New rental contract conditions
17 January, 2019Erika
The Council of Minsters has approved a law of royal decree to improve the access to housing and encourage renting. The following are the main points included in this set of urgent measures:
- The obligtatory extension period included in rental contracts has been expanded from three to five years – or seven if the lessor is a company. This extension will not be retroactive and will only affect contracts signed after the passing of the new law.
- The tacit extension period has been extended from one to three years. This refers to the time period by which the contract is automatically extended, after the end of the obligatory extension period, if the contract is not voided by either party.
- The lessor cannot require a deposit of more than two months, except in the case of a long-term contract.
- Agreements about housing renovations can be formed between the landlord and the tenants during the rental period, without waiting until the end of the contract.
- The costs of preparing the contract and managing the property will be borne by the lessor when said is a legal entity, except for costs that have been incurred on the initiative of the lessee.
- If the rental contract is registered correctly, both the landlord and the tenant will be exempt from the Capital Transfer Tax and the Documented Legal Acts Tax.
- The obligation to pass on the Property Tax to the lessee has been eliminated in the case of housing rented by the government or public entities.
- With regards to the Horizontal Property Law, housing communities can control tourist rentals (with a three-fifths majority) to foster coexistence in communal properties.
- Tourist rentals will no longer be considered under Urban Rental Law – they will now be considered as tourist activities and treated as an economic activity.
- Eviction procedures have been modified. From the moment that an eviction is requested, social services will be obliged to file a court report on the conditions that will be experienced by the evicted tenants. Once the court has received the report, the procedure will be placed on hold for a month (or two if the lessor is a legal entity), to allow time for the evicted tenants to find new housing.