Spanish property rental laws – have you noticed the difference?

July 6, 2011

Had you noticed that overseas property-letting laws are different in Spain?

It is all very well buying that buy-to-let property abroad, because it is going to generate better returns than a similar UK buy-to-let, but what about the practicalities of renting out?

It is stating the obvious, that buying property overseas is different from buying in the UK. It is an oft overlooked fact that so is the process of renting out.

Evidently, it is universal good practice check out a prospective tenant, to help ensure a landlord gets the “right” tenant in in the first place and thereby avoiding the hassle of a troublesome tenant. This is just as true for a landlord abroad, as it is in the UK. But here are some of the differences…..

Renting out property in Spain

Property owners have less rights when letting out property on a long term, residential basis in Spain, than on a shorter term let.

Spanish Law provides greater protection for renters of a “home” and tries to provide permanence to family units, as opposed to a “seasonal” contract, which has more of a temporary nature.

Many landlords try to rent out for 11 months maximum, or try to do short term holiday lets, or have a “temporary” contract, to protect themselves. However, under Spanish Law, what makes a contract a “seasonal” or a permanent “home” contract is not necessarily the time agreed, but the intention. So the nature of the contract needs to be explicitly stated.

A contract can be signed with a rental period of 3 months or 11, and, if it is not explicitly mentioned that it is a seasonal contract, once the time period expires, the tenant will immediately have rights for the extension of the rental contract for a year more. This right can continue for 5 years.

If the contract is not correctly set up, one way to deal with a difficult tenant, would be if the landlord, or a descendant needed the house for living purposes, which would have to be proved.

On the other hand, by using a contract for 2 years that states it is a “Seasonal” contract, once the 2 year period is over, the contract obligations are all over.

In 2009, the law changed a bit to help owners. If the landlord states at the beginning of the contract, that they will need to use the house within 5 years (this also applies to the owner´s children and parents, adopted children, and spouse) then it is easier to get control of the property back. However, the house does then need to be occupied by a family member.

Spain – Holiday Home Letting Licences

What’s more, property owners should be aware, a Holiday Let Licence is required to let out a property in some parts of Spain. The picture is confusing as the regional laws differ, as do the levels of enforcement in the regions.

As a general rule a buyer should check with a local lawyer if a Letting Licence is required from the Local Tourist Authority, to let to Tourists, as the picture varies so much. For longer term lets the picture may be entirely different, as a property owner can simply let to “family”, which may be exempt from any Licensing requirement.

There are some specific Spanish Regions (Comunidad Autónoma) that have detailed requirements to be met for Holiday Homes: Baleares, Murcia, Asturias and Pais Vasco.

For example, in  the region of Murcia, if an owner promotes an apartment for rent, or rents it twice or more, a year, for a period, which exceeds one month in each year, then the owner needs to register with the corresponding Regional Authorities in Murcia.

In the Andalucian Region,  where National legislation is enforceable, (no Regional Law has been developed), informing the local government of plans to rent out a property, seems to be all that is required, to comply with the General Tourism Act of 1999.

So you have heard of the need to take independent legal advice when buying property abroad. It might be as well to get a legal eye to check over your rental arrangements too, if this is a serious let.

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The focus is mainly greater Europe: Poland property, UK investments, Spain property, Turkey property, Cyprus property

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