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The following information and advice provided is for
guidance purposes only and although believed to be
accurate it is not a substitute for personal,
professional legal advice and it cannot be a basis
for any claim against Tenant Check Spain.
Spain’s current Law of Urban Lettings is the “Ley de
Arrendamientos Urbanos (1994)" which came into effect
on 1st January 1995. It was introduced to provide a
better balance between the rights and the needs of
both tenants and landlords.
Rental contract
Although there is not a legal requirement to have a
contract there are two types of rental contracts
available –“Vivienda” and “Arrienda de Temporada”.
A Vivienda contract is a contract which is
renewable for up to five years and is seen as a
“residence” contract. It is meant for long term lets
where the tenant wants to make the property their
home and this type of contract means that they are much
more protected and therefore have more stability.
The contracts are normally made for 1 year however
the tenant, by law, has the automatic right to
extend for up to 5 years. Rent can be revised upward
each year by an inflation factor only. After 5 years
have elapsed and assuming that both parties wish to
renew, then the rental price can be changed provided
both parties agree. If the landlord does not wish to
renew after 5 years then the tenant must be
officially notified well before the contract ends
otherwise the contract is regarded as renewed for a
further 2 years.
An Arrienda de Temporada contract is a short
term contract and although there is no particular
duration after which short term becomes classed as
long term, it normally does not exceed 1 year. The
purpose of this contract is to show the intention of
impermanence so that the tenant does not establish
full rights. The contract cannot be automatically
extended after the first year unless the owner
wishes to do so. If not, the tenant is required to
vacate the property. The tenant has no legal rights
to an extension of the contract. The contract will
show the amount of rent payable, manner and date of
payment, deposit details and the time period. As it
is a temporary contract it shows clearly that it is
not a permanent residence.
The rental contract should ideally be written in
Spanish however a foreign language contract, such as
English, is perfectly legal although it would need
to be professionally translated into Spanish in the
event of court proceedings. However if the contract
doesn’t state “Vivienda” or “temporada”,
the landlord could have difficulties when it comes
to renewing. For example: If you, as the owner,
intended only to rent to a tenant for a year,
provided them with an English contract which didn’t
clearly state it as a “temporada” contract, the
tenant could, at the time of renewal, claim that the
property was their permanent residence. If this
occurred the tenant would inevitably win their case
and you would be required to renew for up to 5
years.
You can register your contract with the Spanish
housing department, although many owners choose not
to do so, possibly because they do not intend to
declare this income to the tax office. However in
doing so you are ensuring that you have the full
protection of the law should a problem arise. Even
if you do not register the contract, the contract is
still seen as a legal document.
It is therefore extremely important that you use the
correct contract for your needs. If you are using a
rental agency, check to see which contract they use
before they rent your property and do
not allow them to sign a contract on your behalf
unless you have consented to this in writing. If you
are renting the property yourself employ a lawyer to
draft the contract for you. If you do not provide a
contract a tenant can still take legal action if
there is a dispute provided they can produce
evidence to show they have paid rent.
An owner who wishes to rent their property on a
short term basis with many clients e.g. weekly
holiday rentals, should legally declare the property
as a tourist letting accommodation. Inspectors will
visit the property to check the standard of the
property and the tax office is informed. In some
areas it is a legal requirement to obtain a tourist
rental licence. If you do not have one and you are
found to be renting your property on a weekly basis
you could be fined heavily. The department of
tourism in your area can advise you further on this.
Deposit
An owner has the right, by law, to ask a tenant for
a deposit (fianza) to cover damages and breakages. A
deposit equivalent to one months rent can be asked
for unfurnished properties where by it is acceptable
to ask for two months rent for furnished properties.
For short term holiday rentals, the security deposit
is normally between 150 – 300 euros. On Vivenda
contracts the deposit can be increased after 5 years
provided both parties agree.
It is advisable that the deposit is held by a third
party and not paid into an owners account as there
can be problems releasing this money at the end of
the period and returning it to the tenant. The
deposit can be held by the housing department of the
regional government however it is quite common for
your rental agency to hold this money on your
behalf. You should provide the tenant with a receipt
stating that they have paid a security deposit.
The deposit cannot be used as a rent payment.
The deposit should be returned to the tenant,
provided all bills are up to date and the property
is returned to the same standard, within one month,
from the date that they vacate.
Utility payments
For weekly holiday rentals the owner is responsible
for paying the utility bills such as water, gas and
electric.
Tenants who rent long term, on either type of
contract, are normally responsible for paying these
bills. Some owners choose to pay this and simply get
the tenant to reimburse them however others change
the direct debit details so that the payment goes
directly from the tenant's bank account. In doing
this, the owner does not to need to worry about
paying the bills and trying to get the money back
and if the tenant does not pay and the supply is cut
off then it is the tenant's responsibility to arrange
the re-connection.
