, say 6 month’s tenancy, plus the expenses of the removal. There’s freedom to agree.

In Conclusion

Spain’s Tenancy laws are biased towards tenants for historical reasons that need to be addressed immediately. The Government has taken notice of this pro-tenant bias and are regularly passing new laws, i.e. Express Eviction Law, with the aim of streamlining rental procedures. There is much to be accomplished still if Spain’s rental market is to become as strong and relevant as that of fellow European countries.

Please note the information provided in this article is of general interest only and is not to be construed or intended as substitute for professional legal advice.

Related articles:

Rent-to-Buy Or How To Profit From Spain's Market Downturn – 5th November 2009

Express Eviction Law Passed by Congress – 30th October 2009

Non-Paying Tenants? No Longer an Issue – 23rd October 2009

Comunidad de Propietarios: Avoid Problems with Your Neighbours in Spain – 26th June 2009

New Express Eviction Law: Much Ado About Nothing -13th July 2009

Paying the Rent Late Twice will be Cause of Eviction – 4th June 2009

Spanish Express Eviction Law Pre-Approved – 24th December 2008

Landlords Afraid of Non-Paying Tenants Take Pre-emptive Measures -16th September 2008

Landlord: Keys to Successful Rental Income – 31st January 2008

How to Evict Non-Paying Tenants – 17th December 2007



Related legal services offered by Lawbird:

Tenant Eviction for Spanish Property
Drafting of Tenancy Agreements


Lawbird Legal Services is a law firm with broad experience in Litigation, Corporate and Spanish Property Law.

That´s a very interesting article. Thank you.

So the short answer is no, they can´t give me two month´s notice....?

You're welcome.

One thing is you using as leverage the threat of the compulsory long-term tenancy (5 years) and a different matter is actually doing it. But basically they cannot do it unless you agree to it and they compensate you for teh hassle. The Tenancy agreement is binding for both parties.

In short I would need you to scan and e-mail me your Tenancy agreement before giving you an informed reply just to make sure there is no special clauses. I'll review it without compromise and revert back on your legal options.

Yours faithfully,
Raymundo LarraÃ*n Nesbitt