Things to remember when renting out your Marbella Property

Modifications to the Laws for Renting Residential Properties

The Spanish Government takes measures to make renting residential property more flexible.

The Spanish residential property market is made up of a high number of homes held in ownership and a low number of properties that are rented out. In Spain the percentage of the population who live in rented accommodation barely reaches 17%, compared to the European Union average which sits at nearly 30%. This places Spain amongst one of the European countries with the lowest number of residences occupied by renting tenants.

Why would this be? The Government believes that this is due to either an insufficient number of rental properties on offer in the marketplace, or because rental prices are too high. It is also of the opinion that the Spanish rental market is based on the personal relationships between owner and tenant, which means that the sector is even further away from being as professional as it should be. However, we believe that a big influence to the small percentage of residential properties being rented, as the main family home, is possibly due to the fact that current legislation does not protect the parties, either the owner or the tenant, with sufficient flexibility or allow them to adapt to major changes that may occur in their circumstances.

Marbella Rentals MP Dunne Properties

Various modifications have been introduced into the existing Law on Rental Accommodation, and the Government states that the objective of these modifications “is to make the rental market more flexible by trying to reach a balance between the need for rental properties and the guarantees that should be given to the owners in return”.

The most significant modifications

1.    More freedom to draw up the points agreed upon within rental contracts, and priority is given to the wishes of both parties, provided they comply with the Law.

2.    Rental Periods and Renewals: the maximum initial period that a property can be rented up to is 3 years, compared to 5 years previously. Automatic renewals, both parties being in agreement, will be for a maximum period of 1 year instead of 3 years.

3.    Under certain circumstances, the owner can recuperate the property if he/she needs it for his/her main residence. This can only be done, without the need to give advance notice, after the first year of the rental contract has expired.

4.    The tenant is now able to terminate the rental contract at any point in time after the first 6 months have elapsed, and after having communicated this decision to the owner with at least thirty days’ notice. Should they so wish, the parties can agree on compensation in the case of early cancellation of the contract.

5.    Residential property leases must be registered, otherwise they will have no legal weight before third parties who do register a contractual agreement and who then lay claim to rights over the property. Third parties cannot be penalized by the existence of a rental lease which has not been duly registered. None of the legal rights of either owner or tenant will be affected by the simple act of registering the lease of a property.

6.    In recent years there has been a gradual and significant increase in the use of private homes for tourist accommodation, which could be detrimental to the tourist industry´s registered accommodation providers and also to the actual tourist resort. For this reason, the Law excludes them from being considered “residential property rentals” and includes them under the legislation applicable to the tourism sector. Should the latter not apply either, they will abide by the legislation in force regarding “seasonal leases”.

The Spanish Government also recognizes the need to standardize legislation for rental accommodation in order to protect the rights of both owner and tenant, whilst at the same time making sure that all contractual terms and conditions are backed up by existing law, which is not the current case.

Text by Patricia Torney, March 2014
Based on the Official Spanish State Bulletin of June 05, 2013
Law 04/2013

Mary Dunne

Managing partner

+34 952 866 072

info@mpdunne.com
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