CHAPTER I –  Housing rental (Permanent Residence)

Concept

(LAU art.2)

A residential lease is considered to be one that covers a habitable building, the primary purpose of which is to satisfy the tenant’s permanent housing needs.

Therefore, for the lease to have this character, the following requirements must be met :

– that it is a building , that is, an architectural structure attached to the ground ( CC art.334.1º ); and

– that the habitable building satisfies the tenant’s permanent housing needs .

The legal regime applicable to the rental of the home also extends to its annexes (furniture, storage rooms, parking spaces, terraces, gardens…), provided that the following requirements are met ( LAU art.2.2 ):

– that they are accessories to the rented property, although it is not necessary for them to be part of the same building, it is only required that they be located in a place that allows them to be used as dependent on the property; and – that their use is ceded by the same landlord.

If the landlord of the dwelling is not the same as the landlord of the accessory item, the lease of the latter is considered for use other than housing.

Clarifications

1) Compliance with the habitability requirement does not necessarily have to be linked to compliance with the administrative requirements, or to the granting of the license or certificate of habitability by the respective city council, but rather to the suitability of the building to satisfy the tenant’s housing needs ( AP Barcelona 18-5-05, EDJ 99302 ).

2) The leasing of caravans or camping tents , which are of a movable nature, does not constitute a building and is therefore not regulated by the LAU ( AP Barcelona 10-4-07, EDJ 129949 ).

3) For the annexes and accessories to the home – storage room, parking space and common elements – the same rules apply as for the home, so it must be understood that, at the same time that the tenant takes possession of the home, he also takes possession of the annexes ( AP Madrid 27-1-12, EDJ 26757 ).

4) The denial of access to housing due to a person’s sexual orientation and identity, gender expression or sexual characteristics is considered a very serious administrative offence, when it does not constitute a criminal offence ( L 4/2023 art.79.4.g and add. prov.2ª ). Likewise, leasing service providers, real estate brokerage, advertising portals, or any other natural or legal person who makes an offer available to the public are expressly prohibited ( L 15/2022 art.15 ):

• Refuse an offer to purchase or lease, or refuse to start negotiations or in any other way prevent or deny the purchase or lease of a home or business premises, due to any of the causes of discrimination provided for in Law 15/2022 , when a public offer of sale or lease has been made.
• Discriminating against a person regarding the terms or conditions of a home lease based on such causes, maintaining this obligation throughout the subsequent period of use of the home, in the case of leases or similar situations.

With effect from 26-4-2024, a series of measures have been established in Catalonia :

The main purpose of which is to prevent many owners of rental properties from attempting to evade the protection granted to tenants by the legislation on residential leases. This fraud is basically being carried out by trying to pass off rentals that are actually residential rentals as temporary.

In this regard, Catalan housing legislation is modified in the following aspects related to renting:

• Among the mandatory information that must be included in the advertising of a rental property located in an area with a tense residential market and including its price, is the price resulting from applying the reference price index system ( Catalonia Law 18/2007 art.59.g ).

Failure to do so constitutes a minor infringement in the field of consumers and users of housing in the real estate market ( Catalonia Law 18/2007 art.12.2.f ).

Specifically, a period of 5 days is established for the content of housing rental advertisements published before 26-4-2024 to adapt to these provisions.

• In the offer and lease contract , the landlord must now include the following information ( Catalonia Law 18/2007 art.61.2.faiy art.66.2 ):

– the rental price resulting from applying the reference price index system, justified by the supporting document obtained from the public consultation system;

– the price of the last rent of the lease that has been in force in the last 5 years in the same dwelling; and

– if the property is located in an area with a current tense residential market, the status of the owner of the property as a large property owner.

• The character of therental of housing , and the application of its regulation, to contracts signed on a temporary basis for professional, work, study, medical care or assistance reasons, provisional situations such as waiting for delivery of a home or return to the habitual residence, or for other similar uses in which a home is required ( Catalonia Law 18/2007 art.66 bis.1 ).

Likewise, all contracts in which ( Catalonia Law 18/2007 art.66 bis.2 ) are considered residential leases :

– a specific duration is provided for, but a temporary rental purpose is not expressly indicated; or

– where a temporary cause is indicated, but this is not documented or such documentation is not attached when posting the bond.

Finally, room-based leasing or any other type of physical or contractual fragmentation is also considered to be a residential lease. Therefore, the sum of the rents agreed in several simultaneous lease contracts for a dwelling located in an area with a tense residential market cannot exceed the maximum rent applicable to the unitary lease of the dwelling ( Catalonia Law 18/2007 art.66 bis.4 ).

• It is considered a lease for a different useto the one that is exclusively for leisure, vacation or recreational purposes, stating this in the contract, duly accrediting it and depositing the supporting documentation together with the deposit ( Catalonia Law 18/2007 art.66 bis.3 ).
• It is a rental infringement to set a rent that exceeds the maximum amount allowed for renting a dwelling subject to the price containment regime. The degree of infringement depends on the difference between the two prices:

– it is a very serious offence when the income is more than 30% ( Catalonia Law 18/2007 art.123.4.a );

– it is an infraction serious when it exceeds between 10 and 30% ( Catalonia Law 18/2007 art.124.4 ); and

– it is a minor infraction when it exceeds less than 10% ( Catalonia Law 18/2007 art.125.4 ).

• In relation to the cause or purpose of the contract, the following are also infringements:

– of a very serious nature when a fraudulent one is established to avoid the application of the rights and guarantees recognized to the tenants, declared as such by a final court ruling ( Catalonia Law 18/2007 art.123.4.b ); and

– of a serious nature , not stating it in the lease contract ( Catalonia Law 18/2007 art.124.4.b ).

• It is now considered a serious infringement to pass on to the tenant the costs of real estate management , as well as those of formalizing the contract ( Catalonia Law 18/2007 art.124.4.b ).

housing policy in this autonomous community are established :

• It is now considered a serious infringement not to provide information in a timely manner regarding the data that must be registered in the Register of vacant homes and homes occupied without an enabling title and in the Register of large property owners ( Catalonia Law 18/2007 art.124.1.f ).
• In addition to the areas delimited as areas of first refusal and right of redemption in favour of the Administration in the Territorial Sectoral Housing Plan, the Administration may exercise this right in transfers that occur within the areas declared as a tense residential market ( Catalonia Law 18/2007 art.15.2 ).

Specifically, the transfer of any home located in an area declared to be a tense residential market that is owned by a large holder, a legal entity, that is registered in the registry of large housing holders is subject to the right of first refusal and withdrawal of the Generalitat Administration ( DL Catalonia 1/2015 art.2.2 ).

• In order to have greater resources to invest in public housing, the percentage of availability that the Catalan Land Institute must maintain of the rental deposits to guarantee the corresponding cancellations and returns is reduced from 10% to 5% ( Catalonia Law 13/1996 art.7.1 ).

What is relevant and what determines whether the lease is for housing is its purpose : the purpose of satisfying the primary need for housing ( AP Barcelona 8-5-08, EDJ 92040 ; 7-6-12, EDJ 177104 ). This, and not the duration of the contract, is what distinguishes the lease of housing from the seasonal lease ( AP Barcelona 27-4-04, EDJ 84869 ; AP Málaga 29-9-07, EDJ 394241 ; AP Pontevedra 10-11-16, EDJ 221636 ). Therefore, it is essential to clearly express the reason in the contract. In case of doubt, if the reason for the temporary nature or the use other than housing in general is not specified, the tenant will tend to be protected by understanding that the contract is for the lease of housing.

When the classification of the lease as seasonal is abusive , since it clearly seeks to avoid the duration regime of the housing contract ( LAU art.9 ), nothing prevents, in accordance with the CC art.6.4 , the application of the rule that, precisely, was intended to be avoided ( AP Madrid 23-12-04, EDJ 231503 ).

On the other hand, it is necessary to take into account not only the concept and meaning of the leased property, but also the actual use that is given to it , regardless of the provisions documented in the signed contract. It is therefore of little importance whether the contract states that it is a lease of a dwelling or an office, since the classification does not depend on what the parties indicate ( AP Madrid 19-9-08, EDJ 318169 ).

As an exception , the rental of a dwelling does not lose this condition, even if the tenant does not have his permanent residence on the rented property, provided that his legally or de facto non-separated spouse or his dependent children live there ( LAU art. 7 ). This is in line with family protection and the recognition of the joint nature of the marital lease, even if formally only one of the spouses is the owner ( CC art. 1320 ).

Children may also be the sole users of the property, but only those subject to parental authority, even if extended, who are financially dependent on the tenant. If the children who are occupying the property do not depend on the tenant, and the tenant has abandoned the property as their habitual residence, this would be a transfer ( AP Barcelona 15-2-08, EDJ 42466 ; AP Madrid 6-2-08, EDJ 28190 ; AP Zaragoza 24-10-08, EDJ 334390 ).

Also included are those who are recognized as having the right to support , since the person obliged to provide support may choose to receive and maintain the person receiving support in his or her own home.

Parties of the contract

 The landlord, as the recipient of the rent, and the tenant, as the occupant of the property and obliged to pay for it, are the two usual positions in the tenant’s contract.

Although it is common for the landlord to also be the owner of the property, there may be other situations, such as, for example, where he or she is only the usufructuary of the property.

In relation to the landlord, the concept of large holder takes on special importance , defined as the natural or legal person who owns ( L 12/2023 art.3.k ):

– more than ten urban properties for residential use; or

– a constructed area of more than 1,500 m2 , excluding garages and storage rooms.

However, in the declarations of the zone of tense residential market (No. 4690 s. ), the autonomous community may consider the owner of 5 or more urban residential properties located in said area to be a large holder. This decision must be justified by the corresponding explanatory memorandum.

There is a debate as to whether the tenant must necessarily be a natural person and not a legal person , given that the latter does not need housing. In principle, the lease made by a legal person tenant cannot be considered a lease of housing, even if the contract is signed for the same to be occupied by a natural person, for example an employee, it would then be a lease for use other than housing ( AP Cantabria 11-2-09, EDJ 79360 ). However, it would be necessary to assess, where appropriate, the protection of the ” occupant ” of the housing ( AP Barcelona 4-2-15, EDJ 55697 ).

Contrary to this criterion, on occasions and for very specific cases , such as the destination of the representative of the legal entity tenant as a family home, the existence of a residential lease has been admitted ( AP Madrid 30-4-08, EDJ 108425 ).

Another exception could be considered to be the leasing of housing by a legal entity when the primary purpose is to meet the housing needs of its associates or members who, according to its internal rules, live in a community. This is the case, for example, of a religious congregation, provided that there is no subletting or other type of situation such as an employment or lodging contract.

Clarifications

1) The constitution of a lease for more than 6 years is an act of disposition of the property and not of ordinary administration, because it requires the consent of all the owners of the property ( DGSJFP Resol 27-9-2 ).

2) For tax purposes, the landlord is allowed to apply a reduction in the income from the rental of housing in his/her personal income tax when, the tenant being a legal person, the contract establishes the exclusive use of the housing for a specific natural person (No. 7557 ).

Formalization of the contract

(LAU art.37 ; L 12/2023 art.30 and 31)

The contract does not necessarily have to be written, the parties are given freedom of form, so that any form in which it was agreed upon, whether oral or written, is valid, provided that its existence can be demonstrated and the essential conditions for its validity are met: consent, object and cause ( CC art.1261 and 1278 ). However, the parties may compel each other to formalize it in writing, in which case the following must be stated :

– the identity of the contracting parties;

– the identification of the leased property;

– the agreed duration;

– the initial income; and

– other clauses that the parties have freely agreed upon.

Regardless of the freedom of form, the lease agreement may contain certain contractual clauses that, in order to be valid, require written form , for example, the agreement on general expenses ( LAU art.20.1 redacc L 12/2023).

Minimum information

(L 12/2023 art.31)

Likewise, with effect from 26-5-2023 , the Law on the Right to Housing has established a series of measures that provide transparency and protection to consumers in the rental of housing. In this sense, the minimum information that must be provided to the interested party who requests it is the following:

• Identification of the lessor and, where applicable, of the natural or legal person involved, within the framework of a professional or business activity, to act as intermediary in the transaction.

• Economic conditions of the operation : total price and concepts included, as well as the payment conditions that, where applicable, may be established.

In the case of leasing a home located in an area with a tense residential market , the owner and, where applicable, the intermediary, must indicate this circumstance and inform, before formalizing the lease, and in any case in the contract, of the amount of the last rent of the lease contract for a habitual residence that has been in force in the last 5 years in the same home, as well as the value that may correspond to it according to the reference index of rental prices for homes that is applicable.

• Essential characteristics of the home and the building, including:

– certificate or certificate of habitability;

– certification of the useful and constructed area of the home;

– age of the building and, where applicable, of the main renovations or actions carried out on it;

– services and facilities available in the home, both individual and common;

– energy efficiency certificate;

– accessibility conditions of the dwelling and the building; and

– status of occupancy or availability of the dwelling.

• Legal information on the property: registration identification with reference to the charges, encumbrances and liens of any nature, and the participation quota established in the title of ownership.

• Any other information relevant to the interested party, including territorial, urban planning, physical-technical, heritage protection, or administrative aspects related to the home.

In addition to this basic information, the interested party may request information on the detection of asbestos or other substances dangerous or harmful to health.

With effect from 26-4-2024, a series of measures have been established in Catalonia:

The main purpose of which is to prevent many owners of rental properties from attempting to evade the protection granted to tenants by the legislation on residential leases . This fraud is basically being carried out by trying to pass off rentals that are actually residential rentals as temporary.

In this regard, Catalan housing legislation is modified in the following aspects related to renting:

• Among the mandatory information that must be included in the advertising of a rental property located in an area with a tense residential market and including its price, is the price resulting from applying the reference price index system ( Catalonia Law 18/2007 art.59.g ).

Failure to do so constitutes a minor infringement in the field of consumers and users of housing in the real estate market ( Catalonia Law 18/2007 art.12.2.f ).

Specifically, a period of 5 days is established for the content of housing rental advertisements published before 26-4-2024 to adapt to these provisions.

• In the offer and lease contract , the landlord must now include the following information ( Catalonia Law 18/2007 art.61.2.faiy art.66.2 ):

– the rental price resulting from applying the reference price index system, justified by the supporting document obtained from the public consultation system;

– the price of the last rent of the lease that has been in force in the last 5 years in the same dwelling; and

– if the property is located in an area with a current tense residential market, the status of the owner of the property as a large property owner.

• The character of therental of housing , and the application of its regulation, to contracts signed on a temporary basis for professional, work, study, medical care or assistance reasons, provisional situations such as waiting for delivery of a home or return to the habitual residence, or for other similar uses in which a home is required ( Catalonia Law 18/2007 art.66 bis.1 ).

Likewise, all contracts in which ( Catalonia Law 18/2007 art.66 bis.2 ) are considered residential leases :

– a specific duration is provided for, but a temporary rental purpose is not expressly indicated; or

– where a temporary cause is indicated, but this is not documented or such documentation is not attached when posting the bond.

Finally, room-based leasing or any other type of physical or contractual fragmentation is also considered to be a residential lease. Therefore, the sum of the rents agreed in several simultaneous lease contracts for a dwelling located in an area with a tense residential market cannot exceed the maximum rent applicable to the unitary lease of the dwelling ( Catalonia Law 18/2007 art.66 bis.4 ).

• It is considered a lease for a different useto the one that is exclusively for leisure, vacation or recreational purposes, stating this in the contract, duly accrediting it and depositing the supporting documentation together with the deposit ( Catalonia Law 18/2007 art.66 bis.3 ).
• It is a rental infringement to set a rent that exceeds the maximum amount allowed for renting a dwelling subject to the price containment regime. The degree of infringement depends on the difference between the two prices:

– it is a very serious offence when the income is more than 30% ( Catalonia Law 18/2007 art.123.4.a );

– it is an infraction serious when it exceeds between 10 and 30% ( Catalonia Law 18/2007 art.124.4 ); and

– it is a minor infraction when it exceeds less than 10% ( Catalonia Law 18/2007 art.125.4 ).

• In relation to the cause or purpose of the contract, the following are also infringements:

– of a very serious nature when a fraudulent one is established to avoid the application of the rights and guarantees recognized to the tenants, declared as such by a final court ruling ( Catalonia Law 18/2007 art.123.4.b ); and

– of a serious nature , not stating it in the lease contract ( Catalonia Law 18/2007 art.124.4.b ).

• It is now considered a serious infringement to pass on to the tenant the costs of real estate management , as well as those of formalizing the contract ( Catalonia Law 18/2007 art.124.4.b ).

housing policy in this autonomous community are established :

• It is now considered a serious infringement not to provide information in a timely manner regarding the data that must be registered in the Register of vacant homes and homes occupied without an enabling title and in the Register of large property owners ( Catalonia Law 18/2007 art.124.1.f ).
• In addition to the areas delimited as areas of first refusal and right of redemption in favour of the Administration in the Territorial Sectoral Housing Plan, the Administration may exercise this right in transfers that occur within the areas declared as a tense residential market ( Catalonia Law 18/2007 art.15.2 ).

Specifically, the transfer of any home located in an area declared to be a tense residential market that is owned by a large holder, a legal entity, that is registered in the registry of large housing holders is subject to the right of first refusal and withdrawal of the Generalitat Administration ( DL Catalonia 1/2015 art.2.2 ).

• In order to have greater resources to invest in public housing, the percentage of availability that the Catalan Land Institute must maintain of the rental deposits to guarantee the corresponding cancellations and returns is reduced from 10% to 5% ( Catalonia Law 13/1996 art.7.1 ).

 Clarifications

1) The formalization of the contract is among the unavailable and common provisions for residential leases and for non-residential use (No. 407 ).

2) Regarding the costs of formalizing the contract and real estate management, see no . 557 .

3) Lease contracts must be registered in the Property Registry (no. 443 ).

4) A model for a residential lease contract is included in No. 12005 ; the official form for the lease of urban properties (OM 4-10-1999) can also be used, which will also be used to settle, if applicable, the property transfer tax, from which residential leases are currently exempt (No. 8775 ).

5) Prior to the obligation now imposed by Law 12/2023 art.31 , in order to rent a home, in some autonomous communities it was already necessary to prove that it meets the quality conditions, by providing a valid certificate of habitability . This is, for example, the case of Catalonia ( L Catalonia 18/2007 art.26 ). The certificate of habitability of a home is a document that certifies compliance with the minimum requirements for a space to be inhabited by people in terms of health, hygiene and solidity, from an administrative point of view.

Energy efficiency certificate

(RD 390/2021 art.17 ; L 12/2023 art.31)

The person responsible for ordering the energy efficiency certification and for keeping the documentation on it is the owner of the home, who must present it to the competent body of the autonomous community for the registration of these certifications in its territorial area and have it available to the competent authorities that require it for inspection or any other requirement.

When formalizing the lease, the tenant must be given a copy of the energy efficiency label as an annex to the contract and a copy of the document with recommendations for use for the user.

Although the delivery of the certificate to the tenant does not constitute a formal requirement that affects the validity of the contract, it is an administrative requirement, non-compliance with which constitutes an infraction punishable by the Administration, in accordance with the LGDCU art.47.1.gyu .

This certificate provides the tenant with objective information on the energy characteristics of the property, so that they can assess and compare its performance in this regard.

However, leasing is exempt from this obligation ( RD 390/2021 art.3 ):

– buildings officially protected because they are part of a declared environment or because of their particular architectural or historical value, provided that any action to improve energy efficiency would unacceptably alter their character or appearance, with the authority that dictates the official protection being the one to determine the unalterable elements; or

– which refers to buildings or parts of buildings isolated from them with a useful surface area of less than 50 m2 .

The certificate must be signed by a competent technician and its content must be as follows:

• Identification of the building or part thereof being certified, including its cadastral reference and, where applicable, the existence of special architectural cataloguing circumstances.
• Indication of the procedure used to obtain the energy efficiency rating, of those recognized in RD 390/2021 art.5 .
• Indication of the regulations on energy savings and efficiency applicable at the time of construction.
• Description of the building’s energy characteristics: thermal envelope, technical installations, normal operating and occupancy conditions, comfort conditions and other data used to obtain the building’s energy efficiency rating.
• Energy efficiency rating of the building expressed in accordance with the recognised document for rating the energy efficiency of buildings.
• Document of recommendations for improving the optimal or profitable levels of energy efficiency of a building in RD 390/2021 art.8.2.f.
• Description of the tests and checks carried out, where applicable, by the competent technician during the energy qualification phase and date of the visit by the competent technician.

Clarifications

1) The minimum energy efficiency requirements of buildings or units thereof are established in the Technical Building Code ( RD 314/2006 art.15 ).

2) The technical and administrative conditions, the calculation method to certify it and the energy efficiency label are common for the entire national territory ( RD 390/2021 art.1.2 ).

Contractual agreements

 The rental of housing is governed by the agreements, clauses and conditions determined by the will of the parties, within the framework of the provisions of the LAU art . 6 to 28. In this sense, the Law allows to agree, for example, the waiver by the tenant of the right of preferential acquisition (no. 635 s. ) or the non-subrogation due to the death of the tenant (no. 687 s. ).

In general, due to the prevalence of the autonomy of the parties’ will, clauses that improve the tenant’s rights are valid and those that harm him are void . However, clauses that imply an improvement in the tenant’s rights in exchange for establishing other clauses that worsen his position are also valid.

Void clauses

(LAU art.6 ; CC art.6.3)

Any stipulations that modify the rules governing the leasing of housing ( LAU art. 6 to 28 ) to the detriment of the tenant are void and must be considered as not included, unless the rule itself expressly authorizes it.

However, in addition to harming the tenant, for the clause to be considered void, the following is required :

– that limit a right granted by the LAU; and

– that the LAU has not expressly established that it can be regulated differently.

Thus, certain clauses that seem abusive and void to the tenant may be perfectly valid, so that if they are included in the contract that is signed, the parties are obliged to comply with what was agreed.

Only a judge has the power to declare a contractual clause void. Its inclusion does not invalidate the entire contract, but only the parts that may be considered void by the courts, which will simply be deemed not to have been included.

others , the contractual clauses that establish:

– the refusal to extend the lease, regardless of the landlord’s need for housing (no. 465 s. );

– the tenant’s waiver of the extension when signing the contract (no. 470 );

– the mandatory fulfillment of the first year of the contract (no. 726 );

– advance payment of more than one month’s rent (No. 486 );

– the transfer of the duty to maintain the home (No. 565 ); or

– the reservation by the landlord of the right to access the dwelling to check its condition, as this is contrary to the inviolability of the home ( Const art. 18 ).

General terms and conditions of contract

General terms and conditions of the contract usually appear in lease contracts entered into by private tenants in which the lessors are large holders and, generally, investment funds.

of various clauses included in one of these standard contracts has been declared due to abusiveness ( JPI Barcelona No. 31 9-1-23, EDJ 706936 ):

• The possibility of retaining the amount of the deposit in the event that the tenant returns the property with the walls painted a colour other than white or with holes, making the tenant bear the costs of restoring it to its initial state, because the tenant’s rights are disproportionately limited, as he is forced to keep it that colour throughout the lease or return it freshly painted, in an improved state and without the deterioration due to ordinary use, which, once the lease has ended, is the responsibility of the landlord. The obligations imposed on the tenant by law are exceeded, that is, small repairs derived from wear and tear due to ordinary use ( LAU art. 21.4 ); and the return of the property in the state in which it was received, except for normal deterioration due to the passage of time ( CC art. 1561 ).

