In Spain, landlords and tenants are free to agree the length of long-term rental contracts for properties used as a primary residence.
If the agreed rental period is for less than three years, the contract is automatically renewed upon expiry for the same period as the original duration for up to three additional years, unless the tenant decides not to renew.
The landlord is obliged to accept renewal, unless the original contract states they intend to recover the property for their own use. At the end of the three-year term, the landlord can terminate the contract, if they have provided notice in writing 30 days before the contract ends. If not, the contract will be renewed automatically for an additional year, unless the tenant decides not to renew.
If the tenant wishes to rescind the contract before the agreed period expires (although this is not possible before the first six months have elapsed), the penalty due to the landlord is one month’s rent for every year agreed in the original contract that has not been completed. Tenants are no longer under the obligation, as they were previously, to pay all the rent owing until the end of the originally agreed period.
Different rules apply to properties that are rented as a second home, offering less protection for tenants.
Any short- or long-term rental contract should include the following: identity details of both landlord and tenant, address and description of the property (including its condition), duration of the contract, agreed rent and terms of payment, conditions of late payment, details of any other costs and which party is responsible for them, any other agreements made between the parties, such as the right to sublet, and the jurisdiction under which any contractual disputes should be settled.
In general, most rental contracts in Spain are private contracts, but they may be signed in front of a notary and registered with the Land Registry, if either party wishes.
Terminating a tenancy
Upon termination of the contract, the tenant must return the property to the landlord in the same condition as when he or she received possession. At the same time, the landlord must return the deposit to the tenant, minus any costs for repairs or damage incurred during the tenancy.
You should ask the landlord to inspect the state of the property at least 15 days prior to your intended date of exit and arrange a final reading of utilities for the same date. This should give you a chance to discuss any work that needs doing and have time to complete this, if required.
The costs of any painting or other work required prior to return, or the replacement of missing or broken items on the inventory, are the responsibility of the tenant and may be discounted from the deposit before return at the landlord’s discretion.
You should request the landlord return your deposit on the same day you hand over possession of the property but landlords can legally retain the deposit to conduct repairs, as necessary. If the landlord has not returned your deposit within one month after termination, you are entitled to charge interest on the amount pending.
Sale of the property
Under Spanish law, buyers of property rented by a tenant under a long-term contract as a primary residence are not obliged to respect the terms of an existing rental contract if this has not been registered with the Land Registry and they were not aware of it at the time of purchase.
As a result, we recommend tenants register long-term rental contracts, although doing so will incur some costs (notary and Land Registry fees.)