Landlords and tenants in SpainSpanish Law Thu, 13 Dec 2012
As more and more people have found it difficult to sell their home but still need to move, the option to rent out their Spanish home has become the best alternative.
However, it is not without its difficulties. Landlords come in all shapes and sizes and not all have met their legal obligations. Tenants can also be a risk and everyone has at least one story of trashed accommodation to tell. In Spain, there has been a tradition of protection lying more on the side of the tenant than the landlord. This has put some potential landlords off in the past. What will happen if you can’t get your tenants out when you want to? What control can you still maintain of your property? Will they look after it?
There is still no guarantee but there is a new law over long-term property lets that gives more power to landlords. The process of evicting a tenant in Spain is now a much shorter process than it was previously and may now take around two months rather than two years. According to the new law, landlords have the right to a quick court hearing and legally a tenant can be evicted after ten days have elapsed if they are not able to give a good reason for the delay.
There are reductions in the minimum length of a long-term contract. Previously it was five years with the option of extending for another three years with the landlord’s consent. This has been reduced to three years with the option of an additional year if both parties agree. The capped annual increase in rent has been removed and landlords can now negotiate any price increase or maintenance of the same level in agreement with the tenant.
In order to encourage more foreign buyers there are tax benefits too. Where a property is leased on a long let, the owner can expect a tax break of 60% on income that they earn from the rental. If the property is rented out to anyone between the ages of 18 and 30 who are not eligible for state rent support they will receive tax relief of 100%.
These are significant differences in the balance of power between landlord and tenant. Not everyone is happy with the changes and we have yet to see what the implications will be as the new legislation embeds.