• A penalty for late eviction of three times the daily rent for each day of delay, for establishing disproportionate compensation or penalties for a consumer ( LGDCU art.82.4.eydy 85.6 ). The wording of the clause should limit its application to the case in which the dwelling continues to be occupied, but without paying the agreed rent, since, if the tenant continues to pay, the delay is not causing any harm to the landlord, making the penalty totally disproportionate.

• Waiver of compensation for interruption of supplies due to causes beyond the landlord’s control. Since it is the landlord’s responsibility to maintain the habitability conditions of the property. This clause reverses the contractual obligations, since it implicitly exonerates the landlord from fulfilling his obligations and denies the tenant his legally recognized right to request the termination of the contract due to the lack of habitability of the property ( LAU art.21.1 ; CC art.1554.2 and 1556 ).

• The landlord’s right to make periodic visits to the property to check its condition does not respect the equality of rights and duties between the parties ( LGDCU art.4.byf ). An obligation not provided for by law is imposed, since it is at the time of delivery of the property that the tenant must return the property in the condition in which he received it ( CC art.1561 ), and only at that time can the landlord verify that the tenant has fulfilled this contractual obligation.

• Termination due to non-essential breach and non-refund of amounts in the event of termination attributable to the landlord ( LGDCU art.82.4.f ): the termination by the tenant because the landlord fails to comply with the conservation obligations of the LAU art.21 allows the tenant to request the restitution of the rent paid, even with retroactive effect, from the moment in which the landlord breached, as a proper and characteristic effect legally provided for the termination of contracts.
• The imposition of payment of non-payment of rent insurance on the tenant ( LGDCU art.82.4.e ), since the legislation in no case provides or establishes the possibility of demanding or passing on the expenses that may be generated by the measures that guarantee the solvency of the tenant.

The landlord has mechanisms that allow him to assess the solvency of the tenant prior to signing the contract, so the fact that this formula may be more economically beneficial for the tenant than requiring a personal deposit or a bank guarantee does not justify its lack of proportionality and legitimacy when it comes to the contract signed between a consumer and a business (“large holder”).

The tenant is made to assume an expense that has been contracted by the landlord and that benefits him exclusively, thereby breaking the balance and proportionality between the rights and duties of the parties in a contractual relationship.

• The income bonus violates the prohibition of increasing income according to the CPI when it ceases to apply ( LAU art.18 ):

– Firstly, the clause does not pass the prior transparency check , which it is required to do since its content affects an essential element of the contract: the price was not set in a clear and transparent manner so that it could be understood by an average consumer, but the rent for the first few months is set out in a separate addendum, separate from the contract, and under a commercial bonus promotion that may cause confusion for the tenant and mislead the average consumer. It should have been incorporated into the clause regulating the rent, and the real economic burden that it entailed for the tenant should have been stipulated or calculated.

– Secondly, regarding its proportionality , this clause infringes the legal regulation, since it has sought a way to circumvent the legal prohibition of updating the rent beyond the CPI during the minimum legal term of the contract (7 years) and to contractually protect the landlord so that he can increase the rent after 3 years to an amount that, otherwise, would be contrary to the law.

• Finally, the clause which states that the clauses of the contract have been negotiated individually as an imposition or waiver or limitation of consumer rights is also considered void due to being abusive. Although the exclusion of judicial control of individually negotiated clauses is established, the burden of proof of this individual negotiation is on the entrepreneur who alleges that this has been done so, which means that this clause is void as it contradicts the legal regulations on the burden of proof (Dir 93/13/CEE art.3.2; LGDCU art.83 ).

Registration in the Registry

(LAU 13.1 ; LH art.2.5ª ; RD 297/1996)

All lease contracts, regardless of their duration, can be accessed in the Property Registry.

Subleases, assignments, subrogations, extensions and any other modification of registered leases are also registrable.

Clarifications 

Lease contracts for urban properties intended for housing or uses other than housing, as well as their modifications, benefit from a 25% reduction in the notarial and registry fees that apply in accordance with RD 1426/1989 annex no. 2 and RD 1427/1989 annex no. 2 , respectively.

Registrable title

(RD 297/1996 art.2 to 4)

In order to register the lease or its modifications in the Registry, it is necessary that it be formalized in a notarial public deed or that the private document in which the contract was formalized be elevated to a public deed.

The title must contain the essential details of the contract formalized in writing (no. 430 ).

When the leased property is registered under a separate registry folio , all data regarding the population, street, number and location within the building of the leased property, surface area and boundaries of the property must be recorded by the notary, even if this data is not reflected in the private contract.

The registration data in the Property Registry must also be recorded, as well as, where applicable, the consecutive number assigned to the leased property in the horizontal property, as well as the community fee corresponding to it, when it has been agreed that the general expenses will be borne by the tenant.

If the leased property does not match the one with an open registry folio and is a part of it, the former must be described, with the same circumstances expressed, but it is not necessary to describe the rest of the building or dwelling.

Clarifications

Regarding the taxation in the ITP and AJD (AJD modality) of the granting of the public deed, see no. 8800 .

Registration

(RD 297/1996 art.6)

The initial contract and its modifications are subject to registration in the registry folio opened for the leased property.

The fact that the leased property does not form an independent registration folio in the Registry is not an obstacle that suspends the registration of the contract, provided that the building as a whole or the entire property is registered in the name of the lessor. In this case, without the need for segregation or prior constitution of horizontal property, it is sufficient that the leased property has been sufficiently delimited with an expression of its surface, location and boundaries. The registration is then carried out in the folio opened for the entire building or property.

However, when, in the opinion of the registrar, the clarity of the entries so requires, or when requested by the presenter, the registration of the lease of part of the registered property may be carried out on a separate folio, under the same number and the corresponding consecutive number. The opening of a new folio must be recorded by a reference note in the margin of the registration of ownership.

Clarifications

The prohibition of carrying out activities that harm the tenant’s activity, in the rest of the non-leased property or in its surroundings, is a manifestation of the obligation of the landlord to guarantee the peaceful use and enjoyment of the property and the use or activity agreed with him and, therefore, this clause must be registered ( DGSJFP Resol 22-5-23 ).

Cancellation

(RD 297/1996 art.7)

For the purposes of cancellation, a distinction must be made between leases with a duration shorter or longer than the minimum legal term (No. 457 ):

• The registration of urban leases with a duration less than the minimum legal term of 5 or 7 years is automatically cancelled by the registrar when both this period and the tacit legal extension period of 3 years have elapsed from the initial date of the contract – that is, currently when 8 or 10 years have elapsed – and there is no record of the conventional extension of the contract.

• The registration of other leases is cancelled automatically, using the same procedure, once the agreed term has elapsed and the extension of the contract is no longer recorded in the Registry.

Regarding contracts that are in a situation of tacit legal extension (No. 470 ), the following is sufficient title for the cancellation of the lease:

– a copy of the notarial act by which the tenant notifies the landlord of his intention not to renew the contract; or

– the copy of the notarial act by which the landlord notifies the tenant of his intention not to renew the contract, provided that the notification has been made in a timely manner and personally by the notary in the manner provided for by D 2-6-44 art.202 .

Effects of registration in the registry

For contracts signed after 6-3-2019 , the general effectiveness of the lease, both against third parties who have registered their right and against third-party purchasers, is no longer subject to its registration. The contract is no longer terminated even if the purchaser may be considered a third-party mortgagee (no. 667 ) or the landlord’s right is terminated within the minimum legal period (no. 675 ).

However, for contracts signed between 6-6-2013 and 5-3-2019 , the fact that the lease contract is registered in the Registry improves the legal position of the tenant:

a) In order for the rental of housing to take effect against third parties, it must be registered in the Property Registry ( LAU art.7.2 redacc L 4/2013).

• If the lease was registered prior to the transfer of the property, the purchaser, even being a third party in good faith ( LH art.34 ), is obliged to maintain the tenant during the initial term of the contract, the mandatory annual extensions and the tacit legal extension ( LAU art.10.2 and 14.1 redacc L 4/2013).

• The termination of the landlord’s right by conventional withdrawal, fiduciary substitution, forced alienation or by the exercise of a purchase option, does not produce the termination of the lease if the contract had entered the Property Registry prior to the rights determining the termination of the landlord’s right, continuing the same for the agreed duration ( LAU art.13.1 redacc L 4/2013).

b) Once the contract has been registered, if the termination of the contract due to non-payment of rent and the immediate return of the property to the landlord had been agreed, said termination takes place by operation of law once the landlord has judicially or notarially required the tenant at the address designated in the registration, urging payment or compliance, and the tenant has not responded within the following 10 business days or has responded accepting the termination ( LAU art.27.4 ).

Clarifications

Regarding the transfer of the leased property, see no. 630 s. and regarding the termination of the landlord’s right, see no. 675 s.

Duration/ Minimum legal term

(LAU art.9 )

The minimum legal term for lease contracts is currently 5 years if the lessor is a natural person, and 7 years if it is a legal person. It is made up of the contractual term, that is, the term agreed by the parties and, where applicable, a series of annual extensions until reaching this minimum period indicated by the law.

Since this period has been modified by the legislator on several occasions, it is necessary to take into account the date of signing of the contract to establish it.

Clarifications

In order to protect vulnerable persons, for lease contracts whose mandatory annual extension period ( LAU art.9.1 ), tacit extension ( LAU art.10.1 ) or extension by tacit renewal ( CC art.1566 ) would have ended between 28-12-2022 and 30-6-2023 , an extraordinary extension of 6 months could have been applied from the date of termination thereof ( RDL 20/2022 art.71 redacc RDL 1/2023). Regarding a similar mechanism established on the occasion of the health crisis, it has been determined that this extraordinary extension is applicable even if the contractual term already covered the entire legal minimum from the beginning – currently 5 years – because, although the mandatory extension or the tacit extension required by the application of the rule (in this case RDL 11/2020 art.2 ) does not end, it does not make sense that, if a shorter term had been agreed, and the legal extensions of the LAU art.9.1 were being applied , it would be possible to apply it up to the minimum legal limit; and, however, it would not be feasible, in the contentious case, because such a minimum legal duration had already been agreed initially. This is a differentiated treatment that lacks justification ( TS 21-12-23, EDJ 778630 ).

With effect from 26-4-2024, a series of measures have been established in Catalonia: 

the main purpose of which is to prevent many owners of rental properties from attempting to evade the protection granted to tenants by the legislation on residential leases. This fraud is basically being carried out by trying to pass off rentals that are actually residential rentals as temporary.

In this regard, Catalan housing legislation is modified in the following aspects related to renting:

• Among the mandatory information that must be included in the advertising of a rental property located in an area with a tense residential market and including its price, is the price resulting from applying the reference price index system ( Catalonia Law 18/2007 art.59.g ).

Failure to do so constitutes a minor infringement in the field of consumers and users of housing in the real estate market ( Catalonia Law 18/2007 art.12.2.f ).

Specifically, a period of 5 days is established for the content of housing rental advertisements published before 26-4-2024 to adapt to these provisions.

• In the offer and lease contract , the landlord must now include the following information ( Catalonia Law 18/2007 art.61.2.faiy art.66.2 ):

– the rental price resulting from applying the reference price index system, justified by the supporting document obtained from the public consultation system;

– the price of the last rent of the lease that has been in force in the last 5 years in the same dwelling; and

– if the property is located in an area with a current tense residential market, the status of the owner of the property as a large property owner.

• The character of therental of housing , and the application of its regulation, to contracts signed on a temporary basis for professional, work, study, medical care or assistance reasons, provisional situations such as waiting for delivery of a home or return to the habitual residence, or for other similar uses in which a home is required ( Catalonia Law 18/2007 art.66 bis.1 ).

Likewise, all contracts in which ( Catalonia Law 18/2007 art.66 bis.2 ) are considered residential leases :

– a specific duration is provided for, but a temporary rental purpose is not expressly indicated; or

– where a temporary cause is indicated, but this is not documented or such documentation is not attached when posting the bond.

Finally, room-based leasing or any other type of physical or contractual fragmentation is also considered to be a residential lease. Therefore, the sum of the rents agreed in several simultaneous lease contracts for a dwelling located in an area with a tense residential market cannot exceed the maximum rent applicable to the unitary lease of the dwelling ( Catalonia Law 18/2007 art.66 bis.4 ).

• It is considered a lease for a different useto the one that is exclusively for leisure, vacation or recreational purposes, stating this in the contract, duly accrediting it and depositing the supporting documentation together with the deposit ( Catalonia Law 18/2007 art.66 bis.3 ).
• It is a rental infringement to set a rent that exceeds the maximum amount allowed for renting a dwelling subject to the price containment regime. The degree of infringement depends on the difference between the two prices:

– it is a very serious offence when the income is more than 30% ( Catalonia Law 18/2007 art.123.4.a );

– it is an infraction serious when it exceeds between 10 and 30% ( Catalonia Law 18/2007 art.124.4 ); and

– it is a minor infraction when it exceeds less than 10% ( Catalonia Law 18/2007 art.125.4 ).

• In relation to the cause or purpose of the contract, the following are also infringements:

– of a very serious nature when a fraudulent one is established to avoid the application of the rights and guarantees recognized to the tenants, declared as such by a final court ruling ( Catalonia Law 18/2007 art.123.4.b ); and

– of a serious nature , not stating it in the lease contract ( Catalonia Law 18/2007 art.124.4.b ).

• It is now considered a serious infringement to pass on to the tenant the costs of real estate management , as well as those of formalizing the contract ( Catalonia Law 18/2007 art.124.4.b ).

Housing policy in this autonomous community are established :

• It is now considered a serious infringement not to provide information in a timely manner regarding the data that must be registered in the Register of vacant homes and homes occupied without an enabling title and in the Register of large property owners ( Catalonia Law 18/2007 art.124.1.f ).
• In addition to the areas delimited as areas of first refusal and right of redemption in favour of the Administration in the Territorial Sectoral Housing Plan, the Administration may exercise this right in transfers that occur within the areas declared as a tense residential market ( Catalonia Law 18/2007 art.15.2 ).

Specifically, the transfer of any home located in an area declared to be a tense residential market that is owned by a large holder, a legal entity, that is registered in the registry of large housing holders is subject to the right of first refusal and withdrawal of the Generalitat Administration ( DL Catalonia 1/2015 art.2.2 ).

• In order to have greater resources to invest in public housing, the percentage of availability that the Catalan Land Institute must maintain of the rental deposits to guarantee the corresponding cancellations and returns is reduced from 10% to 5% ( Catalonia Law 13/1996 art.7.1 ).

Contractual term

(LAU art.9.1 and 2)

The duration of the lease is freely agreed upon by the parties, and is, where applicable, subject to the mandatory annual extension mechanism (No. 460 ).

The calculation of the term begins from the date of the signing of the contract. However, if the property is made available to the tenant at a later date, the term is calculated from that moment, with the tenant being responsible for proving the date of the provision. As a civil term, non-working days are not excluded ( CC art.5.2 ).

When the contract does not stipulate a term or it is indeterminate – for example, when it only indicates that it is “of years” – it is understood that the lease is for one year, without prejudice to the tenant’s right to annual extensions until reaching the minimum legal term ( LAU art.9.2 ).

Clarifications

1) A summary table of the applicable regime and regulations based on the date of signing of the lease contract can be found in no . 417 .

2) Regarding the unstipulated or undetermined contractual term , the LAU, by setting the term of one year, radically departs from CC art.1581 , which, for these cases, links the duration of the lease to the term for payment of the rent: annual, monthly or daily.

3) It is a verbal contract, entered into as a continuation of a previous one, in which the agreed duration cannot be proven , in application of the rules of interpretation of contracts ( CC art.1281 s. ), the LAU art.9.2 is understood to be applicable and, therefore, a duration of one year for the same ( AP Jaén 12-5-05, EDJ 92234 ).

4) The expression ” indefinite duration of the contract ” is a concept contrary to leasing, which is characterised by its temporary nature ( TS 31-3-21, EDJ 520183 ).

Mandatory annual extension

(LAU art.9.1 and 3)

Although the duration of the lease is the one agreed by the parties, when the fixed term is less than 5 or 7 years – depending on whether the lessor is a natural person or legal entity – once it has concluded, the annual extension is mandatory for the lessor, until the lease reaches that duration. These extensions are voluntary for the lessee, who may withdraw from them at any time (nº 737 ).

The fact that the extension is always annual, even if the initial contractual term is not, allows the duration of the contract to be longer than 5 or 7 years. For example, in the case of an initial duration of 18 months, with a natural person landlord, the tenant is entitled to 4 annual extensions, which will result in a mandatory duration for the landlord of 5 and a half years.

These automatic extensions are mandatory for the landlord and optional for the tenant, such that the latter may not renew the contract by giving notice at least 30 days prior to the termination date (nº 725 s. ).

These deadlines apply to contracts signed from 6-3-2019 and to those signed between 19-12-2018 and 23-1-2019, under the validity of RDL 21/2018 .

For contracts signed between 6-6-2013 and 18-12-2018 or between 24-1-2019 and 5-3-2019, the minimum legal term, mandatory for the landlord, is 3 years. This term is voluntary for the tenant under identical terms to those of the current regulations.

Clarifications

1) For contracts signed between 1-1-1995 and 5-6-2013 , the lease of a dwelling also has the duration expressly agreed by the parties. However, if a term of less than 5 years has been agreed, the contract is obligatorily extended for the landlord, whether a natural person or legal entity, up to a maximum of 5 years. However, in this case, although these extensions are also voluntary for the tenant, he can only leave when each of the annual periods is completed.

2) It is common to include a clause in contracts stating that the lease has a duration of one year, after which the parties may decide to extend it. This is a void clause because it is contrary to the legal extension provided for in the LAU art.9.1 (nº 440 ). The tenant’s waiver of these extensions upon signing the contract is also void, but not the waiver when this right has already arisen, if it is done in a clear, express and decisive manner ( AP Madrid 26-9-05, EDJ 186787 ; AP La Rioja 28-11-14, EDJ 276955 ).

Denial of extension

(LAU art.9.3)

As an exception, once the initial contractual term has elapsed – for example one year when an annual duration has been agreed – the landlord may recover the property if he needs to use it as a permanent residence, for himself or for his first-degree relatives, by blood or adoption, or for his spouse in the event of a final judgment of separation, divorce or annulment of marriage. This possibility of recovery of the property by the landlord is clearly regulated in the Law as a right to deny the extension, and not as a right to withdraw , therefore, it is a right that can only be used at each of the expirations of the contract or its extensions.

Also, with effect for contracts signed after 6-3-2019 , the denial requires:

• That the landlord is a natural person . Therefore, there is no possibility of denying the extension when the landlord is a legal person.

the need to occupy the property, before the minimum of 5 years has elapsed, in order to use it as a permanent residence for the landlord or his family members, has been expressly stated in the contract .

• That the landlord expressly specifies the reason why he needs to recover the property (for his own residence, for his family members, etc.).

The landlord must inform the tenant of this circumstance at least 2 months before the date on which the property will be needed.

If the parties do not reach another agreement, the tenant is obliged to hand over the rented property within that 2-month period.

For their part, the landlord or their family members must occupy the property within 3 months from the termination of the contract. If they fail to do so, the tenant has the following options :

– be reinstated in the use and enjoyment of the rented property for a new period of up to 5 years, respecting, in other respects, the contractual conditions existing at the time of termination, with compensation for the expenses that the eviction of the property would have entailed until the time of reoccupation; or

– be compensated in an amount equivalent to one month’s rent for each year remaining until the 5 years are completed.

In these cases it is not necessary for the landlord to have acted in bad faith , it is simply enough that he has not occupied the property within the stipulated period ( AP Cáceres 12-12-14, EDJ 259822 ).

It is possible, however, that the landlord does not occupy the property and yet there is no right to reoccupation or compensation for the tenant. These are cases in which the landlord does not occupy the property due to a cause of force majeure , that is, an event:

– to which a law has attributed this character;

– that could not have been foreseen; or

– that, even if foreseen, is inevitable.

For contracts signed between 6-6-2013 and 5-3-2019 , any type of landlord, whether a natural person or legal entity, has the right to refuse an extension, and may do so regardless of whether or not it was reflected in the contract. Likewise, it is not necessary for the landlord to specify the specific reason for refusing to do so when refusing an extension.

Within this period, for contracts signed between 19-12-2018 and 23-1-2019 , when the reform of the LAU art.9.3 carried out by RDL 21/2018 was in force , none of these three requirements were required either. The only novelty introduced then was the concept of force majeure, which now reproduces the current regulation and the adaptation of the reoccupation periods and calculation of compensation, in the event that the landlord who denied the extension does not occupy the home, to those established at that time as the minimum legal term of the contract (5 or 7 years).

Clarifications

1) The LAU does not require proof that the landlord’s need for occupation is certain at the time it occurs, but rather it is configured as an a priori mechanism for terminating the legal extension (AP Araba 26-1-01).

2) Although there is no legal concept of ” necessity “, the case law formulates it by stating that “necessity is not to be understood as something forced, obligated or imposed, but rather the opposite of superfluous and to a greater degree than what is convenient to achieve a useful end” ( TS 18-3-10, EDJ 19163 ; 22-6-11, EDJ 120445 ). In case of doubt , the landlord’s right to recover his home prevails, since it is also case law that, in cases of conflict of interests between landlord and tenant, because both need the home, the right of ownership should prevail over a lower-ranking right such as leasing. To do otherwise would be tantamount to denying the right of ownership. It has been considered that there is a need when the house is going to be occupied by a child of the landlord to become independent ( AP Baleares 4-3-15, EDJ 37392 ; 15-7-13, EDJ 148889 ).

3) Likewise, in order for the abuse of the right to be appreciated in the claim of the home, it is required that the owner’s intention is only to cause damage without it being really beneficial to exercise this right to recover it ( AP Barcelona 17-4-18, EDJ 51681 ).

4) For contracts signed between 1-1-1995 and 5-6-2013 , in addition to the reoccupation period, which is adjusted to 5 years, in accordance with the contractual terms in force at the time, the following must be taken into account:

• In order for the landlord to be able to deny the extension, this possibility must have been included in writing in the lease contract itself, with the greatest possible specificity when this cause is already foreseeable at the time of its conclusion, a requirement that is now being reinstated.

Since 24-12-2009, the need for housing refers both to the tenant himself, as well as to his relatives in the first degree of consanguinity or adoption and to the spouse in the case of a final divorce or marriage annulment sentence – although not of separation, which was included as of 6-6-2013.

• The law did not provide for a minimum notice period to deny the extension, to which the landlord is subject, although it is common for the period agreed between the parties to have been reflected in the contract.
• Compensation , in the event that the landlord does not ultimately occupy the property and the tenant opts for it, is for the entire rent for the remaining term.

Since 24-12-2009, the landlord is exempt from paying this compensation or from allowing the tenant to reoccupy when there is a cause of force majeure, now defined in the regulation itself.