The contract should state which bills the tenant is
responsible for and how this should be paid.
Maintaining your rental property
An owner is required to provide their property in a
fit and habitable state with all appliances working
and a tenant can, by law, cancel a contract if the
property is not maintained or repairs not carried
out by the owner to ensure that the property is kept
in a fit and habitable state. If an item breaks then
the owner has an obligation to repair or replace it
unless it has broken as a result of misuse, overuse
or negligence on the tenant's part.
The tenant can carry out emergency repairs to avoid
any serious or immediate damage. The tenant must
notify the owner of his intention and the owner must
then reimburse the tenant for the cost.
The owner must give a tenant 3 months notice if he
intends to undertake any repairs affecting health,
hygiene and comfort. The tenant can then renounce
the contract within 1 month of this notice. If the
tenant chooses to stay he may get a reduced rate in
relation to the dwelling rooms that cannot be used
because of the repairs.
Community Fees
Community fees are normally payable by the owner. A
Vivienda contract can contain provisions to
have the tenant pay the fees, or request
contributions towards it, and sometimes the IBI.
However under Spanish law these terms can be seen as
abusive and the tenant can protest it. Strictly in
legal terms it is the owner’s responsibility.
Short term tenants are not required to pay these
fees.
IBI
The IBI (Impuesto sobre Bienes Inmuebles) is
a municipal real estate tax which is payable once a
year. The tax varies from the size of the property
to the area where the property is. Those who pay on
time can sometimes receive a 10% discount. A
surcharge of 20% can be added if not paid on time.
The owner is responsible for this tax.
In many cases the notification from the tax office
is not sent or fails to turn up so it is strongly
advised to set up a standing order for this payment
so that it is not forgotten. Your bank should be
able to advise you on this.
Selling your rental property
If a tenant is renting a property on a Vivienda
contract and the owner wishes to sell, then the
tenant has the right of pre-emption (derecho de
tanteo) and the tenant must be offered first
refusal. This is legal law and the owner must notify
the tenant in writing detailing the price and
conditions of the sale and must give them a
reasonable period of time to reply. If the tenant
does not reply or refuses then the owner is free to
sell. Failing to inform the tenant means the tenant
has the right to have the sale annulled and purchase
the property themselves at the price stated on the
sale contract.
A purchaser who buys a property that is occupied by
a tenant on a Vivienda contract must take on
the rights and obligations of the vendor. The new
owner cannot terminate the contract and must allow
the tenant to stay in the property until the end of
the contract.
With temporary contracts this rule does not apply
however it is strongly advised to inform the tenant
immediately if you wish to sell the property,
possibly offering first refusal. Although it is a
temporary contract, the law states that the tenant
has the right to stay in the property until the end
date stated on the contract.
Evicting a tenant
An owner can commence legal proceedings against a
tenant by filing a court order against them known as
a Una Orden de Desahucio. The normal reasons
for doing so could be:
 Non
payment of rent or deposit
Tenant
subletting without the owners consent
Tenant
deliberately causing damage to the property
Tenant
carrying out repairs without the landlords consent
Tenant
causing a nuisance to the neighbours
Tenant
using the property for fraudulent or illegal
activities.
Legal procedures for evicting someone who refuses to
leave can take over 6 months. Some courts have also
ruled that to conduct proceedings for non rent
payment the arrears must exceed 6 months before any
action can commence. However many solicitors will
start legal proceedings prior to the 6 months and
often this is enough for a tenant to pay up.
Tax
Anybody earning an income from letting their
property must pay tax on this income. Many people
choose not to do so but by law it is a requirement.
All owners are advised to seek legal advice on this
matter.
Non residents pay Spanish non resident income tax of
25% which is declared on Form 210. Your lawyer or
accountant would be able to assist you with this.
Residents benefit from a 50% reduction in rental
income for tax purposes and they add their rental
income to their other income when making their
annual Spanish income tax declaration. Maintenance
expenses relating to the property can be then be put
down as a business expense and deducted from the
tax.
The law in Spain allows owners to arrange for
tenants to pay your tax by way of a deduction from
the rent payment. If you choose this method you must
ensure that you get receipts showing proof of
payment and copies of their identification
documents.
If a tenant pays the owner in another currency in
another country, the income tax is still applicable
as the property is in Spain.
Tenants who make tax declarations in Spain are now
required to provide the landlords name and tax
identification number on their tax declarations.
This can assist the Tax Agency by identifying
undeclared income by landlords.
For more information please click on the following
links:
 Renting your property
Property presentation guide
Decreto 218/2005 |
