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The Spanish rental law “Ley de Arrendamientos Urbanos” (LAU), was modified on March 05, 2019

Posted by inm on 2019-04-26
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From now on, the signed lease agreements must be based on the rental law reform, which was implemented by the Government of Pedro Sánchez by the Royal Decree 7/2019 of 1st of March 2019.

These are the most important changes:

• 5 years mandatory renewal period on long-term rentals for natural persons. 7 years mandatory rental period on long-term rentals for legal entities.

• After the deadline, the silent renewal period for natural persons and legal entities are no longer one year, but three years each. Landlords must now give a 4-month notice, tenants 2-month notice.

• The necessity clause must now be expressly worded into the contract to be triggered by a landlord. This clause legally allowed landlords to cancel long-term contracts ahead of the agreed duration.

• All contracts will now be updated to bring them in line with inflation, referred to the IPC index as benchmark reference during the first 5 years and can no longer be freely agreed. However, this only applies if it has been contractually agreed.

• The deposit is still at least one month’s rent, with a maximum of three months of rent. This does not apply to contracts with a rental period of more than the legal minimum term (longer than five or seven years).

• Property buyers must respect the whole duration of pre-existing long term lease agreements, even if they are not registered at the Land Registry. (Registro de la Propiedad).

• Legal entities acting as landlords will pay the commission to estate agencies on tenancy agreements and legal costs of drafting up a contract.

The law also stipulates that a rent index will be created this year to regulate the rent level.

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