For these contracts signed before 6-6-2013, doubts arise in the event of a sudden need for the landlord to occupy the property, which could not have been foreseen when the contract was signed. For some authors, if the need was not expressly foreseen at the time of signing the contract, it cannot be alleged to deny the extension ( AP Bizkaia 17-2-03, EDJ 34390 ; AP Gipuzkoa 18-3-11, EDJ 394897 ).

Tacit legal extension

(LAU art.10 )

After the first 5 or 7 years have elapsed and provided that neither party notifies the other of its intention not to continue with the lease, the contract is extended, in a manner that is now obligatory for the landlord, for annual periods up to a maximum of 3.

However, this 3-year extension is not mandatory for the tenant, who may interrupt it at the end of each of the three years if he gives one month’s notice.

The intention not to renew, after the minimum legal period of 5 or 7 years has elapsed , must be notified before expiration, with a minimum advance notice of, at least:

– 4 months, if the one who does not renew is the landlord; and

– 2 months, if the tenant is the one who does not renew.

For contracts signed between 6-6-2013 and 18-12-2018 or 24-1-2019 and 5-3-2019 , after the first 3 years and provided that neither party has notified the other that they do not want to continue with the lease, the contract is extended, in a mandatory manner for the landlord, for an additional year, so we would be talking about a duration of 3+1. With a 30-day notice period for non-renewal for both parties.

For contracts signed between 19-12-2018 and 23-1-2019 , after the first 5 years, or 7 if the landlord is a legal entity, if neither party notifies the other that they do not want to continue the lease, the contract is extended for 3 more years (5 or 7 + 3), without distinction of annuities as in the current regulation. The notification period is also 30 days.

For contracts signed between 1-1-1995 and 5-6-2013 , when the 5 years have elapsed, if neither party has expressed its desire to terminate the contract, a tacit extension of 3 more years began, each of them voluntary for the tenant, but all 3 of them obligatory for the landlord, so we would be talking about a duration of 5+3 years. These are the terms that are now restored by the current regulation.

Extraordinary extension

(LAU art.10.2 and 3 draft L 12/2023 )

For contracts signed after 26-5-2023 , once the minimum legal term of 5 or 7 years of the contract (No. 457 ) or the 3 years of tacit legal extension (No. 470 ), if applicable, has ended, the tenant may request an extraordinary extension in which the same conditions established for the initial contract will be maintained. For these purposes, a distinction must be made based on the location of the home.

Clarifications

Without prejudice to the fact that the parties may agree to adapt their contracts to this regulation, those entered into prior to 26-5-2023 must continue to be governed by the legal regime applicable to them ( L 12/2023 trans.disp.4ª ).

last update

Constitutionality of the reform of the LAU through the Housing Law

(Actum 6/24, June 2024)

The amendments included in the LAU by the Housing Law, regarding the extension of contracts and the limitation of rent in areas with a tense residential market, are declared to be in accordance with the Constitution.

 TCo 79/2024, BOE 24-6-24

MY No. 9483 , 9506

MARRI No. 475 , 485

The Constitutional Court has partially upheld the appeal against the Housing Act, specifically declaring the constitutionality of the amendments that this law introduced to the Urban Leasing Act.

The purpose of the amendment to the articles of the Urban Leasing Law is to implement price containment measures:

• Creation of an extraordinary extension for contracts once the mandatory extension period or the tacit extension period has ended, both in areas with tension and in those without tension ( LAU art.10.2 and 3 ).
• Rent limitations for homes located in areas with a stressed residential market ( LAU art.17.6 and 7 and transitional provision 1st ).

The appellants argue that this reform is not limited to civil regulation, but affects the institutional aspect of property and housing rights, also providing a finished version of these, which invades the autonomous powers. Specifically:

– when the concepts of large holder, stressed residential market area or state system of reference price indices included in the Housing Law are only referred to in order to regulate the extensions of the contract; and

– that the approval of the state system of reference price indices by ministerial resolution expressly provides for a guarantee of technical coordination and that the role of social services be specified in detail.

However, the Constitutional Court considers this reform to be in accordance with the Constitution as regards the distribution of powers that it establishes, since it is incorporated within the system established by Constitution art.149.1.8 and, as regards the system of approval of the reference price index, in Constitution art.149.1 :

• Not everything regulated by civil norms belongs to Civil Law, nor are civil institutions contained exclusively in civil laws: the right to private property that the Constitution recognizes and protects has an institutional aspect, precisely derived from the social function that each type of property on which it is exercised is called to fulfill. In the field of housing, the regulation of the institutional dimension of the right to private property, given that it cannot be separated from the regulation of the specific general interests that justify it, is the responsibility of the holder of the sectoral competence to protect such interests and not of the holder in matters of civil legislation in accordance with the Constitution art.149.1.8 ( TCo 16/2018 ).
• Const art.149.1.8 reserves to the State the subject matter of ” bases of contractual obligations “, which includes the rules that directly affect the economic organization, the relations between parties and the internal economy of contracts ( TCo 132/2019 ; 37/2022 ).
• In relation to the aspects of the rental contract modified by L 12/2023 , the State is also competent to legally establish the freedom of agreements in the establishment of the rent of the housing rental contract , as well as to, where appropriate, determine the necessary modulations to adjust the operation of the real estate market in accordance with the right to housing of the Const art. 47 or other constitutional precepts, particularly in order to protect interests that are considered to be in need of special protection – specifically, those of tenants in view of the situation of the real estate market – ( TCo 37/2022 ).

The determination of the duration and extensions of the contract is the responsibility of the state legislator in accordance with Constitution art. 149.1 , since, like the regulation of the rules for determining the rent, they are essential aspects of the obligatory regime of housing rental contracts which, as bases of contractual obligations, must be common and, therefore, established by the State.

The fact that the application of these measures depends on whether the tenant is a large holder or whether the property is located in a stressed area, exclusively in the terms of Law 12/2023 , without considering possible similar autonomous figures, does not affect the powers of the autonomous communities, which can continue to create analogous figures, to which these will not be applicable: the state legislator does not impose them on the autonomous communities.

• The fact that the reference index system is approved by territorial areas is not a civil nature rule, like the rest of the LAU, but this does not mean that it is unconstitutional, given its connection with the right to housing and its fit in with Constitution art. 149.1.13 , the basis of RDL 7/2019 when creating the state reference index system.

This provision does not affect the exercise of autonomous powers: the fact that the systems, data and methodologies developed by the autonomous communities must be considered and that technical coordination must therefore be ensured does not prevent the autonomous communities from defining their own reference index for the exercise of their powers and for the purposes of designing their own public housing policies and programmes.

TCo 79/2024, BOE 24-6-24

Residential market area stressed

(L 12/2023 art.3.k, 18, 19 and additional provisions 1st and 3rd ; LAU art.10.3 redacc L 12/2023)

In those territorial areas where there is a particular risk that the supply of affordable housing is insufficient for the population, the Administrations can declare areas with a stressed residential market in order to direct public actions in the area of housing in accordance with these needs.

Among other things, the declaration requires the preparation of a report justifying it when one of these circumstances occurs:

– the average burden of the cost of the mortgage or rent on the personal or household budget, plus basic expenses and supplies, exceeds 30% of the average income or the average household income; or

– that the purchase or rental price of the home has experienced, in the previous 5 years, a cumulative growth percentage of at least 3% above the cumulative growth of the CPI of the corresponding autonomous community.

As long as the declaration of a stressed residential market area is in force, the contract can be extended for annual periods up to a maximum period of 3 more years.

This extension must be accepted by the landlord – regardless of whether or not he is a large holder – unless:

– the parties had agreed on other conditions in the contract;

– a new contract has been signed in which the corresponding income limitations apply ( LAU art.17.6 and 7 redacc L 12/2023); or

– the landlord, within the legal deadlines, has communicated that he needs to occupy the property to use it as a permanent residence ( LAU art.9.3 ).

Clarifications

Regarding the consideration of large holders in areas with a stressed residential market, see No. 429 .

Outside of stressed residential market areas

(LAU art.10.2 draft L 12/2023)

The extraordinary extension may be for a maximum of one year. For these purposes:

• The tenant must prove that he or she is in a situation of economic or social vulnerability through a report or certificate from municipal social services issued in the last year.
• Only if the landlord is a large holder and a new contract has not been signed between the parties, is he obligatorily required to accept the request.

Successive extensions and tacit renewal

While tacit renewal leads to a new lease contract by presumed consent of both parties if, at the end of the contract, the tenant continues to enjoy the property without opposition from the landlord, the extension of a contract implies its subsistence with the same conditions. While tacit renewal establishes the regime of the contract once it has concluded, the extension is raised before the expiration date, which is in force ( AP Madrid 29-4-08, EDJ 108271 ; AP Cuenca 27-11-03, EDJ 206066 ).

The question currently arises as to what happens once the tacit legal extension period has elapsed, when the parties do not express their desire to terminate the contract:

successive extensions is opened , for the same period as the tacit legal extension applicable to each contract:

– from 6-3-2019, for 1 year [(5 or 7 + 1 + 1 + 1) + . . . ];

– for contracts signed between 6-6-2013 and 18-12-2018 or between 24-1-2019 and 5-3-2019, of 1 year duration [(3 + 1) + 1 + 1 + 1 +…]; and

– if the contract was signed between 19-12-2018 and 23-1-2019, for a duration of 3 years [(5 or 7 + 3) + 3 + 3 + 3 +…].

• For another part of the doctrine, such a succession of extensions does not occur, but rather the contract enters into tacit renewal , for a stated period in accordance with that set for the payment of the rent (No. 479 ).

However, this doubt does not arise in contracts signed between 1-1-1995 and 5-6-2013 , in which, after the eighth year of leasing, there is no longer a contract, so the mechanism of tacit renewal is applicable , that is, if the landlord and tenant act as if the contract continued to exist for 15 days from the end of the lease term, it is understood that a new contract is born. To do so, the tenant must continue paying the rent and the landlord must allow the tenant to occupy the property, implying that, tacitly – that is, without saying so expressly – they want to continue in a lease.

Regarding the duration of the tacit renewal, the most widespread opinion, which also follows the majority jurisprudence of the provincial courts and has been endorsed by the Supreme Court, is to resort to that provided for in CC art.1581 : by years when an annual rent has been set, by months, when it is monthly, or by days when it is daily ( TS 26-9-18, EDJ 588456 ; 12-5-17, EDJ 65116 ).

Economic obligations/ The Rent

(LAU art.17 to 19 )

The initial rent is freely agreed between the parties. Currently there are no limitations in this regard, unless the property is located in an area with a tense residential market (no. 485 ), nor is it possible to discuss it once it has been agreed ( LAU art.17.1 ).

The rent must be determined as to its kind, but may be indeterminate as to the amount, provided that it is possible to fix it without the need for a new agreement.

payment in kind is not excluded , a stipulation that is only limited by good faith, custom or local usage.

The existence of rent is an essential element of the lease contract, which must be established with acceptable specificity and fixity, otherwise we would be faced with another type of contract ( TS 9-2-93, EDJ 1169 ). However, nothing prevents the parties from agreeing on a period of lack of rent, due to moving, adaptation works or other reasons.

Clarifications

1) The possibility of establishing a system of reference indexes for the rental price of housing, as already provided for in RDL 7/2019 and finally made by the Law for the Right to Housing, since 26-5-2023, has been endorsed by the Constitutional Court , considering that it includes guiding criteria that favor the regulation of the housing market ( TCo 28-1-20 ).

2) Regarding the reduction and moratorium on payment as measures adopted during the health crisis caused by the COVID-19 pandemic ( RDL 11/2020 art.3, 4, 7 and 8 ), see no. 504 s. Memento Arrendamiento de Inmuebles 2022-2023.

3) With effect from 22-9-2020, by applying the reference index for housing rental prices, Catalonia has sought to regulate the rent price in housing lease contracts, when it is the tenant’s habitual and permanent residence and it is located in an area declared with a “tense housing market” ( Catalonia Law 11/2020 art.2 s. ). However, this entire regime, called ” rent containment and moderation ” in housing lease contracts ( Catalonia Law 11/2020 art.6 to 14 ), has been annulled as it was declared unconstitutional for violating state jurisdiction over the bases of contractual obligations ( TCo 37/2022 ).

For its part, with effect from 29-7-2022, Navarra regulated the declaration of areas with a tense residential market and the containment of rental prices for homes located therein, in terms similar to how the Law on the Right to Housing does now ( LF Navarra 10/2010 art.97 and 98 ).

4) Since there is no rent, the so-called ad meliorem lease (No. 143 ) does not constitute a lease of a dwelling in the sense protected by the LAU; nor does it constitute one in which the occupant of the dwelling assumes only the payment of taxes and utilities ( AP Alicante 16-10-07, EDJ 233940 ).

5) Regarding the taxation of income in the landlord’s personal income tax, see no. 7150 ff.; regarding the deductions applicable in the tenant’s personal income tax, see no. 8800 ff.

Limiting rent in areas with a stressed residential market

(LAU art.17.6 and 7 and disp.trans.7ª draft L 12/2023 ; L 12/2023 disp.adic.1ª.3 ; SE Housing and Urban Agenda Resol 14-3-24)

In new housing lease contracts, signed after 26-5-2023, in which the property is located in an area with a stressed residential market, the following two mechanisms are established to limit the amount of rent:

• Reference to a previous contract : to agree on the initial rent of the contract, the rent of another previous contract that had been in force for that same property in the last 5 years must be taken into account, so that:

– the agreed rent cannot exceed that of the previous contract, once the annual update clause has been applied; and

– new conditions cannot be established that establish the impact on the tenant of fees or expenses that were not included in the previous contract.

However, in the following cases, it would be possible to increase the rent above what would correspond to the annual update, although only up to a maximum of 10%:

rehabilitation works have been carried out ( RIRPF art.41.1 ), to improve energy efficiency , which represent a saving of 30% in non-renewable primary energy or improvement of accessibility ;

– when the parties have established a contract term of 10 or more years; or

– a right of extension is established that the tenant may voluntarily exercise, allowing him to extend the contract under the same terms and conditions for a period of 10 years or more.

• Reference price index system : this system provided for in the Housing Law has been finally approved with effect from 16-3-2024, to determine the initial rent of rental contracts signed from 26-5-2023, acting as a maximum limit in two cases ( L 12/2023 add.disp.1ª ; LAU art.17.7 and trans.disp.7ª ; Resol SE Housing and Urban Agenda 14-3-24 ):

– when the landlord is a large holder or, if not, the autonomous community decides in its declaration of a stressed area to apply this same limit; or

– when there has not been another contract in force in the last 5 years, provided that this is reflected in the declaration of a stressed residential market.

A range of maximum and minimum prices is offered, so that, in areas with a tense residential market, the highest value will mark the limit of the rental price and, for the rest, it serves as a reference, as a guide, for setting the price in new contracts.

The maximum income limit must be set in accordance with the online application accessed through the Ministry of Housing and Urban Agenda’s Internet portal: https://serpavi.mivau.gob.es/

Clarifications

So far, only Catalonia has made use of this procedure, publishing its list of affected municipalities and the conditions applicable in areas of stressed residential market ( Resol SE Housing and Urban Agenda 14-3-24 ; Resol TER/800/2024 ):

– the declaration will be valid until 16-3-2027;

– a large holder is considered to be a natural person or legal entity that owns five or more urban residential properties located in the area; and

– The rent limit applies to landlords who are not large holders when there is no prior contract in the last 5 years.

Last update.-  Constitutionality of the reform of the LAU through the Housing Law

(Actum 6/24, June 2024)

The amendments included in the LAU by the Housing Law, regarding the extension of contracts and the limitation of rent in areas with a tense residential market, are declared to be in accordance with the Constitution.

 TCo 79/2024, BOE 24-6-24

MY No. 9483 , 9506

MARRI No. 475 , 485

The Constitutional Court has partially upheld the appeal against the Housing Act, specifically declaring the constitutionality of the amendments that this law introduced to the Urban Leasing Act.

The purpose of the amendment to the articles of the Urban Leasing Law is to implement price containment measures:

• Creation of an extraordinary extension for contracts once the mandatory extension period or the tacit extension period has ended, both in areas with tension and in those without tension ( LAU art.10.2 and 3 ).
• Rent limitations for homes located in areas with a stressed residential market ( LAU art.17.6 and 7 and transitional provision 1st ).

The appellants argue that this reform is not limited to civil regulation, but affects the institutional aspect of property and housing rights, also providing a finished version of these, which invades the autonomous powers. Specifically:

– when the concepts of large holder, stressed residential market area or state system of reference price indices included in the Housing Law are only referred to in order to regulate the extensions of the contract; and

– that the approval of the state system of reference price indices by ministerial resolution expressly provides for a guarantee of technical coordination and that the role of social services be specified in detail.

However, the Constitutional Court considers this reform to be in accordance with the Constitution as regards the distribution of powers that it establishes, since it is incorporated within the system established by Constitution art.149.1.8 and, as regards the system of approval of the reference price index, in Constitution art.149.1 :

• Not everything regulated by civil norms belongs to Civil Law, nor are civil institutions contained exclusively in civil laws: the right to private property that the Constitution recognizes and protects has an institutional aspect, precisely derived from the social function that each type of property on which it is exercised is called to fulfill. In the field of housing, the regulation of the institutional dimension of the right to private property, given that it cannot be separated from the regulation of the specific general interests that justify it, is the responsibility of the holder of the sectoral competence to protect such interests and not of the holder in matters of civil legislation in accordance with the Constitution art.149.1.8 ( TCo 16/2018 ).
• Const art.149.1.8 reserves to the State the subject matter of ” bases of contractual obligations “, which includes the rules that directly affect the economic organization, the relations between parties and the internal economy of contracts ( TCo 132/2019 ; 37/2022 ).
• In relation to the aspects of the rental contract modified by L 12/2023 , the State is also competent to legally establish the freedom of agreements in the establishment of the rent of the housing rental contract , as well as to, where appropriate, determine the necessary modulations to adjust the operation of the real estate market in accordance with the right to housing of the Const art. 47 or other constitutional precepts , particularly in order to protect interests that are considered to be in need of special protection – specifically, those of tenants in view of the situation of the real estate market – ( TCo 37/2022 ).

The determination of the duration and extensions of the contract is the responsibility of the state legislator in accordance with Constitution art. 149.1 , since, like the regulation of the rules for determining the rent, they are essential aspects of the obligatory regime of housing rental contracts which, as bases of contractual obligations, must be common and, therefore, established by the State.

The fact that the application of these measures depends on whether the tenant is a large holder or whether the property is located in a stressed area, exclusively in the terms of Law 12/2023 , without considering possible similar autonomous figures, does not affect the powers of the autonomous communities, which can continue to create analogous figures, to which these will not be applicable: the state legislator does not impose them on the autonomous communities.

• The fact that the reference index system is approved by territorial areas is not a civil nature rule, like the rest of the LAU, but this does not mean that it is unconstitutional, given its connection with the right to housing and its fit in with Const art.149.1.13 , the basis of RDL 7/2019 when creating the state reference index system.

This provision does not affect the exercise of autonomous powers: the fact that the systems, data and methodologies developed by the autonomous communities must be considered and that technical coordination must therefore be ensured does not prevent the autonomous communities from defining their own reference index for the exercise of their powers and for the purposes of designing their own public housing policies and programmes.

TCo 79/2024, BOE 24-6-24

Payment

(LAU art.17.2, 3 -redacc L 12/2023- and 4)

Unless otherwise agreed, rent is paid monthly and must be made within the first 7 days of the current month and not the month following the expired month.

It is possible to agree on the frequency of payment and the time at which it is to be made, but the landlord cannot require the advance payment of more than one month’s rent, even when quarterly or annual payment has been established, apart from the monthly deposit (nº 512 ). If included, it would be a void clause (nº 440 ).

This limitation does not prevent any other additional guarantee from being agreed upon, other than the advance payment of more than one month’s payment (No. 545 ).

For contracts signed after 26-5-2023 , the rent must be paid electronically and, only in exceptional cases, when one of the parties does not have access to the same or does not have a bank account, can it be paid in cash at the rented property. The party that needs to make the payment in cash must request it.

For contracts prior to this date , payment is made at the place and by the procedure agreed by the parties and, failing that, in cash and in the rented property. Any form of payment that provides proof of its existence is valid: 30-day bills, payment into the landlord’s account, etc. The rule leaves open the recognition of future means of payment and their accreditation.

Clarifications

1) The obligation to pay the rent remains in effect until the tenant vacates the property, even if the lease agreement has been terminated ( AP Granada 24-4-01, EDJ 14875 ; AP Tarragona 5-5-99, EDJ 5586 ).

2) The tenant cannot justify the non-payment of rents by the failure of the previous owners to comply with the rules governing the rights of first refusal and redemption , as long as the rental situation is in force. Whatever the circumstances affecting the property, the tenant is obliged to pay them ( AP Palencia 26-6-02, EDJ 40455 ).

3) The fact that there is a final judgment declaring a credit of the tenant against the landlord does not alter the agreed form of payment of the rent, nor does it allow the owner to impose on the tenant that the payment of the amount to which she was sentenced be deducted from the amount of the rents as they accrue ( TS 7-3-22, EDJ 522198 ).

Receipt

(LAU art.17.4)

The landlord is obliged to provide the tenant with a receipt for payment, unless it has been agreed that this will be done through procedures that prove the tenant’s effective fulfillment of the payment obligation, e.g. a bank transfer.

The receipt, or supporting document that replaces it, must contain , separately, the amounts paid for the different concepts that make up the total payment and, specifically, the current rent.

If the landlord does not provide the receipt, all expenses incurred by the tenant to record the payment are his responsibility.

The tenant cannot withhold payment of the rent until the receipt is delivered to him, but must pay or deposit it. Nor can he deduct from the rent payment the expenses incurred by the reliable proof of payment or by the deposit, he can only proceed against the landlord for said amount.

Replacing rent with works

(LAU art.17.5)

The parties may freely agree that, for a certain period, the obligation to pay rent will be replaced, in whole or in part, by the tenant’s commitment to renovate or rehabilitate the property under the agreed terms and conditions.

If the parties have agreed to replace the payment of rent with the execution of works, the tenant, at the end of the contract, cannot ask for any compensation for the cost of the works, since this would be equivalent to asking for the return of the rent that he has been paying.

In these cases, it is essential to define the works to be carried out, since these are the consideration of the tenant in the lease contract, that is, the “rent” that must be paid, even if in kind. Therefore, the tenant’s obligation must be understood as an obligation of result: he has the obligation to carry out all the actions and assume all the costs necessary to achieve the agreed result.

Failure by the tenant to comply with this agreement may result in termination of the contract and eviction .

Update/Actualisation of the rent

(LAU art.18)

During the term of the contract, the rent can only be updated by the landlord or the tenant in each year of the contract and under the terms agreed upon. However, in the absence of an express agreement , no revision is applicable.

Although the parties are free to establish one or another system, this must entail a true update, so that the rent is revised both upwards and downwards. Otherwise, what would have been agreed is an annual increase in the rent. Clauses that leave both the increase and the amount of the rent to the sole discretion of the landlord are not possible , because the fulfillment of the contract would be left to the will of only one of the parties ( CC art.1256 ).

If the parties agree on a review mechanism that does not detail the reference index or methodology , the income will be reviewed, for each annuity, by reference to the annual variation of the “Competitiveness Guarantee Index” on the date of each review.

three requirements must be met :

– that the update has been provided for in the contract;

– the variation of the applicable index during the previous 12 months; and

– written notification to the other party, indicating the percentage of variation and, if required by either party, certification by the National Statistics Institute.

Payment of the updated rent is only due from the month following notification.

Rent adjustment is not mandatory, but either party may demand it. Early waiver of the adjustment is not possible because in the hypothetical case of a decrease in the applicable index, this would cause harm to the tenant.

In the event that the update is not carried out, it is understood that the update is waived, but not the percentage variation, which accumulates until, where applicable, the moment of its effective exercise ( AP Valencia 8-3-04, EDJ 196710 ).

Clarifications

1) The notification made in the receipt of the previous monthly payment, by means of a note, is valid.

2) It is common for the parties to exempt each other from the obligation to attach an INE certification to the income update notification in the contract itself.

The competitiveness guarantee index is the system that has been applied, in the absence of other agreements, since 1-4-2015 . For contracts signed between 6-6-2013 and 31-3-2015 , the regime applicable to the updating of the rent is the one currently in force, although with the following differences:

– the main one is that it is possible to carry out the rent update, even if it has not been expressly agreed in the contract; and, on the other hand,

– In the event that the parties do not indicate a reference index, the CPI is used instead of the Competitiveness Guarantee Index.

For contracts signed between 1-1-1995 and 6-6-2013 , during the first 5 years of the contract, the rent could only be updated by reference to the CPI, no other agreements between the parties are possible. From the sixth year onwards, any type of agreement in this regard is possible and, only in the absence of such, the CPI continues to apply for the update.

Furthermore, unlike the current regime, the rent can be updated whether or not it is expressly provided for in the contract.

Calculating the update

The calculation of the update by reference to an index is carried out by applying to the income corresponding to the previous annuity the percentage variation experienced by the index in the period of the 12 months immediately preceding the date of each update.

For the first update, the reference month is the one corresponding to the last index published on the date on which the contract was signed, and in subsequent updates, the one corresponding to the last one applied.

When the rate of change of the Competitiveness Guarantee Index is below 0%, this value is taken as a reference, which is equivalent to no revision; when the rate of change exceeds 2% (the European Central Bank’s medium-term annual inflation target), this value is taken as a reference. In other words, the rate of change will always be between 0 and 2%.

However, for all contracts signed since 6-3-2019 , although the parties are equally free to agree on one or another form of update, the annual increase in rent cannot be higher than that which would result from applying the CPI as a revision mechanism.

This same provision is established for contracts signed between 19-12-2018 and 23-1-2019 , subject to the minimum legal term of 5 or 7 years (No. 463 ), but only if they are considered ” reduced income “, that is, of an amount lower than that established as the maximum income to be able to access rental assistance in the current State Housing Plan (No. 4588 ).

Clarifications

Data relating to the variation in indices can be consulted at www.ine.es.

Limitation on rent update

(LAU disp.adic.11th draft L 12/2023 ; RDL 6/2022 art.46 draft L 12/2023)

For the annual update of the rent of housing contracts, the National Institute of Statistics is required to publish the Reference Index for the annual update of the rent , which must serve as a limit to avoid disproportionate increases in the same.

Since the quantitative increase in income may not exceed, in any case, that which would result from updating it according to this index, a double limit is established on the one already existing in the LAU art.18, which already puts a ceiling on this update -whether made by reference to the Competitiveness Guarantee Index or to the Consumer Price Index itself- in the percentage variation of the CPI.

On the other hand, in recent years a series of extraordinary and temporary limitations have been established for the updating of income:

• Thus, for contracts that must be updated between 1-1-2024 and 31-12-2024 , a rent update has been established, so that the parties can negotiate the increase of the same, within the following conditions ( RDL 6/2022 art.46 redacc L 12/2023).

– if the landlord is a large holder, the increase in rent will be the result of the new agreement between the parties, but may not exceed 3%, whether or not they reach such an agreement;

– if the landlord is not a large holder , the rent increase will be the one resulting from the new agreement between the parties. In the absence of this new agreement between the parties, the rent increase to be applied may not exceed 3%.

• Likewise, for contracts that had to be updated between 29-3-2022 and 31-12-2023, the parties were able to negotiate the increase in rent to be applied, under the following conditions ( RDL 6/2022 art.46 redacc RDL 20/2022):

– if the landlord was a large holder , whether or not there was an agreement between the parties, the increase in rent could not exceed the result of applying the annual variation of the Competitiveness Guarantee Index as of the date of said update; and

– If the landlord was not a large holder , the amount agreed by the parties would be valid and, if there was no agreement in this regard, the increase in rent could not exceed the result of applying the annual variation of the Competitiveness Guarantee Index as of the date of said update.

In practice, this meant that income could increase by a maximum of 2% compared to the previous year, since when the rate of change of this index exceeded the European Central Bank’s medium-term annual inflation target (2%), this value had to be taken as a reference.

Clarifications

The publication of the reference index for the annual update of income, separate and independent from the Reference Price Index System (No. 485 ), is still pending at the closing date of this edition of Memento.

Example

Let us assume a lease agreement signed on 21-1-2023, valid from 1-2-2023 and a rent of €1,150 per month, in which the parties agree to the annual update in accordance with the CPI:

• The last CPI published on 21-1-2023, when formalizing the contract, was the one corresponding to December 2022.
• The monthly rent of €1,150 is adjustable from 1-2-2024, according to the variation in the CPI between December 2022 and December 2023.
• The variation rate between the 2 reference months was 3.1%, so, with effect from 1-2-2024, the monthly rent for this rental would be €1,185.65

– 1,150 × 0.031 = €35.65

– 1,150 + 36.65 = €1,185.65

• However, taking into account the extraordinary maximum limit of 3% established for the update of income that must be carried out during the year 2024, the updated income would be €1,184.5.

Elevation for improvements

(LAU art.19)

Regarding the possibility of the landlord raising the rent based on the improvements he has made to the rented property, two situations may arise :

a) When there is an agreement between the landlord and tenant to carry out improvement works, these may be carried out at any time from the start of the contract and give the right to increase the rent. Without prejudice to the tenant’s right to be compensated for the expenses incurred by the works or to have the rent reduced while they last in proportion to the part of the property that he cannot, where appropriate, use (No. 503 ). This does not imply the interruption of the mandatory or tacit extension period or a new start to the calculation of such periods. This possibility applies to contracts signed since 6-3-2019 and, under the same conditions, to those signed between 19-12-2018 and 23-1-2019 .

b) In the case of improvement works carried out at the will of the landlord , which cannot reasonably be deferred until the end of the lease, the landlord has the right to increase the annual rent if the following conditions are met :

– the minimum legal period has elapsed since the conclusion of the contract (No. 463 ). Improvement works carried out by the sole will of the landlord before this period do not give the right to increase the rent, even after this minimum legal period has elapsed;

– the tenant has been notified in writing; and

– that there is no agreement to the contrary. It is not required that the agreement to the contrary be made in writing to be valid, so it can be verbal. In any case, it is up to the tenant to prove the existence of the agreement, if the landlord wants to make use of the possibility of raising it.

In this case, the term improvement must be understood in the strict sense, so the rent can only be raised when the conditions of the home have been improved (no. 590 ) and these improvements are not due to necessary repairs (no. 563 ), since the landlord is obliged to make all necessary repairs to keep the home in habitable conditions according to the agreed use, without this entailing the right to raise the rent.

The rent increase occurs from the month following the month in which, once the works have been completed, the landlord notifies the tenant in writing of the amount of the works. The notification must:

– detail the calculations leading to its determination; and

– provide copies of the documents showing the cost of the works carried out.

The tenant may refuse to pay the rent increase for the improvements made until the required documents are provided.

Amount of the increase

 The annual increase in income results from applying the legal interest rate increased by 3% to the capital invested in the works, taking into account:

– the amount of public subsidies obtained for the works must be deducted from the invested capital, where applicable;

– the interest rate is the one in force at the time the works are completed;

– the increase in rent cannot be greater than 20% of what was previously paid.

In the case of works that affect several properties , a distinction is made based on whether or not they are under a horizontal property regime:

• When the improvement affects several properties in a building under a horizontal property regime , the landlord must proportionally distribute the invested capital among all of them according to the participation quotas corresponding to each one. The percentage corresponding to each property, according to its participation in the horizontal property, must not exceed the limit of 20% of the current rent for each of the improved properties.
• When buildings are not under a horizontal property regime , the invested capital is distributed proportionally between the affected properties by agreement between the landlord and tenants. In the absence of an agreement, it is distributed proportionally based on the surface area of the leased property.

Clarifications

It may be understood that when we speak only of surface area , we are referring to the useful surface area, not the constructed surface area, but, ultimately, this distinction is not significant, because the cost of the improvement is distributed among fewer square metres and each one corresponds to an amount. Nor does the Law distinguish between square metres of housing and commercial premises, when the building is made up of both.

Reduction for works

(LAU art.21.2 and 22.3)

For the reduction of rent due to works to take effect, it is necessary for the tenant to be deprived of part of the property, and it is not sufficient for him to simply endure the inconvenience and discomfort that any work may entail.

Depending on whether the works are for conservation or improvement, the reduction in rent operates in different ways:

• Conservation works entitle the tenant to a reduction in rent if:

– last more than 20 days; and

– they deprive him of part of the house.

These works do not entitle the tenant to compensation for the costs incurred.

• When it comes to improvement works , the rent is reduced from the same day that these begin and the expenses caused to the tenant are compensated.

Clarifications

If the work is for conservation, the tenant is obliged to bear it, but if it is for improvement , he may withdraw from the contract when he is informed that the work is going to be carried out (No. 595 ).

Bail and accessory guarantees

(LAU art.36 )

Bail

(LAU art.36.1 to 4 and 6)

At the time of signing the contract, the requirement and provision of a deposit is mandatory. This is an irregular pledge, a guarantee contract accessory to the main obligation.

The provision of this guarantee has a dual aspect, being in fact two perfectly separable obligations :

– civilly, the tenant owes this amount to the landlord, even if it has not been agreed; and

– Administratively, the landlord must deposit the security deposit in the corresponding public body if required by the autonomous community in which the property is located (No. 517 ).

The deposit must be paid in cash , no other form of substitute guarantee, whether real or personal, is accepted, and in an amount equivalent to one month’s rent.

One of the provisions of the LAU that govern the contract in an imperative manner is :

– it is non-waivable for the landlord, who is in any case obliged to demand it; and

– the tenant may not be required to pay more than one month’s rent as a deposit.

Failure to comply with the obligation to demand or deposit the deposit may be punishable by a fine for the landlord, who, in turn, may terminate the contract by law for failure to pay the amount of the deposit or its update.

In the event of assignment of the contract by the lessee, a new deposit is not required as the assigned lease contract has not undergone any alteration, although the assignee must deliver to the assignor the amount corresponding to the amount of the deposit that the latter had delivered to the lessor at the time of signing the contract, together with, where applicable, any updates.

Clarifications

1) The regulation of the deposit is part of the common provisions of the LAU applicable both to the rental of housing and to rentals for use other than housing (nº 1000 ), and in the latter case a deposit must be posted for an amount equivalent to 2 months’ rent. In this way, it is not possible to understand that the landlord has tacitly waived the tenant’s obligation to post a deposit, so that if the tenant does not comply with this obligation, despite being required, the eviction action will prosper ( AP Barcelona 14-2-08, EDJ 42461 ). However, contrary to this criterion, it has also been understood that, despite the obligatory nature of both its “requirement” and its “provision”, nothing seems to oppose the possibility of waiver between the parties, given that the limits of private autonomy are not violated ( AP Barcelona 3-3-10, EDJ 103850 ).

2) The following are exempt from the obligation to provide security when the rent must be paid from their respective budgets ( LAU art.36.6 ):

– the General Administration of the State;

– the administrations of the autonomous communities;

– the entities that make up the local Administration;

– autonomous bodies, public business entities and other public entities linked to or dependent on them; and

– the mutual societies collaborating with Social Security in their public function of collaboration in the management of Social Security, as well as their joint centres and entities.

Update of the deposit

(LAU art.36.2 and 3)

During the minimum legal term of the contract, the deposit is not updated. After this period, the update is voluntary: each time the lease is extended, the parties can request that it be increased or decreased until it equals one month’s rent in force at that time.

When the duration of the lease contract exceeds the minimum legal term, the updating of the deposit will be governed by what is stipulated by the parties in the contract. In the absence of a specific agreement, what has been agreed on updating the rent also applies to updating the deposit.

Clarifications

1) Although the updating of the deposit is discretionary for the parties, the autonomous communities usually require the updating of the amount deposited for this purpose in parallel with the updating of the income.

2) The minimum legal period , during which the deposit is not updated, varies depending on the regime applicable to the contract (No. 457 ).

Deposit

(LAU add.prov.3rd)

The autonomous communities may establish the obligation that the amount of the deposit be deposited in the corresponding body at the disposal of the autonomous administration.

Once the landlord notifies this body of the termination of the lease , the latter must return the deposit, in principle without accrual of interest, unless more than one month has passed since the end of the contract, in which case the legal interest corresponding at that time will accrue.

Currently, most autonomous communities have their own regulations on this matter and in some the obligation to deposit a security deposit has been eliminated.

In any case, to promote transparency and the exchange of information between the different Public Administrations, regional regulations must require that the landlord provide, as a minimum:

• Data identifying the parties , both the landlord and the tenant, including their addresses for notification purposes.
• An identification of the property :

– year of construction;

– year and type of reform, if applicable;

– built area for private use, by uses;

– postal address;

– cadastral reference; and

– energy rating.

• Characteristics of the lease agreement :

– income and update system;

– bail and, where applicable, additional guarantees;

– lease term;

– method of payment for supplies; and

– if rented with furniture.

Below is a list of regional regulations governing the obligation to deposit a bond or, where appropriate, its elimination, as well as the body responsible for this management.

(*) Decree 11-3-1949 , regulating the so-called ” guarantee paper ” was repealed by the LAU itself, however, it must be considered still in force in those autonomous communities that do not yet have their own regulation on the deposit of guarantees ( LAU disp.derog.unica ). Currently only the Autonomous City of Ceuta lacks its own regulation.

Restitution to the tenant

(LAU art.36.4)

The balance of the cash deposit must be returned to the tenant at the end of the lease, since, as it is a guarantee contract that is ancillary to the lease, the principle of extinction of the pledge must apply together with the guaranteed obligation. However, if there are outstanding obligations (damages, rent, amount of supplies, etc.), the landlord may retain this amount, returning only the difference between what was delivered and the amount in which the liability attributable to the tenant is calculated ( AP Barcelona 3-3-10, EDJ 103850 ):

– for non-payment of rent, utilities, garbage fees and other amounts that the tenant has assumed;

– for the repair of damage caused to the property, except for elements that are likely to deteriorate over time and are not attributable to improper use by the tenant.

The burden of proof of the reason why all or part of the deposit is not returned once the contract has been terminated falls on the party who alleges a reason for retaining it, on the landlord, who must justify all amounts retained ( AP Huesca 30-12-11, EDJ 315958 ).

The landlord is obliged, unless there are outstanding obligations referred to above, to return the deposit immediately upon termination of the lease. If one month has passed since the tenant handed over the keys and the deposit has not been returned, legal interest will begin to accrue.

It could be thought that this regulation of late payment actually derives from the obligation of administrative deposit that the landlord has (No. 517 ), so that he is not burdened with the obligation to pay interest during the period in which the administration does not pay them either because it is within the legally established period for the return, but, in no case does this imply that the obligation of the landlord to return the deposit to the tenant can also be delayed by one month without there being a cause for it.

There are therefore two independent legal relationships in relation to the rental deposit:

– a civil one, between landlord and tenant; and

– another of an administrative nature, between the landlord and the autonomous depositary body.

Clarifications

1) In practice, it is useful to sign a lease termination document that sets out the parties’ powers regarding the deposit. A model for this can be found in no . 12070 s.

2) Once the contract has been terminated and there is no record of any damage to the rented property to which the deposit would have to be applied, the legal remedy may be to offset the tenant’s obligation to pay rent and other items against the landlord’s obligation to return the deposit, thereby avoiding unnecessary duplication of monetary claims ( AP Baleares 11-5-10, EDJ 320472 ). The deposit may not be offset against normal repair costs that the landlord must incur before entering into a new lease and which are inherent to the maintenance of the property ( AP Sevilla 13-10-05, EDJ 255501 ).

3) The possibility of retaining the amount of the deposit in the event that the tenant returns the property with the walls painted a colour other than white or with holes, making the tenant bear the costs of restoring it to its initial state, is a void clause that must be considered abusive ( LGDCU art.82.4.byf ) because it disproportionately limits the rights of the tenant, who is forced to keep the property that colour throughout the lease or return it freshly painted, in an improved state and without the deterioration due to ordinary use, which the landlord is responsible for assuming once the lease has ended. It exceeds the obligations imposed on the tenant by law, that is, minor repairs resulting from wear and tear due to ordinary use ( LAU art.21.4 ); and the return of housing in the condition in which it was received, except for normal deterioration due to the passage of time – CC art.1561 – ( JPI Barcelona no. 31 9-1-23, EDJ 706936 ).

Other additional guarantees

(LAU art.36.5)

In addition to the actual deposit, the tenant may be asked to provide additional guarantees, which are voluntary for the landlord and can be used to cover damage to the property, non-payment of rent or any other liability of the tenant arising from the contract.

For residential leases signed from 6-3-2019 and between 19-12-2018 and 23-1-2019, the duration of which is subject to the minimum legal term of 5 or 7 years, the value of this additional guarantee cannot exceed two months’ rent.

While the bail must always be provided in cash, the content of the additional guarantees is at the discretion of the parties. They may consist of a pledge, personal guarantees from a third party, such as a bank or private guarantee, mortgages or cash deposits.

General expenses and individual services

Overheads

(LAU art.20 draft L 12/2023)

General expenses are those necessary for the maintenance of the property and its services, as well as those corresponding to the rented property and its accessories. These are expenses that are not individualized, either because it is impossible to do so or because they have not been done.

If the property is located in a building under a condominium regime , the costs are those that correspond to your share of ownership; if not, they are those that correspond to your share of ownership.

These expenses are in principle the responsibility of the landlord, although the parties may agree that they are assumed by the tenant. For these agreements to be valid, the following are required:

– that they are express;

– that are recorded in writing; and

– the annual amount of expenses at the date of the contract is determined.

The agreement on community expenses affects those that are current or ordinary, of annual forecast, including ordinary repairs and adjustments or increases of the annual fee caused by such concepts, but not those extraordinary ones, outside the annual budget, which give rise to extraordinary levies ( AP Asturias 26-5-08, EDJ 182756 ; AP Málaga 23-5-05, EDJ 73976 ). The tenant can refuse to pay those expenses that he considers inappropriate or improper according to the agreement made. However, he can only show his opposition to his landlord, since the community is not part of the exceptional agreement on payment of community expenses by the tenant. According to the horizontal property regulations, the payment of community expenses corresponds to the owner.

If this agreement exists, during the minimum legal term of the contract, currently the first 5 to 7 years of its validity (No. 457 ), the sum that the tenant has to pay for these general expenses can only be increased annually, and never by a percentage greater than double that by which the rent can be increased (No. 493 ).

After this period, the limitation disappears and the increase can be of any amount, without the possibility of opposition by the tenant.

Payment of these expenses must be accredited in the same way as the payment of rent (No. 486 ). The receipt, or supporting document replacing it, must separately contain the amounts paid for the different concepts that make up the total payment.

Clarifications

1) The expenses that are passed on to the tenant cannot be left to the sole discretion of the landlord , and the amount of the same must be fixed by some means that includes ( AP Baleares 28-9-98, EDJ 68458 ; 29-11-00, EDJ 119934 ):

– notification of the amount of the expense, accompanied by a copy or original of the corresponding receipt;

– granting the tenant a period of time to respond, equating the lack of response with tacit acceptance; and

– the passage of a reasonable period of time for the tenant to fulfil the obligation claimed before incurring default.

2) Extraordinary expenses, such as the construction of a garage , are not general expenses for the purposes of their attribution to the tenant, since they are not necessary for the proper maintenance of the property: the tenant should not be responsible for them, even if their obligation to pay community fees has been agreed, and even if the tenant enjoys their use during the lease, since it is a benefit in value for the home.

3) The limitation on the distribution of expenses for rental contracts subject to the rent containment regime in Catalonia has been declared unconstitutional and void . Specifically, L Cataluña 11/2020 art.9.3 redacc RDL 50/2020 established that, for contracts subject to this regime, the agreement that obliges the tenant to assume general expenses and individual services that had not been foreseen in the previous lease contract is void, when the home had been rented within the 5 years prior to 11-12-2020 – the date of entry into force of DL Cataluña 50/2020 – ( TCo 118/2022 ).

However, this declaration of unconstitutionality does not affect consolidated legal situations; it only has future effects, and the contracts entered into prior to the ruling will remain in force.

Individualized expenses

(LAU art.20.3 draft L 12/2023)

The costs for the services of the property, individualised by a meter , are the responsibility of the tenant. These devices can be those installed by public suppliers, or those installed by the landlord or the community to determine the consumption of each neighbour, even when they are billed as a whole for the entire property. It is enough that they are approved by the corresponding office. In this case, there is no limit to the increase in the amount. The amount to be paid depends on both the cost of the service and the use that the tenant makes of it.

However, the clause that transfers the obligation to pay for these services to the landlord is valid, agreeing that the amount of the supplies is included in the rent (“rent with expenses included”).

Taxes, charges and responsibilities

(LAU art.20.1)

The tax administration is not affected by the agreement regarding the payment of taxes, since it must claim from the person who is really liable for taxes: the landlord. A different issue is the possibility that the landlord has, based on the agreement with the tenant, of claiming them from the latter later.

However, as an exception, in the case of the garbage tax , which is required in some municipalities, the taxpayer is the tenant, while the landlord is the substitute taxpayer, as established by the tax regulations regardless of whether or not it has been specified in the contract ( LHL art.20.4 and 23.2.a ).

Clarifications

Something similar was happening, until 5-3-2019, with the ITP and ADJ , in which, being then the tenant the taxpayer, the landlord who had collected the first installment of the rent without requesting proof of payment of the tax became subsidiarily responsible for the payment of the same. See No. 8785 .

Real estate management costs and contract formalization

(LAU art.20.1 draft L 12/2023)

When a third party, a real estate agency or other type of intermediary, is involved in the lease and provides various services to the parties (promoting the property, putting the parties in contact, advising, drafting the contract, etc.), they charge a fee – “agency commission” – which usually consists of an additional monthly rent.

Traditionally, as there was no regulation on this matter, both these costs and those of formalizing the contract were the responsibility of the tenant. However:

• From 26-5-2023 , both the real estate management costs and the contract formalization costs must be borne by the landlord, regardless of whether the landlord is a natural or legal person.
• For contracts signed between this date and 6-3-2019 , the expenses are the responsibility of the landlord, only when it is a legal entity.
• This last rule also applies to contracts signed between 19-12-2018 and 23-1-2019 , although the expenses are not borne by the landlord when, even being a legal entity, it was the tenant who took the initiative to contract these services.

Works and Conservation

(LAU art.21 to 24 ) 

The concept of “maintenance works” covers a wide range of cases, from repairing the structure of the building, waterproofing it, to replacing, for example, the hot water boiler. It would also include repairs of a much smaller nature, such as blocked pipes, broken locks or even minor damage to a wall.

These works are regulated by the LAU art.21 , a special rule of preferential application, which reflects the previous one of the Civil Code:

• Duty of conservation so that the home is in a condition to be used for the agreed purpose ( LAU art.21.1 ; CC 1554.2º ).
• Communication of the need for the works ( LAU art.21.3 ; CC art.1559 ).
• Urgent repairs ( LAU art.21.2 ; CC art.1558 ).
• Minor repairs ( LAU art.21.4 ; CC art.1561 and 1563 ).

The legal regime contained in both the LAU and the Civil Code are difficult to apply in practice because they do not reflect the diversity of cases that can occur in reality. On the other hand, given the number of indeterminate legal concepts contained in these regulations, jurisprudence sometimes interprets the same damage or defect to be repaired in a contradictory manner. Likewise, the number of different cases that can arise makes it difficult to deduce from this jurisprudence criteria that can be applied in a general way.

Clarifications

1) The absence of prior communication notifying the landlord of the need for repairs does not alter the nature of the conservation works and, therefore, they do not become works to be paid for by the tenant ( AP Palma de Mallorca 5-1-17, EDJ 21714 ).

2) In this area, the jurisprudence issued under the LAU/64 is applicable, regarding the so-called ” old rent ” contracts (no. 1880 s. ).

Obligations of the landlord

The landlord is obliged to carry out the necessary repairs to keep the property in habitable condition, so that it can serve the agreed purpose.

The landlord’s obligation is to maintain the property in the same condition as when the contract was signed, provided that:

– the tenant has made correct use of the dwelling and its contents, and the deterioration cannot be attributed to him, since in that case the repair is his responsibility (no. 570 );

– are actually maintenance works and not minor repairs reserved for the tenant (No. 583 ); or

– it involves mere corrections of the damage suffered by the property, not its reconstruction or rebuilding, since in that case, the very state of the property would give rise to the termination of the contract (No. 793 ).

Since the landlord is obliged to maintain the property, he cannot be required to repair defects that it already had at the time of renting it, when they were known and accepted by the tenant who had the opportunity to examine the property before signing the contract ( AP Navarra 11-2-00, EDJ 120297 ; AP Madrid 18-2-15, EDJ 27475 ). However, these cases would have as an exception the possible hidden defects that the property suffered from.

Carrying out works intended to preserve the property does not give the landlord the right to raise the rent .

Clarifications

The contractual clauses that oblige the tenant to carry out all repairs regardless of their origin, transfer the maintenance obligations to the tenant, being contrary to the LAU and, therefore, void clauses, which must be considered as not included (no. 440 ).

Breach

The failure of the landlord to fulfill his obligation to carry out repairs is not usually considered in practice a reason for the tenant to terminate the contract , but it does entitle him to compensation for any damages suffered by his property due to contractual liability arising from CC art.1101 and 1556 ( AP Barcelona 27-7-15, EDJ 124370 ).

The landlord’s failure to comply does not entitle the tenant to suspend payment of the rent . The landlord’s obligation to maintain the property and the obligation to pay the rent are not reciprocal and, therefore, do not condition each other’s fulfillment. They are independent obligations ( AP Madrid 1-7-01, EDJ 40647 ; AP Cantabria 15-5-00, EDJ 27394 ).

The tenant may demand repairs or, if they are urgent, carry them out himself, asking the landlord to reimburse him for the cost. He may even terminate the contract, but in no case may he stop paying the rent. These are the consequences established by the LAU in the event of non-compliance by the landlord, a special rule of preferential application to the principle of reciprocity of the CC art.1124 .

A different matter is that the dwelling, due to lack of repairs, is completely uninhabitable , since in this case it would be a cause for termination of the contract (no. 757 s. ), from which the tenant would no longer be obliged to continue paying the rent ( AP Valencia 30-5-14, EDJ 147732 ).

Clarifications

The landlord is responsible for the destruction caused by the lack of necessary repairs or by acts of bad faith towards the property. However, there is no correlation between rent and repair ( TS 5-1-06, EDJ 1859 ; 11-11-93, EDJ 10158 ).

Tenant’s Obligations

(CC art.1563 and 1564)

The tenant is responsible for the deterioration or loss of the rented property, unless he proves that it was caused without his fault, and for the deterioration caused by the people in his house. In this sense:

– has the obligation to use the dwelling as a diligent father of a family, using it for the agreed purpose, and, failing that, for the purpose inferred from the nature of the rented property, according to the custom of the place ( CC art.1555.2 ); and

– the tenant, at the end of the lease, is obliged to return the dwelling as he received it ( CC art.1561 ). In this regard, unless proven otherwise, it is presumed that he received it in good condition ( CC art.1562 ).

When the deterioration is caused by the tenant’s failure to comply with its maintenance obligations, and not merely by the passage of time, the landlord is exonerated from carrying out the repairs ( TS 17-6-15, EDJ 111113 ; AP Badajoz 8-6-15, EDJ 101140 ).

Unless the tenant proves otherwise, the tenant is presumed guilty and must prove that the damage or deterioration is not attributable to him ( CC art.1563 ; AP Ourense 20-5-15, EDJ 88392 ) and that he acted with due diligence to prevent the damaging event from occurring ( TS 9-11-93, EDJ 10056 ; AP Barcelona 1-6-05, EDJ 110725 ). If he fails to do so, he shall be liable for all damages and losses caused to the leased property ( AP Baleares 23-2-15, EDJ 32549 ).

The presumption is the same when those responsible for the deterioration are the people who occupy the tenant’s house ( CC art.1564 ).

If the damage is due to fraudulent conduct on the part of the tenant, the landlord may terminate the contract and demand compensation for the damages suffered.

If the damage is due to the negligent or culpable actions of the tenant, the landlord may require repairs plus, where applicable, damages, although termination of the contract does not seem possible.

Clarifications

1) The theft of furniture and belongings from the rented property and intentional damage to the property before leaving it constitute the crime of misappropriation and the crime of damage ( AP Cantabria 20-12-17, EDJ 303581 ).

2) The possibility of retaining the amount of the deposit in the event that the tenant returns the property with the walls painted a colour other than white or with holes, making the tenant bear the costs of restoring it to its initial state, is a void clause that must be considered abusive ( LGDCU art.82.4.byf ) because it disproportionately limits the rights of the tenant, who is forced to keep the property that colour throughout the lease or return it freshly painted, in an improved state and without the deterioration due to ordinary use, which the landlord is responsible for assuming once the lease has ended. It exceeds the obligations imposed on the tenant by law, that is, minor repairs resulting from wear and tear due to ordinary use ( LAU art.21.4 ); and the return of housing in the condition in which it was received, except for normal deterioration due to the passage of time – CC art.1561 – ( JPI Barcelona no. 31 9- 1- 23, EDJ 706936 ).

3) In contracts signed before 9-5-1985 , for the years starting on or after 1-1-1995 , the landlord has the right to pass on to the tenant the amount of the repair works necessary to keep the property in a condition suitable for the agreed use ( LAU disp.trans.2ª ; D 4104/1964 art.108 ). Thus, given that the rent update clause is usually omitted in these contracts, the aim was to encourage the carrying out of the works necessary to maintain the rented properties ( AP Madrid 9-2-00, EDJ 120017 ).

Communication of the need for the works

(LAU art.21.3)

The tenant must inform the landlord of the need for work as soon as possible.

To do this, the landlord must be able to verify the condition of the property directly, either by himself or by the technicians he appoints.

From this obligation of the tenant may arise the obligation to compensate the landlord for damages and losses arising from:

– failure to communicate the need for repairs; and

– refusal to facilitate direct verification of the damage.

On the other hand, the fact of not having communicated the need for repairs conditions the possibility of the tenant being compensated for damages , since, if he has not been required, it is difficult to prove a fraudulent or negligent act by the landlord who has not carried out the relevant repairs ( AP Valencia 3-3-15, EDJ 85250 ).

The notification may be made in any way that is sufficient to inform the landlord of the need for repairs ( LAU art. 21.3 ; CC art. 1559 ). Since no special type of notification is contemplated, it is convenient for the tenant to make it in a way that allows a record of its completion.

The notification period is set with maximum flexibility depending on the nature of the defect, the harm to the tenant and the cost of the repair.

Clarifications

1) The declaration of liability against the landlord for damages caused by the collapse of the house has been rejected, based on the lack of repairs to preserve it, as this need was not communicated by the tenant who was aware of it ( TS 10-11-93, EDJ 10092 ).

2) In the case of urgent repairs carried out by the tenant, the communication serves to prove that the work has not been done voluntarily ( AP Salamanca 6-11-14, EDJ 271778 ).

Duty to support the work

(LAU art.21.2)

Since one of the landlord’s obligations is to maintain the tenant in peaceful enjoyment of the property, the tenant is obliged to bear the works only when their execution cannot be deferred until the end of the lease, because the preservation of the property would be put at risk.

may only refuse to carry out repairs if they are not essential to stop the deterioration of the property and thus prevent the repair costs from increasing. The tenant’s objection , when unreasonable, gives rise to compensation for damages.

It is the landlord’s responsibility to qualify the work as non-deferrable until the end of the lease and, in the event of a discrepancy, to prove this circumstance ( AP Madrid 21-4-10, EDJ 118055 ).

If these conditions are met, the tenant is obliged to put up with the works even if they are very bothersome or if he or she is temporarily deprived of part of the property.

If the work lasts more than 20 days , the rent must be reduced (No. 503 ). However, when the execution of these conservation works in the rented property makes it uninhabitable , the tenant has the option of suspending the contract or withdrawing from it (No. 783 ).

Urgent repairs

(LAU art.21.3)

At any time and after notifying the landlord, the tenant may carry out urgent repairs to avoid imminent damage or serious inconvenience, immediately demanding the cost from the landlord.

For these purposes, the following is required:

• An urgent need , which means that:

– the works must be important and necessary to prevent imminent damage or serious inconvenience; and

– the damage has not been caused by the tenant himself in a malicious or negligent manner.

• Although no authorization is required, the landlord must be informed of the need for the works before they are carried out, so that he is aware of the state of the property and has the opportunity to carry them out himself.

Carrying out these repairs is a possibility given to the tenant, but in no case an obligation on his part. In reality, the only duty imposed is to inform the landlord of the need to carry them out ( TS 28-1-81, EDJ 1311 ).

The tenant may deduct the cost of the work from the next rent payment. If the landlord refuses to pay the amount advanced by the tenant for the repair, arguing that it was not urgent, it is up to the courts to establish the limits of the obligation to notify and the requirements of urgency ( AP Madrid 21-4-10, EDJ 118055 ).

Clarifications

Urgent repair works have been considered those that affect the safety or health of the home ( AP Gipuzkoa 19-7-99, EDJ 27765 ), such as the gas installation ( AP Alicante 7-7-05, EDJ 123541 ).

Minor repairs

(LAU art.21.4)

It is the tenant’s responsibility to make minor repairs required due to wear and tear from ordinary use of the property.

The determination of these minor repairs is often a source of controversy:

• It does not deal with material damages caused by the tenant, through fault or negligence, for which, due to his direct intervention, he is already clearly responsible ( CC art.1563 ).
• This is the ordinary maintenance of the home, an obligation derived from the obligation to use it diligently ( CC art.1555 ) and return it as it was received, except for what has perished or been damaged by an unavoidable cause ( CC art.1561 ).

Therefore, it is understood that the lessee’s obligation includes replacing wear and tear from ordinary use ( maintenance ) but not what is damaged by the passage of time ( obsolescence ). Although taking into account that sometimes the useful life of an object is shortened because it has been used improperly or inadequate or insufficient maintenance has been carried out.

In any case, it is up to the courts to determine the limit of these, although, in any case, the duration of the lease must be taken into account.

The landlord may require that, upon return of the property, all minor repairs necessary to ensure that the property is returned in conditions equivalent to those in which it was delivered be carried out, except for anything that has been lost or damaged by the passage of time or by an unavoidable cause ( CC art.1561 ).

Clarifications

1) The installation of air conditioning cannot be considered necessary for the habitability of the home, but rather as an improvement or utility; its repair must be included within the repairs of the appliances and derived from their use in accordance with the provisions of LAU art.21.4 , corresponding as minor repairs to the tenant ( AP Valencia 5-5-06, EDJ 260700 ).

2) The gas inspection is based on its ordinary use and is the responsibility of the tenant ( AP Albacete 24-2-00, EDJ 8717 ; in the opposite direction, AP Valencia 5-6-12, EDJ 241694 ).

3) Repairs to damaged paint are the responsibility of the landlord when the walls have been used normally. For example, it is normal to have dark frames around light switches, but not walls with graffiti, holes or peeling paint ( AP Las Palmas 26-11-14, EDJ 269352 ).

Improvement works

(LAU art.22 )

Although the law does not contain a definition of improvement works, it is understood that they are those of a voluntary nature. Therefore, improvement works are, in principle, those that cannot be classified as conservation or repair works.

In this sense, improvements are considered to be those works that represent an appreciable result, economically, socially or aesthetically, which, as a consequence of the material or legal investment, durably increase the value of the home, its utility or performance ( AP Córdoba 16-4-02, EDJ 24184 ).

However, another sector of the doctrine considers that the regulation of the LAU art.22 can only be applied to useful improvements , that is, those that allow greater functionality or comfort to the home. If the possibility of carrying out any luxury work were admitted, the landlord could be failing to comply with his obligation to maintain the tenant in peaceful enjoyment of the lease, and not to change the form of the rented home ( CC art.1554.3 and 1557 ).

Obligations of the landlord

(LAU art.22.2)

The landlord who wishes to carry out improvement works must notify the tenant in writing at least 3 months before the start of the works. This notification must contain the following details:

• The nature of the work, so that the tenant can assess the possibility of deferring the improvement and the inconveniences that this will entail.
• The start date, which cannot be earlier than 3 months after notification, unless the tenant authorizes it to start earlier.
• The duration, so that the tenant can assess the time during which he must endure the inconvenience of the work.
• The foreseeable cost, which allows you to calculate the increase in income that carrying out those actions may entail (no. 500 ).

Upon notice from the tenant, the tenant’s options are as follows:

– withdraw from the contract within one month of notification, unless the works do not affect or affect the rented property in an irrelevant way;

– accept the execution of the works;

– refuse to carry out the works, alleging and proving that they are not justifiable and that they are reasonably deferrable.

Tenant’s Obligations

(LAU art.22.1)

The tenant is obliged to support the execution of improvement works whose execution cannot reasonably be deferred until the end of the lease.

Deferral is not possible :

• For works that have received a subsidy from a municipal, regional or state administration body, which grants a deadline for its execution, making the subsidy conditional on compliance with said deadline.
• The works imposed on the landlord by agreement of the community of owners of the property in horizontal property.
• Works suitable for seasonal opportunity .

The assessment of the relevance of the improvement, as well as the possibility of deferral, corresponds in principle to the landlord, but the tenant may exercise his right of opposition (no. 577 ).

Effects of the works

(LAU art.22.2 and 3)

The implementation of improvement works produces the following effects:

• If the tenant has opted to withdraw , as permitted by the building contractor, the lease will be terminated within 2 months from the date of termination. During these 2 months, the works cannot begin.
• When the tenant decides to bear the works , he has the right to a reduction in rent proportional to the part of the home that he is deprived of for this reason (no. 503 ) and to compensation for the expenses that the works force him to incur.
• They may also give rise to the landlord’s right to raise the rent (No. 500 ).

Clarifications

works other than those notified by the landlord are carried out , or the improvements entail the total deprivation of the dwelling, it should be possible to apply analogously what is established for cases of uninhabitability of the dwelling (no. 710 ) and the possibility for the tenant to terminate the contract (no. 783 ).

Tenant’s works

(LAU art.23 and 24 )

Landlord’s consent

The tenant may carry out without authorization , although prior notification is given:

– works that do not modify the configuration of the home or the property’s accessories;

– urgent repairs and those due to wear and tear; and

– works to adapt the dwelling to the needs of disabled people and, since 6-6-2013 , also to those over 70 years of age, who live there permanently. However, the tenant is obliged to restore the dwelling to its previous state, if the landlord requires this at the end of the contract.

On the other hand, the written consent of the landlord is required for any work that does involve a modification to the configuration of the dwelling or the accessories of the property (nº 610 ); under no circumstances may work be carried out that causes a decrease in the stability or safety of the property (nº 620 ).

Although the rule refers to the consent of the landlord, it should be understood that it refers to the owner , since it may be the case, as occurs in usufruct, that the landlord does not have the capacity to alter the form and substance of the dwelling ( CC art.467 ).

In relation to this issue:

• When the property is owned by several owners , the authorization to carry out works that alter the configuration of the property requires the unanimity of the co-owners, since it is an act of disposal and not of administration ( CC art.397 ). However, if it is only one of the co-owners who interacts with the tenant, the latter does not have to know the relationships between the co-owners, so his liability would be covered by the authorization of the latter ( TS 19-10-93, EDJ 9258 ).

• While the legal representative can authorize these works, the administrator or voluntary representative requires the express mandate of the owner since this authorization goes beyond an act of administration.

As regards the scope of the authorisation , it has been considered that every lease implies an authorisation to carry out the works necessary to adapt the property to its specific purpose (TS 18-10-91, EDJ 9860), although said authorisation is not valid indefinitely. Thus, using the authorisation contained in the lease contract for these adaptation works, after the minimum legal term of the contract (nº 487 ), constitutes an abuse of law ( TS 4-7-91, EDJ 7249 ; 27-4-94, EDJ 3736 ).

The consent, expressed in writing, approving the works may be prior to, contemporaneous with or subsequent to the works. Given that non-compliance with this consent is not sanctioned with nullity, it can be understood that it is a requirement with mere evidentiary effects.

If the landlord has given his consent to these works, he is only entitled to demand the restoration of the dwelling to its previous state in certain circumstances:

– when this has been expressly agreed upon when authorizing them; and

– when the works entail a decrease in the stability or safety of the building.

The right to reinstatement of the LAU art.23 only exists with respect to unauthorized works and those that cause a change in the configuration or safety of the property ( AP Cantabria 27-5-03, EDJ 170844 ).

Clarifications

1) It is the landlord’s responsibility to prove that the tenant has carried out works that modify the layout of the property, and it is the latter’s responsibility to prove that these were carried out with the landlord’s consent ( AP Cantabria 26-7-00, EDJ 67506 ). This consent must always be express and in writing; mere knowledge of the works by the landlord is not sufficient ( AP Baleares 27-9-02, EDJ 109306 ; AP Granada 21-12-07, EDJ 364008 ).

2) The authorization granted to the tenant to carry out repair and improvement works at his own expense does not imply an obligation for the tenant nor does it exempt the landlord from making the appropriate repairs ( TS 24-5-95, EDJ 3309 ).

3) The works carried out by the tenant on the property, at the end of the lease , remain for the benefit of the owner ( AP Asturias 18-3-03, EDJ 119331 ).

Lack of consent

(LAU art.23 and 27.2)

Carrying out works that require it without the landlord’s authorization may result in the termination of the contract, without prejudice to which, at the end of the contract, the landlord may choose between:

– require the tenant to restore things to their previous state; or

– the preservation of the modification made, without the user being able to claim any compensation.

The landlord can only demand that things be returned to their previous state when the contract ends or in the event that it is terminated.

Improvement works

 The improvement works that the tenant can carry out are not regulated in the LAU, so they are governed by the agreement of the parties and, additionally, by the CC art.487 and 488 , relating to usufruct.

In this way, the tenant could carry out improvement works, provided that it is not prohibited or restricted in the lease agreement:

– may make useful and voluntary improvements that do not alter the form or substance of the dwelling and that do not diminish the stability of the building or the safety of the dwelling or its accessories;

– has no right to compensation from the landlord, but may withdraw the improvement if it does not cause detriment to the property; and

– If you have to compensate the landlord for damage caused to the property, this can be compensated in whole or in part by the improvements made.

Works that modify the configuration of the home

(LAU art.23.2)

Determining the type of works that modify the configuration of the home or its accessories requires analyzing each case ( TS 20-7-93, EDJ 7389 ).

The concept of configuration is not defined in a generic or abstract way in any legal provision and implies a comparative judgement of the situation of the dwelling before and after the works were carried out: the change in configuration does not have to refer to the one that the property had when the lease was established, when the contract was perfected or at any later time, but to the one that it had immediately before the works were carried out. In addition, the particularities of the dwelling in question must be taken into account ( TS 5-4-91, EDJ 22515 ; 4-7-91, EDJ 7254 ).

It can be said, in principle, that the indeterminate legal concept of the configuration of the rented dwelling must refer to the exterior and interior placement of the parameters, determining the volume, shape and distribution of the corresponding enclosure between the walls and ceilings that delimit the rented space, both horizontally and vertically.

On the other hand, case law holds that, in principle, for the modification in the configuration of the property to have a resolutory significance, it is necessary that the works be of the so-called fixed or factory type, embedded in the floor and ceiling, and carried out with construction materials.

When the modification of the configuration is insignificant , it cannot justify the termination, since, if it were to give rise to it, there would be such a disproportion between the cause and its consequences that the balance of commutative justice with which the contract must be fulfilled would be broken and a legally absurd conclusion would be reached and, as such, rejectable ( TS 23-11-74, EDJ 127 ; AP Alicante 5-4-06, EDJ 289589 ).

Clarifications

1) They are considered to alter the configuration of the property and may lead to the termination of the contract if they are carried out without the consent of the landlord:

– the removal or displacement of partitions, or the installation of false ceilings that are not superimposed but permanently embedded in the building’s structure ( TS 27-9-85, EDJ 7576 );

– the opening of doors in places where they did not exist before, since this has been considered a substantial modification, especially if it increases the available space ( AP Lleida 6-11-01, EDJ 67879 ); also the opening of a window in a corridor ( AP Barcelona 4-4-03, EDJ 109233 );

– the works to add a room to the adjoining flat, as this would involve a new layout of the dwelling with the demolition and construction of new partitions; and the transformation of balconies into windows with the construction of a false roof, as this would involve an alteration of the vertical configuration of the dwelling, as well as a modification of the external configuration of the building in which it is located ( AP Madrid 21-6-01, EDJ 71295 );

– the construction of an entrance and a staircase for independent access to the house ( AP Barcelona 13-7-14, EDJ 127543 );

– the closing of windows on the main façade and the work of raising partitions and installing bathrooms ( TS 19-4-13, EDJ 67715 ).

2) The works that cause a change that is not merely accidental and in detail (TS 11-1-54; 23-11-74, EDJ 127 ) do not modify the configuration of the dwelling, but must essentially alter the shape, both horizontally and vertically, noticeably changing its peculiar appearance ( TS 5-4-91, EDJ 22515 ). It has been considered that the following do not alter the configuration of the property:

– the installation of an air conditioning unit , taking into account that it can be removed from the building at any time, without damaging it ( AP Madrid 29-9-06, EDJ 303840 );

– the mere plastering or replacement of marble façade cladding with wood or flooring ( TS 18-4-95, EDJ 1462 );

– the enclosure of a terrace with aluminium and removable glass ( AP Barcelona 15-10-04, EDJ 176213 );

tiling works and installation of sanitary ware, hot water and heating ( AP Barcelona 13-7-04, EDJ 127543 ).

Impact on the stability of the building

(LAU art.23.2)

The landlord may immediately require the tenant to return things to their previous state if the works have caused a decrease in the stability of the building or the safety of the dwelling or its accessories. To require the restoration to the previous state, it is not necessary to wait until the conclusion of the contract.

Even if the landlord has granted permission to carry out certain works, if these ultimately cause a decrease in the stability or safety of the property, he may require the property to be restored to its previous state, even after the lease has ended.

Unlike the case of works that modify the configuration of the home, where the jurisprudence is very extensive, in this case it is scarce, due in large part to the fact that the works that cause a decrease in the stability of the building or the safety of the home also modify its configuration, which is easier to prove, thus generating more cases.

The intention or not of the tenant to affect the stability or security of the home is irrelevant for the purposes of the application of this rule.

Modification of ownership

There are various circumstances that, affecting the parties to the contract, imply a change in the initial ownership of the same.

Alienation of the rented property

When a rented property is sold, the tenant may exercise, if he or she holds it, the right of preferential acquisition or continue with the lease, although the purchaser will take the position of the landlord through subrogation .

Right of first refusal

(LAU art.25 )

When the rented property is put up for sale, the tenant who occupies it has the right to acquire it with preference over other possible buyers.

To exercise his right of preferential acquisition, the lessee has the following options :

– right of first refusal, which operates before the transfer (No. 647 ); or

– right of withdrawal, which operates after the transfer (nº 653 ).

However, this right is not absolute for any purchaser and, in addition, the parties may have agreed to waive it.

Clarifications

If for the purposes of registration the mere statement by the seller as to whether or not the property is leased or the identity of the tenant is considered sufficient , there is no reason why the validity of said statement should not be extended to other elements of the contract such as the existence of a preferential right of acquisition. This is reinforced by the LAU art. 25 itself , by not expressly requiring proof of the waiver, which does occur with notifications for the purposes of the rights of first refusal and withdrawal ( DGSJFP Resol 30-10-23 ).

The tenant’s right of preferential acquisition must be understood to be applicable only to the sale :

• The restrictive interpretation is justified by the fact that the legislator, when he has wanted to introduce broader cases of application of this right, has done so in a specific way. In this case, the LAU art.25 refers specifically to the sale.

Although the jurisprudence initially granted a social purpose to the rights of first refusal and redemption, even advocating an extensive interpretation for doubtful cases (TS 18-12-54; 26-3-60; 25-4-63), this orientation has evolved towards opposite positions, maintaining that the interpretation of the limitations of the right of property, in whose nature the tenant rights of first refusal and redemption unequivocally participate, must be of a restrictive nature ( TS 5-9-91, EDJ 8427 ).

The DGSJFP has a similar opinion, although it considers that it cannot be considered that the sole qualification given by the grantors to the contract entered into is decisive for the purposes of determining the admissibility or inadmissibility of these rights, regardless of the true nature and legal characterization. Thus, the exercise of these rights is appropriate when there is a true contract of transfer of ownership, regardless of the name used by the parties ( DGRN Resol 20-2-92 ).

• The existence of rights of first refusal and redemption is ruled out in these other cases : exchange, donation (including donation disguised as a sale and remunerative donation), offer of sale, transfer of a property in exchange for a life annuity, contribution of premises to a company, simple division and allocation of the inheritance ( TS 14-11-16, EDJ 201747 ) or the sale of hereditary rights, acquisition of the property by right of accession, free transfer of personal rights derived from a promise of sale, sale of usufruct to the new owner and solutory assignment.

The exercise of this right is excluded in the contribution of a property to a company in exchange for shares of the same because such operation is not equivalent to the case of sale ( TS 6-2-91, EDJ 1200 ; 27-5-00, EDJ 10879 ).

Forced judicial transfers produced in an executive procedure are subject to preemption and retraction, since in our legal system this type of transfer is considered to be included in the concept of sale ( DGRN Resol 22-3-99 ).

Clarifications

simulated contract of sale that hides another contract with a liberal cause is proven ( TS 22-11-94, EDJ 9215 ; 3-12-96, EDJ 9127 ).

These tenant rights take precedence over any other similar rights, with the exception of:

• The right of redemption granted to the co-owner of the property. The preference given to the right of redemption of the co-owners over the tenant is logical, since the community of property is considered an uneconomical and transitory state which should be facilitated to be extinguished.

• The conventional redemption in favor of a previous owner ( CC art.1507 and 1518 ), registered in the Property Registry before the lease was signed, since the consequences of the latter should not fall on the person who went to the Registry to register his right of preferential acquisition.

The object of the right of preferential acquisition is the rented dwelling; however, when other accessory objects have also been rented by the same landlord, the exercise of this right must be made for all of them and not only for the dwelling.

If the contract stipulates that the tenant will waive this right, the landlord is obliged to notify his intention to sell the property at least 30 days before the date of formalization of the sales contract.

Although it is currently possible for the parties to agree to waive this right in all contracts, for those signed between 1-1-1995 and 5-6-2013 , this agreement is only possible when the agreed duration is greater than 5 years, the minimum legal term for these contracts (No. 457 ).

The right of preferential acquisition does not apply when:

• The rented property is sold together with the remaining properties or premises owned by the landlord that are part of the same property.
• All the apartments and premises in the property are sold jointly by different owners to the same buyer.

For these purposes it is irrelevant whether or not the property is constituted under a horizontal property regime ( DGRN Resol 24-7-95 ; TS 6-3-71, EDJ 96 ; 15-6-74; 6-10-86).

However, if there is only one dwelling in the property , the tenant retains the rights of first refusal and withdrawal, which is logical, since the exceptions are designed for cases of multiple sales in which the owners who wish to transfer the dwellings may be harmed by the tenant’s exercise of his right of preferential acquisition.

Clarifications

1) For contracts signed from 6-3-2019 and between 19-12-2018 and 23-1-2019 , with the modification of the LAU art.25.7 carried out, respectively, by RDL 7/2019 and RDL 21/2018 now repealed, for cases of joint sale in which the tenant’s right of preferential acquisition is eliminated (no. 637 ), the housing legislator is empowered to establish the right of first refusal and withdrawal, with respect to the entire property, in favor of the body designated by the competent Administration in housing matters. In these cases, the regulation of the right of preferential acquisition of the LAU regarding the notification and the exercise of the right itself is applicable.

2) When the transferred property constitutes a patrimonial unit , the exercise of preferential acquisition rights must be denied to anyone who does not hold a lease right over the entire property, but only over one of its constituent parts ( TS 22-10-04, EDJ 152669 ).

3) The right of preferential acquisition does not apply when the unitary object of the sale is not only the leased property. If several properties of a property (not necessarily all) with a unitary object are sold by their sole owner to a single buyer, the right of redemption does not apply ( DGRN Resol 16-10-99 ).

4) The right of first refusal and right of redemption is applicable in the case of the sale of undivided shares of housing or premises, if the right of redemption of commoners has not been used, since, otherwise, the tenant could be deprived of the acquisition of the property through the successive transfer of the property in shares ( DGRN Resol 27-12-96 ).

5) In the case of a community of tenants , it has been understood that the exercise of the right of first refusal is an act of ownership and, therefore, requires unanimous agreement ( TS 23-10-90, EDJ 9624 ; 10-4-90, EDJ 4010 ).

Right of first refusal

(LAU art.25.2)

The landlord who wishes to sell the leased property must give reliable notice to the tenant.

When the tenant is notified of the decision to sell the rented property, he may exercise a right of first refusal over it within 30 calendar days from the day after notification. This period is considered to be one of expiry, and therefore cannot be interrupted ( AP Baleares 10-1-03, EDJ 102879 ).

Notification

The notification must be made in a reliable manner and must state the price and other essential conditions of the transfer.

The effects of this notification expire 180 calendar days after it is given. If after this period has elapsed since the notification, the landlord has not formalized the contract, if he wishes to sell the property, either to the same buyer or to another buyer, he must notify the tenant again.

To register in the Property Registry the transfer of a rented property to a third party, it must be proven that this notification has been made ( LAU art.25.4 ).

Clarifications

1) Notification is not necessary when it is proven that the tenant was aware of the sale transaction, as well as all its essential conditions ( AP Sevilla 12-2-03, EDJ 79500 ).

2) The landlord is legally bound from the moment the tenant is notified of the planned sale. The landlord cannot withdraw from the sale because third-party purchasers withdraw from the purchase ( TS 19-12-91, EDJ 12090 ).

Right of withdrawal

(LAU art.25.3 ; CC art.1518)

Legal right of redemption is the right to take the place of the purchaser of a thing, by purchase or by payment in kind, under the same conditions stipulated in the contract.

The tenant may exercise the right of withdrawal in the following cases:

• When the selling landlord has not previously notified you of the sale.
• When any of the required conditions have been omitted in the notification.
• When the effective purchase price is lower than that notified or its other essential conditions are less onerous.

Clarifications

The study of the legal action of retraction is carried out in no. 10062 s.

Notification

In order to exercise his right, the tenant must be aware of the sale . To this end, the purchaser must reliably notify the tenant of the essential conditions under which the sale was carried out, by delivering a copy of the deed or document in which it was formalized. This notification must be made in all cases, even if the landlord had correctly fulfilled the prior obligation to inform the tenant of the intention to sell and the tenant had not exercised the right of first refusal.

The law does not determine the period of time that the purchaser must notify the tenant of the conditions under which the sale was made. However, it is in the buyer’s interest to make the notification as soon as possible, since the registration of the sale in the Property Registry is conditional on the justification of its completion ( LAU art.25.5 ).

Expiration 

The right of withdrawal has an expiration period of 30 calendar days, counted from the day after the notification that the purchaser must make to the tenant.

Regarding the calculation of the expiration period of the right of redemption, it is established that the full and detailed extra-registration knowledge by the tenant of the transfer, through a reliable means, implies a tacit waiver of the right to be notified by the purchaser. In this case, it is from that moment that the expiration period begins to run. This is to prevent the tenant who is aware of the transfer from waiting for the registration in the registry to, under its formal protection, exercise a right that has already been precluded due to not having done so when he could and should have done so ( TS 6-3-00, EDJ 2145 ).

Clarifications

registration of the sale by the retractable buyer in the registry is not admissible as a means of informing the tenant of the alienation of the property ( AP Sta. Cruz de Tenerife 17-4-98, EDJ 11573 ).

Third party purchaser

 The exercise of the right of withdrawal entails reimbursement to the buyer ( CC art.1518 ):

• Regarding the sale price . In the event of a difference between the actual price and the price stated in the deed, the retractor must pay the actual price regardless of the price stated in the deed (TS 20-5-71; 30-4-91, EDJ 4467 ; 28-6-91, EDJ 6979).

• Of the purchase and sale expenses , that is, the contract expenses and any other legitimate payment made for the sale.

• Of the necessary and useful expenses incurred on the thing sold. In order to exercise the right of withdrawal, prior payment or prior deposit of the price is an indispensable requirement. Said payment must be made in cash ( TS 16-2-04, EDJ 4471 ). The acquisition phenomenon that results from the lessee’s exercise of preferential acquisition occurs when the relevant payment is made through the deposit ( CC art.1518 and 1521 ).

Resignation

 The waiver of the right of withdrawal is valid when it is carried out after the right has been specified, when it has ceased to be something abstract and has become an objective and consolidated right, that is, when the leased property is transferred. It is at this moment when the right is actually incorporated into the tenant’s assets and there is a real possibility of exercising it or waiving it ( TS 6-3-00, EDJ 2145 ; AP Barcelona 24-10-08, EDJ 293650 ).

generic , early and broad waiver incorporated into a clause of the contract is not possible ( TS 11-10-01, EDJ 33594 ). When the waiver is made before the right has arisen, it is rather a case of exclusion from the applicable legislation, which is possible provided that the regulation itself prohibits it in order to protect one of the contracting parties. In this sense, the exclusion from the regulation on the right of withdrawal made by the LAU is perfectly valid ( TS 4-3-15, EDJ 21547 ).

Subrogation

(LAU art.14 )

Subrogation is the legal situation in which one person acquires the rights and duties of another. As far as leases are concerned, this change in the ownership of the contract can occur in relation to both parties, landlord and tenant, although, when selling a rented property, it is the landlord who would be subrogated.

Given the degree of relevance that the various regulations have given to the registration of the lease in these effects, it is especially relevant in this case to consider the date of signing the contract.

Contracts signed from 6-3-2019

 For contracts signed after 6-3-2019, when the leased property is sold, the purchaser becomes subrogated to the rights and obligations of the lessor who transferred it to him, regardless of whether the lease is registered or not in the Property Registry and whether or not the purchaser meets the requirements of the third party in good faith of the LH art.34 .

If the duration agreed in the contract is longer than the minimum legal term – 5 or 7 years -, the purchaser is subrogated for the agreed term, unless he could be considered a third party in good faith in accordance with the LH art. 34 , in which case the subrogation would be limited to the minimum legal term. In this case, the tenant has the right to be compensated by the transferor – original landlord – with an amount equivalent to one month’s rent for each year that, exceeding the minimum legal term, remains to be fulfilled under the contract.

However, if the parties agreed in the contract that the sale of the property extinguishes the contract, the purchaser is only obliged to subrogate during the minimum legal period.

Clarifications

1) It is worth considering at what point and in what cases the tenant’s right to compensation arises , when, with the duration of the contract exceeding the minimum legal term, the purchaser is considered to be in good faith. It seems logical to think that one should wait for the minimum term to pass, without the tenant himself expressing his desire to terminate the contract, and with the new landlord having in turn notified his intention to terminate it.

2) This regulation of subrogation is included for the first time in the LAU through RDL 7/2019 , it was not included in the previous RDL 21/2018 , hence in this case there is no differentiated regulation for contracts signed between 19-12-2018 and 23-1-2019 .

Contracts signed between 6-6-2013 and 5-3-2019

 When the contract was signed between 6-6-2013 and 5-3-2019, in the case of transfers for valuable consideration of the rented property, the following situations can be distinguished:

When the lease is registered prior to the transfer of the property, the purchaser of the property has the obligation to subrogate the rights and obligations of the landlord ( LAU art.7.2 and 10.2 ).

When the lease has not been registered , as the transfer takes place for a consideration, the following two situations can be distinguished .

Property registered in the Property Registry

 The transfer of a leased property that is registered in the Property Registry, without the lease being registered, extinguishes the latter if the purchaser can be considered a third-party mortgagee, that is, if he has acquired the property for a fee and registers it in the Property Registry, since in that case he is presumed to be in good faith ( LH art.34 ). In short, if he was unaware of the existence of the lease when acquiring the property.

In this regard, there may be various situations whose effects must be taken into account:

• That the purchaser does not register his title in the Registry. In this case he is subrogated in the rights and obligations of the contract since he does not have the status of third party mortgagee of the LH art.34 .
• That the purchaser for valuable consideration who has registered, thereby showing the presumption of good faith established by LH art.34 , actually knows of the existence of the lease prior to his acquisition, because it has been recorded in the deed of transfer. In principle, the interpretation a sensu contrario of LAU art.14.1 seems to lead to the subrogation of the buyer in the lease contract due to the lack of the requirement of good faith.

However, since the effectiveness of the lease against third parties requires “in any case” its registration in the registry ( LAU art. 7.2 ), the rule itself seems to lead to the conclusion that the general principle ” sale takes away rent ” prevails ( CC art. 1571 ), since here it is no longer required that the third party has the status of a bona fide third party mortgagee, but only that it is registered in the Registry. That is, once the acquisition title is registered in the Registry, the previous unregistered lease does not bind it, being extinguished.

Clarifications

Against the application in this case of the principle ” sale removes rent “, it could be argued that the LAU art. 14 , for the specific case of alienation of the home, specifies the general principle of effectiveness against third parties of the LAU art. 7.2 , as does the LAU art. 29 for leases for use other than housing – there is subrogation unless the purchaser is in good faith by meeting the requirements of the LH art. 34 -. That is, in reality a complementary requirement is being demanded so that subrogation does not occur, which would be the general rule. However, it seems difficult to sustain this position due to the express reference made by the LAU art. 14.1 to the LAU art. 7 and 10 -redacc L 12/2023-.

Property not registered in the Property Registry

 If the property is not registered in the Property Registry, the buyer has the right to terminate the lease when the sale is verified, unless otherwise agreed ( LAU art.14.2 ; CC art.1571 ).

If the purchaser exercises this right and therefore decides to terminate the lease, the lessee:

– may demand to be allowed to remain in the property for 3 months, starting from the date the buyer notifies him of his intention;

– must pay the rent and other similar amounts that are due to the new owner; and

– you can ask the seller, the previous landlord, to compensate you for any damages caused.

The tenant of the unregistered property is granted these two rights because he was not able to register the lease in the Registry, thus avoiding the termination of the lease with the transfer.

In this way, the buyer is assimilated to a bona fide third-party mortgagee ( LH art.34 ), preserving in all cases the buyer’s right to terminate the lease ( CC art.1571 ) above the tenant’s right.

ineffectiveness against third parties of unregistered leases is actually being applied ( LAU art.7.2 ), with compensation for damages to the affected tenant who has not been able to register his lease.

Clarifications

withdrawal attempted by the tenant who was not registered in the Property Registry has been rejected , in the case of a third party purchaser at public auction who is unaware of the existence of the lease ( AP Jaén 7-1-98, EDJ 68475 ); similarly, when a leased property is sold at public auction without the lease being registered in the Property Registry, the lease agreement is extinguished as it is not proven that the third party purchaser – a credit institution in a foreclosure proceeding – was aware of the existence of the lease ( AP Madrid order 1-4-00, EDJ 120023 ).

Contracts signed between 1-1-1995 and 5-6-2013

 In contracts signed between 1-1-1995 and 5-6-2013, there is no general requirement to register the lease for it to take effect against third parties.

• The purchaser must have respected the contract in any case, being subrogated to the rights and obligations of the lessor during the first 5 years of its validity, and this regardless of whether the acquisition had been for a fee or free of charge or whether the fact of the lease was known or not ( LAU art.14 , in its original wording).

• If the agreed duration is greater than 5 years , the purchaser is also subrogated for the entire duration, unless it is an acquisition for valuable consideration registered in the Registry of a third party in good faith ( LH art.34 ), in which case the following effects would have occurred :

– the purchaser will only have to bear the lease for the time remaining until the 5-year term has elapsed; and

– The seller must compensate the tenant with an amount equivalent to one month’s rent in force for each year of the contract that, exceeding the aforementioned 5-year period, remains to be fulfilled.

In any case, whether or not the requirements of LH art.34 are met , when the parties have entered into an agreement to terminate the lease by selling the property, the purchaser must only bear the lease for the time remaining for the 5-year period to elapse, since the rule itself, the original wording of LAU art.14 , excluded its application if there was an agreement between the parties.

Clarifications

The function of the termination agreement is twofold: on the one hand, it affects the duration of the lease, regardless of whether the purchaser is aware of its existence, and, on the other, it excludes the possibility of the tenant claiming compensation for damages suffered ( AP Barcelona 2-3-06, EDJ 262139 ).

Termination of the landlord’s right

(LAU art.13 )

There are various circumstances that lead to the disappearance of the landlord’s right, whether he is the owner of the property, the holder of a right of enjoyment or use of it, or its apparent owner. In some of these cases, the consequences for the lease contract of the termination of the landlord’s right are different depending on the date on which it was signed.

The circumstances that may terminate the landlord’s right of ownership are, among others, conventional redemption, fiduciary substitution, forced alienation and the purchase option.

Clarifications

1) Conventional redemption implies the recovery of the property by its seller, within an agreed period or, failing that, 4 years, after the celebration of the sale ( CC art.1507 to 1520 and 1572 ).

2) In the fiduciary substitution , although the lease is an act of administration permitted to the fiduciary, when the former has established an excessive term, it is similar to the acts of disposal. The lease removes, or at least extraordinarily limits, the enjoyment and possession of the property, and this makes it acquire practical characteristics of real right, being even more burdensome than those in certain cases.

3) The modification of this regime is included by Royal Decree-Law 7/2019 with effect from 6-3-2019 . It was not contemplated in the previous Royal Decree-Law 21/2018 , applicable to contracts signed between 19-12-2018 and 23-1-2019 .

Owner

(LAU art.13.1)

• For contracts signed after 6-3-2019 , the termination of the right of the landlord, owner of the property, during the minimum legal term of the lease agreement, the first 5 or 7 years, does not affect it, since the tenant has the right to continue with the lease until said term is fulfilled, without prejudice to the right of non-renewal that he has during that period (No. 460 ).

However, the contract would be terminated if the term agreed for it had been longer than the minimum legal term and had already elapsed – for example, a term of 10 years was agreed and the property right is terminated in the eighth year – unless the contract had been registered in the Property Registry before the rights determining the termination, since, in this case, the lease will continue for the duration initially agreed by the parties – in the example, 10 years.

• For contracts signed between 6-6-2013 and 5-3-2019 , the termination of the landlord’s right immediately terminates the lease contract, unless the landlord had accessed the Property Registry prior to the rights determining the termination of the tenant’s right. In this case, the lease continues for the agreed duration.

• Finally, if the contract was signed between 1-1-1995 and 5-6-2013 , the landlord’s right having been terminated, during the minimum legal term -for these contracts 5 years-, the tenant could continue with the lease until said term expired. As in the regime currently in force, if the lease was registered before the right that gives rise to the termination, the former can continue for the agreed duration exceeding the 5 years of said minimum term.

Clarifications

The lease entered into in 2014 is extinguished and ceases to have any effect with respect to the third party purchaser if it is not registered in the Property Registry. There is an ope legis extinction of the tenancy relationship, giving rise to a precarious situation for the occupants. In this case, the non-payment of the rent , initiated with the change of owner – due to the award of the property in foreclosure – and the acquiescence for a period of more than 2 years by the new owner, without requesting eviction or claiming back rents, cannot be expected to revive a tenancy relationship that had been automatically extinguished by operation of law ( TS 1-3-21, EDJ 510415 ).

Holder of a right of enjoyment

(LAU art.13.2)

Regardless of the date on which the contract was signed, leases granted by usufructuaries, superficiary owners and anyone who has a similar right of enjoyment over the property, are extinguished at the end of the landlord’s right, in addition to the remaining causes of extinction that result from the provisions of the LAU.

analogous rights of enjoyment ” refers to , since this concept cannot include rights of use and habitation ( CC art. 525 ), nor personal easements. It seems that reference is being made to real rights of enjoyment created by virtue of the numerus apertus system .

This is the only case in which the contract may have a duration less than the minimum legal term, currently 5 or 7 years (No. 457 ), even if the tenant wishes to extend it.

Owner appearance

(LAU art.13.3)

As of 6-3-2019 , contracts entered into by the tenant in good faith with the person who appears as the owner of the property in the Property Registry, or who appears to be so by virtue of a state of affairs whose creation is attributable to the true owner, will continue until completing their minimum legal term (5 or 7 years), without prejudice to the right of withdrawal that the tenant has during this time (nº 460 s. ). For these purposes it is necessary ( AP Barcelona 6-3-13, EDJ 67554 ):

• That the lease is granted by someone who is not the true owner.

hypotheses occurs :

– that, in accordance with the presumption of registration accuracy and the principle of registration legitimacy of LH art.34 , the landlord appears as the owner of the property in the Property Registry;

– that, although not listed as the registered owner, it appears that the person who grants the contract is the owner of the property; this appearance must come from a state of affairs or real situation whose creation is attributable to the true owner, which leads to the belief that the owner of the property is the person who rents it; or

– that, either due to the circumstance of the landlord being the registered owner, or due to the creation of the fiction of being the owner of the property being leased, the tenant acts in good faith, the good or bad faith of the landlord being irrelevant.

In this regard, it is nevertheless worth considering when this situation occurs which determines the appearance of ownership and what should be understood by the ” state of affairs “. Each specific case must be considered taking into account the omission, rather than active, conduct of the true owner, since it is more likely than not that the “state of affairs” is due to the fact that the property is not registered in the Property Registry or that the successive tract has been broken in a chain of transfers, without the current registration corresponding to reality.

Following the reform carried out in the LAU art.13 by Law 4/2013 , this assumption was eliminated from the rule, so that for contracts signed between 6-6-2013 and 5-3-2019 , the destruction of this appearance would mean the termination of the contract, as occurred in the generic case of termination of the true owner and landlord.

The current regime is identical to that applicable to contracts signed between 1-1-1995 and 5-6-2013 , although taking into account that the minimum legal term was then 5 years, regardless of who the landlord was.

Clarifications

Since leasing is only an ” act of administration ” in which the ownership of the property being leased is not transferred, but only its enjoyment or use, it is not necessary for the person acting as lessor to have the capacity to dispose of the property, but it is sufficient that he has the capacity to transfer the enjoyment or use of the same ( TS 30-3-87, EDJ 2492 ).

Nullity, separation or divorce of the tenant

(LAU art.15 )

In cases of nullity, legal separation or divorce of the tenant, the non-tenant spouse may continue to use the rented property when it is assigned to him/her, in accordance with the civil legislation applicable to him/her ( CC art.90 and 96 , in common law).

The spouse to whom such use is attributed, either permanently or for a period longer than the remaining term of the lease, becomes the owner of the contract . Subrogation occurs, and the original tenant disappears from the contract, and is deprived of the right to use the property. It seems that, by producing the change of ownership by legal imperative, the legislator has deprived the landlord of the right to claim any breach of contract, mainly the payment of rent, against the first tenant and owner.

It is necessary to notify the landlord of the original tenant’s spouse’s desire to continue using the property within 2 months of notification of the corresponding court ruling, attaching a copy of said ruling or, where appropriate, to preserve the right to privacy, only the part of it that affects the use of the property.

For contracts signed between 1-1-1995 and 5-6-2013 , in these situations no type of transfer or subrogation occurs , since, although the spouse to whom the home is awarded continues to live there, he or she is not considered the owner of the contract ( LAU art.15 original version).

The original tenant does not disappear from the contractual relationship, although he is deprived of the right to use the property.

Therefore, it is the original tenant who assumes the obligations towards the landlord and is obliged to pay the rent. In this way, the landlord can sue the user of the dwelling and the holder of the contract for joint payment, without prejudice to the fact that in the event that the non-user tenant pays the amount owed, as payment made by a third party, he could claim against the other obliged party who had the enjoyment or use of the dwelling ( AP Gipuzkoa 13-2-06, EDJ 72548 ).

Clarifications

1) From the analysis of the LAU art. 12 and 15 , it must be understood that, although both are designed to regulate situations of marital crisis , the first regulates the situation of de facto separation of the spouses (nº 745 ), while, if there is a judicial procedure for annulment, separation or divorce, the LAU art. 15 must be applied from the moment the procedures are initiated to obtain the corresponding resolution, either by provisional or very provisional measures or by a regulatory agreement agreed upon for the purpose of filing a suit for separation or divorce ( AP Madrid 15-9-03, EDJ 142275 ).

2) The failure of the non-tenant spouse to notify the landlord within 2 months of his or her intention to continue using the property is not considered a breach that allows for the termination of the contract ( LAU art. 27.1 ; CC art. 1124 ), because the sanction in a court ruling would be rendered void by the mere failure to comply with a formality, such as the fact of communication.

Death of the tenant

(LAU art.16 )

In principle, the death of the tenant causes the termination of the contract (nº 790 ), because in a type of contractual relationship such as the tenancy, the personal relationship between the landlord and the tenant is relevant to sign the contract. However, as an exception, the lease contract is allowed to subsist if there are persons with the right to subrogation who expressly exercise this right ( AP Baleares 21-1-99, EDJ 86957 ).

In leases whose initial duration is longer than the minimum legal term (nº 457 ), the parties may agree that there is no right of subrogation in the event of the death of the tenant after said term has elapsed; or that the lease will terminate at the end of the lease, if the death occurs before then. However, since 6-3-2019 , it is not possible to waive the right of subrogation if the persons who can exercise such right (nº 690 ) are in a situation of special vulnerability, it affects minors, people with disabilities or people over 65 years of age.

Beneficiaries

 The following persons may be subrogated in the lease contract:

• The spouse of the tenant who lives with him at the time of death.
• The person who has lived with the tenant permanently in a relationship similar to that of a spouse, for at least 2 years prior to the time of death, unless they have had common offspring, in which case mere cohabitation is sufficient.
• The descendants of the tenant who at the time of his death are subject to his parental authority or guardianship or who have habitually lived with him during the preceding 2 years.
• The tenant’s ancestors who have lived with him regularly during the preceding 2 years.
• The tenant’s siblings who have lived with him regularly for the previous 2 years.
• Persons other than those mentioned who suffer from a disability equal to or greater than 65%, provided that:

– have a family relationship up to the third collateral degree with the tenant; and

– have lived with this person for the 2 years prior to death.

The order set forth is one of priority, so in the event of the presence of several of the aforementioned persons and in the absence of unanimous agreement on which of them should be the beneficiary of the subrogation, this is the order that must govern, taking into account the following exceptions :

– parents over 70 years of age are preferred over offspring; and

– between descendants and ascendants, the closest in degree should have preference, and between siblings, the one with a double relationship should have preference over the half-sibling.

Equality cases are resolved in this order:

– anyone with a disability level equal to or greater than 65%;

– who has greater family responsibilities; and

– the youngest descendant, the oldest ancestor or the youngest sibling.

It is the unanimous agreement – a simple or reinforced majority is not enough – that decides. There may be abuse of rights, a figure that frequently arises in cases of unanimity, in which someone does not want to give his consent to it, forcing other mechanisms.

In this case, subrogation escapes the ordinary mechanism of succession in legal relations:

– the tenant cannot designate his successor , because this legal relationship is not integrated into his inheritance;

– if the landlord receives several notifications from those who are considered beneficiaries, he also does not have the power to choose the subrogated person ;

– If there is a single beneficiary, this is the only one who can be subrogated and there is no right of substitution , nor possibility of transmission in favor of his/her own heirs.

Clarifications

1) If the tenant used the property as a family home and as a professional , the spouse who has lived in the rented property may be subrogated, without it being relevant for such purposes which is the most important purpose, whether as a family home or as a professional activity ( AP Madrid 18-1-99, EDJ 20639 ).

2) The cohabitation required for subrogation implies a situation of living together, with a continuous and permanent character. It is not broken by accidental temporary absences, but the intensity and frequency of these separations can cause the disappearance of the common bond ( AP Barcelona 3-2-05 , EDJ 18233 ). In the absence of cohabitation, the order of preference again recalls the need for family protection. Cohabitation may be in the current home or in a previous one.

3) In application of the thesis of joint ownership of both spouses on the lease, it has been understood that in these cases there would not be a genuine case of subrogation mortis causa of the lease agreement, but that, having disappeared due to death one of the holders of the agreed lease, the other spouse does not, in reality, have the need to take his place, since his joint ownership remains, this criterion being reinforced by the content of LAU art.12 s. and CC art.1320 ( AP Valencia 10-10-05, EDJ 211667 ).

Term

(LAU art.16.3)

The lease terminates if, within 3 months of the death of the tenant, the landlord does not receive written notification of the fact of death, with a death certificate and the identity of the subrogated party, who must indicate his relationship with the deceased and offer, where appropriate, initial proof that they meet the legal requirements for subrogation.

termination occurs , all those who could have succeeded the tenant are jointly liable for the payment of the rent for these 3 months, unless they have renounced their option by notifying the landlord in writing within the month following the death.

several notifications in a timely manner from the senders who claim to be beneficiaries of the subrogation, he may consider them jointly liable for the tenant’s own obligations, as long as they maintain their claim to be subrogated.

Notification is mandatory in order to continue exercising your rights, even if a unanimous decision is subsequently made to designate the beneficiary. However, this decision does not have to be made and notified during this 3-month period.

Clarifications

formal requirements be strictly complied with in order to understand that the subrogation has taken place, since, if the lease itself can be concluded without being subject to any form, it is not logical that something that is of lesser importance should be subject to formal rigor. What is relevant is that the landlord is aware that the subrogation has taken place, not whether or not written notification has been made. It is not a question of assessing the effects of the omission of the written form in that notification of the fact of the tenant’s death, but the very existence of the notification ( TS 27-9-21, EDJ 710009 ; 20-7-18, EDJ 524560 ).

Assignment by the tenant

(LAU art.8.1 )

The transfer implies the disassociation of the original tenant ( transferor ) and his replacement by another person ( assignee ), who takes over the position of the former vis-à-vis the landlord. The transferee is therefore affected by all the stipulations contained in the original contract, including the term.

It is not necessary to record the transfer in writing or any other formality.

Since the transfer is not prohibited from being onerous , the lessee may receive compensation for it. Likewise, the lessor may receive a premium.

Clarifications

1) The transfer implies the disassociation of the original lessee and his replacement by another person; while, the sublease (nº 710 ) supposes the subsistence of the lessee and the introduction of a third party in part of the leased object, without disassociation of the former.

2) Regarding the right of the landlord to terminate the contract due to unauthorized transfer, see no . 773 .

Consent 

Unconsented transfer gives the landlord the right to terminate the contract. In principle, consent must be in writing ( LAU art. 27.2.c ). However, it is understood that, if the landlord gives consent verbally, he cannot deny it or initiate termination of the contract, as this goes against the doctrine of own acts.

Consent is not required to be prior to the transfer; the contract may be transferred and the landlord may subsequently give his consent, but it is terminated by law if he does not accept the transfer.

The absence of consent should not be understood as a case of nullity or voidability , but rather as a case of the tenant overstepping his power of disposal over his own position, not producing effects against the landlord until, where appropriate, he gives his consent, tacitly or expressly.

In order to understand that a transfer has taken place, it is irrelevant whether it is for a fee or free of charge ( AP Barcelona 16-11-04, EDJ 226560 ; AP Madrid 19-6-17, EDJ 155001 ); whether the occupation of the property by the third party is carried out exclusively and exclusively or shared with the tenant; or in whole or in part ( AP Barcelona 16-3-17, EDJ 79853 ).

It is up to the tenant to prove the existence of consent ( AP León 24-11-03, EDJ 206364 ).

Clarifications

1) The mere knowledge of the landlord cannot be identified with the consent required by law, even when combined with the passivity of the latter, which may be due to various circumstances and admit different interpretations. Mere knowledge does not reach the category of an act expressive of the will to create or modify any right, and between it and the consent that must be accredited there is no precise and direct link referred to in CC art.1253 for the estimation of presumptions (AP Toledo 16-6-99, Rec 147/93).

2) It cannot be understood that there is a tacit consent derived from the transferee making the payment for the utilities of the property, nor the income for the payment of the rent in the landlord’s account ( AP Murcia 18-7-17, EDJ 184300 ).

3) The mere designation of the rented property as the registered office of an entity, without the entity actually having any activity in it, cannot be understood as an unconsented transfer of the lease ( TS 13-11-12, EDJ 248607 ; 5-2-13, EDJ 15625 ; 20-3-13, EDJ 46677 ).

4) The transfer of the contract subject to the suspensive condition that the landlord accepts it is not a cause for termination, since what has not come into existence cannot be terminated.

Sublease

(LAU art.8.2 )

Subletting involves the introduction of a third party into part of the rented property, with the tenant remaining in the original contract. It therefore implies that the property must continue to satisfy the tenant’s need for permanent housing.

The rented property can only be sublet partially and with the prior written consent of the landlord. The lack of consent entitles the landlord to terminate the lease agreement ( LAU art.27.2.c ).

The price of the sublease must be the same or lower than that of the lease, especially when partial sublease is permitted, but it can never exceed it: if a price higher than that of the lease is set, the subtenant or subtenants may request a reduction, since the waiver of this rule is not legally provided for.

Different partial subleases may subsist , provided that the tenant reserves a part of the property for himself, and that the price demanded from the subtenants does not exceed, in total, the rental price.

If the sublease is total and the tenant has to leave the property, it is considered an onerous transfer and contrary to the Law.

Subletting is regulated by the LAU , when the part of the subleased property is intended by the subtenant for permanent housing; if this condition is not met, it is regulated by what has been agreed between the parties.

The termination of the subtenant’s right occurs, in any case, when the right of the tenant who sublet it expires.

If the tenant resigns before the agreed term, the sublease is also terminated, given its accessory nature, without prejudice to any compensation for damages that may be applicable and the possible existence of a fraudulent agreement.

The subtenant is obliged against the landlord ( CC art.1551 s. ):

– for all acts relating to the use and maintenance of the rented property, in the manner agreed between the landlord and the tenant; and

– for the amount of the agreed price of the sublease pending payment at the time of the request, with advance payments not made in accordance with custom being considered for these purposes as not having been made.

In principle, the subtenant could in turn assign the sublease , in the same manner and with the same scope as if it were the tenant, since the rule does not exclude this possibility (Cuatrecasas, Fuentes Lojo).

Clarifications

1) The sublease cannot have a greater extension than that of the lease on which it depends, since it is a fundamental legal principle that derivative rights cannot go beyond the original rights ( TS 1-3-93, EDJ 1973 ; AP Castellón 3-12-01, EDJ 69451 ).

2) Regarding the right of the landlord to terminate the contract due to unauthorized subrogation, see No. 773 .

Termination and suspension of the contract

At the end of the contract, whether it ends due to the tenant’s withdrawal or due to the expiration of the term or because the right not to renew is exercised, it is advisable to make a written communication to the other party indicating the desire to terminate it, in this way it can be demonstrated that the notice periods established in each case have been complied with.

Clarifications

1) The change of the leased property and the substantial increase in rent, even though they are essential benefits of the contract , are not sufficient cause to consider it terminated if it is not accompanied by the expression of will of the parties in that sense ( TS 31-3-21, EDJ 520183 ).

2) It may be useful to sign a lease termination document that reflects whether or not there are any outstanding obligations and the powers of the parties regarding the deposit:

– if there are no outstanding obligations , the lease will be fully terminated with the signing of the termination agreement, at which time the landlord must return the deposit; and

– If there are outstanding obligations , it will be necessary to detail them in the termination agreement, establishing a complete regulation regarding quantification, deadline for compliance, obligations of the parties and consequences of non-compliance or, if possible, reach a transactional agreement for the quantification and complete release of the obligations.

A model for preparing such a document can be seen in no. 12070 s.

Tenant’s withdrawal

(LAU art.11 )

The tenant’s right to withdraw is subject to different conditions depending on whether it is exercised during the contractual term agreed by the parties or during any of the legal extensions, if any.

In any case, it is a discretionary right of the tenant, which does not require justification, regardless of the reason given ( AP Las Palmas 28-5-04, EDJ 60472 ).

Contractual term 

During the contractual term set by the parties, regardless of what this may be, once the first 6 months of the lease have passed, the tenant may leave the property without needing any cause, simply by notifying the landlord 30 days in advance of the departure date, whether or not this circumstance has been reflected in the contract.

The landlord cannot limit in the contract the tenant’s right to terminate the lease of a dwelling after the first 6 months have elapsed. This is a mandatory rule and is applied compulsorily, even if the contract states otherwise.

However, agreements that reduce the mandatory period, allowing the tenant to unilaterally withdraw before the first 6 months have elapsed, or that eliminate it completely, allowing withdrawal at any time, are perfectly valid.

communication must be made to the landlord is not established , so it is understood that any of them is possible, even verbally. However, for the tenant’s own interest, it is advisable to do so in such a way that there is proof that it has reached the landlord, and the date on which the content of the communication was made.

The fact that the landlord receives the communication and takes charge of the keys to the rented property cannot be understood as tacit acceptance or consent of the contractual resolution, nor that he acts against his own actions by exercising legal actions to claim the compensation that corresponds to him in accordance with the signed contract ( TS 20-7-11, EDJ 204892 ; AP Sta. Cruz de Tenerife 1-2-02, EDJ 8847 ).

For contracts signed between 1-1-1995 and 5-6-2013 , the treatment of withdrawal is different depending on the term agreed for the contract, but it does not matter if the withdrawal occurs during the contractual term or during one of the mandatory legal extensions. In reality, there was no right of withdrawal for the tenant as in the current regime, only, where applicable, the right not to extend the contract for another year until reaching the minimum of 5 years. Each contractual term or legal extension initiated was mandatory. The departure of the tenant without respecting this term gave rise to compensation in favor of the landlord.

For contracts with an agreed duration of more than 5 years , the tenant was not allowed to withdraw during the first 5 years. After this period, withdrawal is allowed, although with a minimum notice to the landlord of 2 months and a possible compensation equivalent to the current amount: one month’s rent for each year of the contract that remains to be fulfilled.

Notification

(LAU art.9.1)

form is required for notification, nor is it required to be authentic, nor is it even required to be in writing. Although it is a receptive declaration, which must be effectively received by the landlord to be effective ( AP Barcelona 25-4-18, EDJ 98906 ; AP Pontevedra 27-4-15, EDJ 75183 ), this does not imply that it can be conditioned to the will of the person affected, because, for example, he or she refuses to receive a burofax ( AP Baleares 25-7-17, EDJ 180638 ).

The 30-day period established by law is a minimum period, so that the tenant can notify it with greater notice if he has already decided not to continue with the contract ( AP Málaga 26-11-07, EDJ 314691 ). On the other hand, late notification does not have any resolutory effect ( AP Cáceres 31-1-05, EDJ 25074 ).

Compensation

If the tenant leaves before 6 months , given that this is the minimum period of time that the tenant must comply with, the landlord may require him to pay the rent until those 6 months have elapsed, as compensation for termination, in a single payment and without it having to be stated in the contract.

However, in these cases the generic limit of unjust enrichment would apply , so that no compensation would be possible from the moment that, within this period, the property was rented again.

Additionally, if the tenant leaves after 6 months , but before the end of the contract, the landlord may require the tenant to pay compensation for early termination:

• The possibility of compensation must be expressly contemplated in the contract ( AP Barcelona 1-9-08, EDJ 265753 ).
• The maximum amount is one month’s rent in force for each year remaining to be completed, accruing proportionally for periods of less than a year.

It is not possible to establish compensation greater than that legally established, it would be a null clause ( LAU art.6 ), although lower compensation may be agreed ( AP Barcelona 9-1-18, EDJ 4210 ).

Clarifications

1) The mere acceptance by the landlord of the unilateral termination of the contract by the tenant does not imply a termination by mutual agreement, which would require the concurrence of both wills to terminate the contract. Therefore, the mere acceptance by the landlord cannot exclude the consequences agreed in the contract in the event of the tenant’s withdrawal ( AP Barcelona 1-9-08, EDJ 265753 ).

2) When the tenant withdraws from the contract before the first 6 months have elapsed , the appropriate action is to compensate the landlord for any damages caused, although this is not expressly regulated in art. 11 of the LAU . Even more so, if the consequences of withdrawal during this period have been foreseen in the contract, the agreed penalty is fully applicable ( AP Baleares 24-1-18, EDJ 13815 ).

Example

1) In a contract with a duration of 1 year and a rent of €1,000 per month, in which the tenant leaves after 8 months, the compensation would reach €333.33

1,000/12 = €83.33

83.33 euros × 4 months = 333.33 €

2) In a contract signed for 3 years , with a rent of €1,000 per month in which the tenant leaves after 8 months, the compensation would reach €2,333.33

• For the proportional part of what remains to be fulfilled in the first year:

1,000/12 = €83.33

83.33 euros × 4 months = 333.33 €

• For the next 2 years:

1,000 euros × 2 = 2,000 €

Mandatory legal extension

In the legal extension periods, mandatory for the landlord and optional for the tenant, which make up the mandatory minimum legal term, in principle the tenant is no longer limited by the 6-month period to exercise the right of withdrawal, since he has already fulfilled said obligation and can make use of it at any time.

Thus, for example, in a contract that was signed for one year, during the second year following this – first legal extension – the tenant could leave whenever he wanted without having to wait for the 18 months to pass since the contract began, that is, the first 6 months of the second year.

 Compensation for early withdrawal

 As regards compensation for early withdrawal, expressly provided for in the contract:

– some authors understand that it is not applicable during extensions, since the initial term of the contract has already elapsed and the extension is something different that is not considered a term of the same; and

– for others, it is understood that, if the contract has provided for compensation, the landlord can demand it for the period of the second year that remains to be fulfilled. The beginning of the extension determines that the duration of the contract has been extended for a full year, so the compensation for withdrawal will be applicable in this new year, since the compensation is established “for each year of the contract that remains to be fulfilled” ( LAU art. 11 ), without making distinctions between initial duration or legal extension. Since the extension of the contract is for one year, it must be understood that an expectation of compliance for a full year has been generated in the landlord, so that, in the event of early withdrawal by the tenant, the compensation for withdrawal will have to be applied if it was provided for in the initial contract.

Clarifications

1) A common clause, perhaps inherited from regimes prior to the modification of the LAU art. 11 by Law 4/2013 , is the one that establishes that the first year is obligatory in all cases, establishing a certain penalty. This is a null clause (nº 440 ), since the LAU expressly establishes that the tenant has the right to terminate the contract at any time after the first 6 months have passed, and the penalty will always be limited to what the Law establishes.

2) The concept of current rent must include the updates already made and the increases due to improvements, but not future updates.

Marriage and cohabitation

(LAU art.12)

There is a specific case of withdrawal and expiration in the case of marriage or cohabitation of the tenant, when the couple separates from each other , and only the person who leaves the home appears in the contract as the tenant:

• In the event that the tenant expresses his/her desire not to renew the contract or to withdraw from it, the lease may continue for the benefit of said spouse, provided that the following requirements are met ( AP Barcelona 3-10-07, EDJ 245612 ):

– that the declaration of non-renewal or withdrawal has been made without the consent of the non-tenant partner;

– that this person lives with the tenant in the rented property; and

– that, should the landlord require him to state his intention regarding the lease, he should do so within 15 days.

If the answer is affirmative, only this person becomes a subrogated tenant in the contract, and the initial tenant disappears from the contract.

If the spouse does not reply within 15 days, the lease will be terminated, and the person remaining in the home must pay the rent until the termination of the contract, if it has not already been paid. The request is an option of the landlord who receives the withdrawal or non-renewal of the initial tenant ( LAU art. 12.2 ). If he does not do so, it can be understood that he tacitly gives his consent to the subrogation, and cannot terminate the contract for this reason (TS 25-6-13).

• If the tenant abandons the property without expressly stating that he or she will withdraw or not renew the lease, the lease may continue for the benefit of the spouse who lives with him or her, provided that, within one month of the abandonment, the landlord receives written notification from the spouse stating his or her desire to be a tenant.

If the contract is terminated due to lack of notification , the spouse is obliged to pay the rent corresponding to that month.

Both assumptions are equally applicable in favor of the person who had been living with the tenant on a permanent basis, in a relationship of affection similar to that of a spouse for at least 2 years prior to the withdrawal or abandonment, unless they have common offspring, in which case mere cohabitation is sufficient, without the need for a period of time.

Clarifications

1) The solutions provided by the LAU in cases of marital crisis , whether due to de facto separation ( LAU art.12 ) or due to the existence of a process of annulment, separation or divorce ( LAU art.15 ), refer to the abandonment of the home by the member of the couple who appears as the tenant, favoring the continuity in it of the one who is not, in protection of the family home; regardless of whether it is a case of withdrawal ( LAU art.11 ), non-renewal after the minimum legal term has elapsed ( LAU art.10 redacc L 12/2023) or waiver of the mandatory legal extension during the same ( LAU art.9 ).

2) The right of withdrawal granted by the law to the tenant in this case of marriage or cohabitation must always be understood within the right of withdrawal granted to the tenant by the LAU art.11 , it does not apply in cases that this does not allow ( AP Asturias 20-6-03, EDJ 178281 ).

3) The tenant who has not communicated the withdrawal or his will not to extend the contract, nor the continuation of the ex-partner with the lease does not release him from the payment of the rents , which can be claimed by the landlord, without prejudice to a possible action for repetition ( AP Las Palmas 16-1-14, EDJ 25939 ).

4) The mere manifestation of cohabitation as a couple does not constitute sufficient justification to continue the lease of the habitual residence after the tenant’s withdrawal when this circumstance is not proven ( TS 16-9-22, EDJ 689170 ).

Lack of habitability

(LAU art.26 )

When the execution of conservation works or works agreed by a competent authority in the rented dwelling make it uninhabitable, the tenant may choose to:

– suspend the contract; or

– withdraw from it, without any compensation.

The works must be carried out in the home, so there is no possibility of choosing whether they are carried out on the elements that are accessory to it.

The concept of rented housing must be understood in a broad sense, so it includes cases in which work is carried out in the building where the dwelling is located or in adjacent buildings. It is necessary, however, that as a result of said work the dwelling becomes uninhabitable.

It seems logical to think – in a systematic interpretation with the LAU art.21.2 -, that these must be conservation works that cannot be postponed until the end of the lease contract (no. 563 ).

The uninhabitability of the dwelling must be a consequence of the works being carried out. Therefore, the opposite case is excluded, that is, when the dwelling is uninhabitable and as a consequence of this the conservation works are carried out. In this last case we would be faced with compliance with the conservation obligations of the landlord towards the tenant (nº 565 ).

If the tenant chooses to suspend the contract until the completion of the works, the term of the contract is suspended and the obligation to pay the rent is suspended. This means that the duration of the works is not taken into account for the updating of the rent, termination of the contract due to the expiration of the term provided, etc. However, the suspension does not prevent the occurrence of other events , such as its termination due to the sale of the property, subrogation of the spouse, pre-emption and withdrawal, etc.

However, the power to suspend the contract and to stop paying the rent completely requires that the dwelling be completely uninhabitable; when it can continue to be inhabited by the tenant, he can only ask for a reduction in the price ( AP Barcelona 25-3-14, EDJ 155764 ; 27-5-15, EDJ 124370 ).

Clarifications

Regarding conservation and improvement works, which do not affect the habitability of the dwelling, see respectively no. 563 s. and no. 590 s.

Non-compliance

(LAU art.27 ; CC art.1124 )

Failure by either party to fulfill its obligations under the contract entitles the party fulfilling its obligations to:

– demand compliance with the obligation; or

– promote the termination of the contract.

However, even if compliance has been chosen, it is possible to later request a resolution if this is ultimately impossible.

In both cases, compensation for damages and payment of interest.

This cause for termination transfers to the leasing sphere the general rule applicable in the event of non-compliance with bilateral contracts; the LAU itself refers to CC art.1124 for its application.

However, only the breach by the parties of obligations that are essential, not accessory, gives rise to the termination of the contract (TS 30-11-65; 22-10-85; 10-5-89, EDJ 4858 ).

In addition to this general rule for bilateral contracts, the LAU lists a series of specific causes for termination, with the following characteristic notes:

– the performing party does not have the possibility of demanding forced performance;

– the resolution is by operation of law;

– the plaintiff does not have to prove compliance with his obligations; and

– the defendant cannot object to the plaintiff’s non-compliance.

As explained below, the termination in these terms may be requested by both the landlord (no. 765 ) and the tenant (no. 783 ).

Clarifications

1) The resolution mechanism provided by the legislator for the tenant is the same as that established for the landlord, that is, the tenant , in the event of non-compliance with any of its obligations by the landlord, may exercise the actions of the CC art.1124 , demanding its forced compliance or the termination of the contract, and, in addition, may request the termination by full right if the unfulfilled obligation is any of those specified in the LAU art.27.3 ( AP León 25-5-02, EDJ 49168 ).

2) In addition to the breaches specifically contemplated in the LAU, it would be possible, for example, to request the termination for the failure to present a guarantee or other additional guarantees or to maintain them during the term of the contract; or for keeping animals in the home when it has been prohibited in the contract ( AP Madrid 27-6-05, EDJ 193567 ; against, because it is not an essential condition, AP Barcelona 30-6-04, EDJ 95560 ).

Resolution at the request of the landlord

(LAU art.27.2 )

The landlord may terminate the contract by law for the reasons set out in the following numbers, taking into account that the termination requested under the same can only seek the termination of the contract. If its forced compliance is sought, it must be done through CC art.1124 .

Clarifications

The change of the lock by the owner of the property, without the consent of the tenant, constitutes a crime of coercion, which is not affected by the possibility that the tenant was breaching the lease contract, since, in his case, this should have been resolved with the judicial termination of the contract and not with the use of this criminally sanctioned de facto means ( TSJ Navarra 5-9-23, EDJ 722840 ).

Non-payment

(LAU art.27.2.a and b)

The contract may be terminated due to non-payment of the rent, the deposit or its update, or any amount that the tenant is required to pay for having assumed it in the contract (increase in rent due to improvements, general expenses, services, taxes, etc.).

Except in the case of suspension of payment due to lack of habitability (no. 750 ), the tenant cannot refuse to pay the rent and other amounts if the landlord has fulfilled his obligations.

For this cause for termination to apply, it is necessary that the landlord has not prevented payment and, where applicable, has collaborated by providing the receipt and attending the agreed place of payment or, failing that, the rented property.

Clarifications

The full payment of the rent for a dwelling, late and after the eviction claim has been filed, does not exclude the termination of the lease, or, where appropriate, the declaration of the eviction action as null and void, even if the claim is based on the non-payment of a single monthly rent, without the landlord being obliged to bear with the tenant’s ordinarily late payment of the periodic rents ( TS 27-3-14, EDJ 42774 ).

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Dismissal of eviction for non-payment of one month’s rent

(Actum 8/24, August 2024)

For the purposes of determining non-compliance with the payment obligation, the circumstances in each case must be taken into account to assess whether or not there has actually been a breach of contract.

 TS 23-7-24, EDJ 627504

The application of the jurisprudential doctrine that maintains that the payment of the rent out of term and after the eviction claim has been filed does not exclude the termination of the lease is an exception, even if the claim is based on the non-payment of a single monthly rent.

The Supreme Court states that this jurisprudence does not preclude the possibility that, for the purposes of determining the breach of the payment obligation, the specific circumstances concurrent in each case of litigation should not be considered in order to assess whether or not there has actually been a breach of contract. In this case:

• The non-payment refers to a single monthly rent.
• The fact that the tenant had been paying the agreed rent since 1983, the year in which the rental relationship began, with no record of previous non-payments .

small amount (less than 10 euros) missing from the account where the payment was made . The financial institution did not accept the overdraft nor did it inform the tenant of the return of the receipt.

• The tenant, elderly (82 years old) and with a slight memory impairment, and her husband, of whom she is a de facto caregiver and who lives with her in the disputed property, had serious health problems requiring hospitalization, a situation in which the defendant forgot to order the transfer of funds to pay the rent.
• When their relatives were informed of the situation, they immediately made a deposit of the unpaid rent and it has continued to be paid normally.
• The non-payment did not cause any harm to the creditor.

From this perspective of exceptional nature, it is considered that there is no breach of the lease agreement.

TS 23-7-24, EDJ 627504

Contracts registered in the Property Registry

(LAU art.27.4)

In contracts registered in the Property Registry in which it is agreed that non-payment of rent is cause for termination and immediate restitution of the property to the landlord, the termination takes place by operation of law, with the following requirements :

– the landlord must judicially or notarially require the tenant to do so at the address designated in the registration;

– the request must urge payment or compliance;

– The tenant has 10 days to respond. If he does not do so or responds by accepting the resolution as of right, through the same judge or notary who requested it, the resolution will be produced.

To carry out the cancellation in the Property Registry it is necessary:

– provide the title and the copy of the request, from which the notification results; and

– that the party required to pay has not responded or has accepted the resolution as of right.

If there are subsequent charges on the lease, in order to cancel them, it is also necessary to:

– justify the reliable notification to the holders of the same, at the address listed in the Registry;

– prove the deposit in his/her favor, before the same notary, of the security deposit provided by the tenant.

Unconsented sublease or transfer

(LAU art.27.2.c)

Both subletting and assignment require the written consent of the landlord; the lack of consent entitles the landlord to terminate the contract.

The existence of a sublease or transfer does not require direct proof . The mere presence in the rented property of a third party not affiliated with the contract, without a legitimate title justifying his occupation, is sufficient to presume and prove the existence of a sublease or transfer and give rise to the termination of the contract. To dispel the presumption, the tenant must justify the occupation of the property based on a legal or contractual title authorizing it.

However, there are cases in which the introduction of a third party into the leased property, without the express consent of the landlord, does not presuppose sublease or transfer :

– when it concerns third parties who are not part of the contract, but are part of the tenant’s family unit , or subject to his direction or authority and economically dependent on him, such as domestic service or employees;

– when it is integrated into a context of stable emotional marital coexistence ; and

– when it comes to relatives , because it is presumed that their presence is due to relationships of affection and of a gratuitous nature.

In these cases, the proof of the existence of a legal act of sublease or unauthorized transfer becomes the responsibility of the landlord, and the specific case must be analyzed ( AP Barcelona 29-10-01, EDJ 54803 ).

However, it is not legally admissible for relatives of the tenant to remain in the home when the tenant has definitively abandoned it , since in these cases their permanence is no longer covered by the contract ( AP Madrid 8-3-17, EDJ 50375 ).

Although assignment and sublease are different legal concepts, an exact qualification of the two is not necessary to terminate the lease contract due to the lack of consent of the landlord. Given the difficulty of knowing which of the two is occurring exactly, which the landlord may have, especially when the tenant will do everything possible to hide it from him, he can jointly and validly invoke the two causes for termination ( AP Toledo 16-6-99, EDJ 26006 ).

Clarifications

1) For the purposes of termination of the contract, the introduction of a third party into the dwelling is sufficient, outside of the cases provided for by law, without the landlord having given his consent (TS 23-12-57; 22-2-62; 17-6-88, EDJ 5246 ).

2) The establishment of a registered office in the same without actual occupation or use does not constitute a transfer of a dwelling and does not entail the termination of the contract ( TS 5-2-13, EDJ 15625 ; 20-3-13, EDJ 46677 ). However, it has also been understood that the creation of a commercial company by the tenant with registered office in the rented apartment without the consent of the landlord, implies the introduction of a third party into the dwelling, making it possible to terminate the contract due to unconsented subletting ( AP Madrid 16-6-00, EDJ 120019 ).

Damage caused intentionally and unauthorized works

(LAU art.27.2.d)

The landlord may terminate the contract by operation of law when the tenant has deliberately caused damage to the property or has carried out works not consented to by the landlord, in cases where such consent is necessary (No. 600 ).

Whether damages are considered intentional or culpable is a question of fact that must be assessed by the courts in each case. For this cause of termination to be successful, the landlord must prove the occurrence of this type of damage and that there is evidence that allows the tenant to be held responsible for the damage.

obligation to compensate for damages is not expressly established , but they may be demanded by virtue of the general reference made by the LAU art.27 to the CC art.1124 .

Clarifications

1) The tenant is responsible for any deterioration or loss of the rented property – unless he can prove that it was caused without his fault ( CC art.1563 )-, and for any deterioration caused by the people in his house ( CC art.1564 ). When the time comes for the termination of the contract, the tenant must return the property as he received it, except for anything that has perished or been damaged by time or by unavoidable causes ( CC art.1561 ). If there are any deteriorations or losses caused by the tenant, he must repair them, leaving the property in a condition to serve its intended use, so that the landlord can enjoy it or lease it to another person ( AP Baleares 10-5-02, EDJ 33662 ).

2) A cause for termination is a noticeable and evident change in the configuration of the premises , due to the long-lasting and stable construction of the works, without the possibility of returning to the previous state having the slightest impact on the cause for termination ( TS 11-7-88, EDJ 6057 ); the termination of the contract is not possible in the case of removable installations supported on the ground that can be easily removed without causing damage and without altering the configuration of the property ( AP Baleares 20-10-16, EDJ 211258 ).

Annoying, unhealthy, harmful, dangerous or illegal activities

(LAU art.27.2.e)

The landlord may terminate the contract if the tenant carries out activities in the rented property that are considered annoying, unhealthy, harmful, dangerous or illegal ( AP Barcelona 16-5-00, EDJ 54344 ). In this regard, the following must be taken into account:

1. a) The determination of an activity as annoying, uncomfortable, unhealthy or dangerous is the responsibility of the courts in each case, without it being necessary for the contractual resolution that such circumstances occur together, which constitutes a factual situation arising from the use of the thing.

1. b) These activities must be carried out inside the building in a noticeable manner , that is, there must be evidence and permanence of danger or discomfort (TS 20-4-67), so one or several specific, singular or determined acts that are more or less uncomfortable or annoying are not enough, but it is necessary, in addition to a certain intensity, that such acts belong to the same series and are carried out with a certain continuity.

1. c) There must be a specific passive subject who may be harmed by the uncomfortable, unhealthy or dangerous activity, this being the people who live or must remain in the same property and not undetermined or vague persons.

1. d) It is sufficient that the annoying and uncomfortable behavior is unpleasant for anyone who lives in the property or has to stay there, without it being necessary for it to be unbearable or intolerable, but it must represent a significant impact on peaceful coexistence.

1. e) The uncomfortable activity must cause social alarm in the surroundings of the home, and the person who alleges it must prove such alarm. Jurisprudence holds that what is notoriously uncomfortable is something that disturbs what is common in social relations.

Clarifications

1) In relation to these activities and the various case law analysed by the jurisprudence, see no . 8472 s. Memento Inmobiliario 2024.

2) In the event that the landlord allows the indicated activities and does not terminate the contract, the president of the community of owners may request its termination.

3) The possession by the tenant of the corresponding administrative licenses does not prevent the exercise of the resolution action by the landlord.

Destination of housing for other uses

(LAU art.27.2.f)

The landlord may terminate the lease when the dwelling is no longer primarily intended to satisfy the permanent housing needs of the tenant or his or her legally or de facto non-separated spouse or dependent child when he or she does not do so himself or herself ( LAU art.7 ).

There is no set period of time that must elapse before it can be understood that the dwelling is no longer inhabited, so it is up to the courts to determine this issue.

The exercise in the home of any of the activities indicated for leases for use other than housing (no. 1000 ) may be cause for termination only if the property ceases to be the tenant’s primary and permanent residence (no. 427 ).

Clarifications

An illness of the tenant justifies the vacating of the dwelling provided that it is foreseeable that within a reasonable period it will return to fulfilling its purpose as such ( AP Barcelona 16-3-17, EDJ 79853 ).

Termination at the request of the tenant

(LAU art.27.3 )

Repairs

In order for the landlord’s failure to carry out repairs to restore the home’s condition and habitability to be grounds for termination of the contract, it is necessary ( AP Madrid 12-4-16, EDJ 66305 ):

– that it is a fundamental breach;

– that there is sufficient evidence that there is a defect in the dwelling; and

– that the deficiencies determine the uninhabitability, it not being sufficient for these purposes that there is a need for repairs, if they do not prevent the use of the dwelling.

On the other hand, the tenant cannot terminate the contract for this reason if he has not previously fulfilled his obligation to inform the landlord, as soon as possible, of the need for repairs (No. 575 ).

Disturbance of use

Any disturbance, whether de facto or legal, carried out by the landlord in the use of the dwelling gives the tenant the possibility of terminating the contract. This derives from the landlord’s obligation to maintain the tenant in peaceful enjoyment of the lease for the entire duration of the contract, as well as from the good faith that must govern contractual relations ( CC art.1269 and 1554.3 ).

Although the LAU does not expressly contemplate the possibility of requiring the landlord to cease the disturbance, the reference to CC art.1124 allows the tenant to make such a demand and, in addition, to be compensated for the damages caused (no. 757 ).

Disturbances of rights must be put in relation to the termination of the landlord’s right (nº 675 ) and the alienation of the rented dwelling (nº 630 ), taking into account also that the rules relating to the sanitation in the sale ( CC art.1553 ) are applicable to leases . Among other cases, we can cite as an example :

– the prohibition by final resolution of using the dwelling for not complying with the minimum habitability requirements imposed by urban planning regulations; and

– the termination of the contract by a new owner pursuant to the application of LAU art.14 (no. 665 ).

Clarifications

1) The right of termination refers to the failure to comply with the obligation to carry out repairs, but cannot prosper if the execution of said works requires the authorization of a third party over which the owner has no control. The lease binds the landlord and the tenant, but nothing allows compliance to be imposed on persons outside that link, such as, for example, a community of owners on whose common elements the works are to be carried out ( TS 5-12-89, EDJ 10940 ).

2) The existence of an abnormal number of cockroaches that do not disappear despite the disinfection treatment, gives the tenant the right to terminate the contract ( AP Madrid 11-11-16, EDJ 227265 ).

3) The lessor is exempt from liability for the mere factual disturbance of a third party in the use of the leased property, and it is the lessee who has direct action against the disturber ( CC art.1560 ). However, if the third party acts by virtue of any right that corresponds to him, it is the lessor who must exercise the actions or perform the acts necessary to maintain the lessee in the peaceful enjoyment of the leased property (TS 10-6-85).

4) Failure to activate the supplies constitutes an essential breach that entitles the tenant to terminate the contract, since it prevents the peaceful use and enjoyment that the landlord must provide ( AP Toledo 29-4-14, EDJ 90268 ).

Extinction

(LAU art.28 )

The lease contract is terminated, among other causes , by:

– loss of the leased property due to causes not attributable to the landlord;

– a final declaration of ruin agreed by the competent authority; or

– termination of the landlord’s rights.

Other reasons for which the lease may be terminated include, for example, the death of the tenant, unless the subrogation in the contract occurs by those who have the right to do so (No. 687 ); or the alienation of a rented dwelling, when the lease is not registered in the Property Registry and the subrogation of the purchaser does not occur (No. 665 ).

Loss of the property

(LAU art.28.a)

The loss of the property as a cause for termination refers to the objective loss or destruction of the property, provided that it is not attributable to the landlord. In this case, the property must be understood as the dwelling, because this rule does not affect the situation of the rest of the property in any way. This loss may be total or partial.

Regarding the loss of the property, the cause does not matter . Therefore, the following would be included:

– cases of material or physical loss of the property, which occur as a result of a catastrophic event and instantaneous production or also as a result of significant deterioration, loss or damage; and

– cases of legal loss or loss due to the existence of regulations, or acts in execution of regulations, that prohibit or make impossible the use of the leased property in accordance with its intended purpose. This would be the case of compulsory expropriation, as it is a coercive deprivation of ownership.

The mere negligence of the landlord should only be relevant for the purposes of determining the possibility of demanding compensation for damages ( CC art.1101 ). Although the cause of the loss is directly attributable to the landlord, the tenant may terminate the contract for not fulfilling its obligation to keep the dwelling in habitable conditions for the agreed use (nº 750 ), beyond the termination due to loss of the property.

Clarifications

1) The loss of the leased property refers to those cases in which it effectively ceases to be habitable, thus failing to comply with the purpose pursued in the lease agreement, provided that this is not attributable to the landlord, who is obliged to act with due diligence by carrying out the necessary repairs to the leased property ( CC art.1554.2º and 3º ), to prevent it from deteriorating to the point of becoming uninhabitable ( AP Madrid 25-1-07, EDJ 63708 ).

2) Nothing prevents the suspension of the contract in the event of the loss of the building, provided that the parties agree on the obligation of the landlord to rebuild within a reasonable period and the reciprocal obligation of the tenant to take the property on lease. This agreement, however, seems more likely in leases for use other than housing (nº 1000 ff. ). 

Right of return

(LAU add.prov.8th)

When, in an urban development action , which does not involve expropriation, it is necessary to demolish or fully rehabilitate a building with preservation of the façade or structure, the tenants who might live there have the right to be provided with a new home by the landlord of the property :

– with a surface area not less than 50% of the previous one, provided that it is at least 90 m2 ;

– not less than the one they had, if it did not reach a surface area of 90 m 2 ;

– with characteristics similar to that one; and

– located on the same site or in the surroundings of the demolished or rehabilitated building.

This right is held by the tenant regardless of the date of the lease.

Firm declaration of ruin

(LAU art.28.b)

The ruin of a property is considered to have occurred when the cost of reconstruction exceeds 50% of its value at the time of the incident, unless the excess cost is covered by insurance ( LPH art.23.1 ).

The declaration must be agreed by the competent authority according to administrative regulations and must be final, that is, not subject to appeal.

It is not up to the civil judge to examine the underlying reasons for the administrative procedure , since the declaration of ruin is not within his jurisdiction. If the declaration of ruin is final and has been issued by the competent authority, the judge cannot do anything other than decree the termination of the contract (Loscertales).

The jurisprudence has stated the following regarding this issue ( TS 23-7-01, EDJ 32331 ):

• Neither the mere declaration of ruin nor the mere inclusion of the property in the Land Registry produces the termination of the leases. It is understood to have been carried out when, once the property has been registered in the Municipal Land Registry, its alienation occurs, or the building license is granted.
• If the landlord has made use of the right to terminate the lease, the tenant has the right to compensation in accordance with urban leasing legislation, and it is up to the civil jurisdiction to resolve any conflicts between the landlord and tenant.

Clarifications

The ruin is the subject of study in no. 1643 Memento Inmobiliario 2024.

Resolution of the landlord’s right

For contracts signed after 6-3-2019, the termination of the landlord’s right does not necessarily imply the termination of the contract, as it had been until then, but rather a modification of its ownership.

From this point of view, a detailed study of the effects that this resolution has on the lease, depending on the date of the contract, is carried out in no. 675 s.