Whether you are a Landlord wishing to Let or a Tenant eager to Rent, the law in Spain has strict regulations surrounding the whole process and your awareness of these laws will help ensure you get the results you desire. We hope you will find the following information useful when renting your home.

Long Term Contracts

If you want to rent in Spain, usually for a year or more, you will have different rights than a shot term tenant. Whether the contract is written in your own language or not it will still hold up in a Spanish court (once translated) and is classed as a legal document in Spain. Under the Law the tenant is often afforded more protection than the landlord. The present law provides that residential contracts, distinct from shortterm holiday lets, are subject to yearly renewals up to five years.
Rental contracts are usually made for one year but the law requires that the contract is renewable for a total five-year period of tenancy. The Tenant can renew the contract if they so wish. If the landlord refuses to renew the contract and requested eviction,
the tenant can apply to the court claiming an extension. The court can extended the contract to a maximum period of five years.
The Rent may be increased during a long term contract by an inflationary amount yearly, however, once the 5 year period has expired, the Landlord may increase the rent as he sees fit. An additional right acquired by a long-term tenant is the right of first refusal when the property is put upfor sale. If the landlord wishes to sell the property, he is required by law to offer it first to the long-term tenant. He should do this in writing, stating the price and conditions of the sale. If the tenant does not reply in a reasonable period of time, or if he refuses the offer, the landlord is then free to sell the property to anyone he chooses.
If the landlord sells the property without informing the tenant in advance, the tenant has the right to have the sale annulled and to then proceed with the purchase at the price declared on the rescinded sales contract. If you have a five-year vivienda contract and your landlord wishes to terminate your rental at the end of the period, he is obliged to notify you officially by
a notarised letter one month before the end of the period. If he does not notify you officially, the contract can be regarded as renewed for two years and for the same rent, if you so wish. Rentals without Contracts If a Landlord will not provide you a contract for any period of rental, this is not as much of problem as you would think. If you have paid for the period using a Cheque or bank transfer, this would be presentable in court and act as an implicit contract. Try to gain receipts for payments made as this will bolster your position should a problem arise. Registering the Contract   As a Landlord you can register your contract with the Spanish housing Dept, this will provide you with easier access to the Law should an issue arise. In practice, many foreign Landlords choose not to take this approach as they often will not be declaring fully their tax obligations.
If you do not register the rental contract, you will still have a valid legal document however only registered contracts have the full protection of the law.

Inventory

The inventory is an important document in respect to both Landlord and tenant. This document will support any claim for compensation in relation to damage and will be the basis for claims made against the deposit upon termination of the contract.
The Landlord is responsible for preparing the document and should take time in doing so. It should be full and comprehensive, detailing all items, stating condition and quantities. It is often advisable to breakdown the inventory on a room by room basis supporting entries made with photographs. The Landlord needs to get the Inventory signed on each page. Signatures should also be obtained on supporting Photographs and each document dated. The Tenant should not sign any document or part
with any money prior to approving the inventory. Time should be made to allow a thorough examination of the property and its contents, enabling confirmation of condition and quantity of all items listed. When you sign the Inventory, you are creating
a legal document that will substantiate claims against you in a court.

Deposits

The Landlord will ask for a deposit, usually a month’s rent on residential property and two months on commercial, this deposit can be placed   with an agency independent of both the landlord and tenant (Housing dept of the local Government). Though it is common practice, it is never a good idea to pay the deposit directly into the landlord’s account, as he is then in control over the deposit and whether to release it or not at the end of the term. The current letting law establishes the landlord’s right to hold a deposit as guarantee against damages.

Community Fees

Long-term contracts often contain provisions requiring the tenant to pay community fees, the dues charged each year by the property owners’ collective for that block of flats, and even the real estate taxes, known as the IBI. An owner is within his rights to make such a contract, but you should be wary and know what you are getting into. Such extra charges can add up.   furthermore, clauses obliging the tenant to pay the community fees and real estate taxes are considered abusive under
Spanish law and you can protest if you choose, even after you have signed the contract.

Eviction

  There are several reason for which a Tenant may be evicted form a dwelling these include but are not limited to, failure to pay the rent (courts have often ruled that arrears must exceed six months before any action can be taken), damage done to the property, use of the property for immoral purposes, subletting without permission from the owner, causing a serious nuisance to neighbours, fraudulent activity and using the premises for unsuitable activities. In all cases of forced eviction a court order must be obtained against the tenant and often takes many months.

Tenants Complaints
The Oficina Municipal de Informacion (O.M.I.C.) handles consumer complaints and would be a good starting point to voice your grievance. They can be found in all major towns across Spain. Tax The tax rate on rental income is either 25% or 35%
depending on whether or not you are deemed to be a permanent resident in Spain. An oddity of the tax system is your tax liability as a Landlord should be paid by the tenant. They are responsible for paying your Tax by way of a deduction
from the total rental amount (tax retentions). Landlords should insist on proof that the tax payment has been made on their behalf and also get copies of Passports, NIE numbers and other documentation to trace the tenant should they disappear.
Any income from rent received in Spain by non-residents is subject to a payment of a flat rate of 25%. Even if the property is not rented, owners are still liable for the income tax, calculated on deemed letting income, this is currently at the rate of 2% of
20% of the official property value. If the tenant pays the rent in a currency other than Euro, the income derived from property in Spain is still subject to Spanish tax and the same process stated above should still apply. Any interest payable on loans associated with the property is not allowable against rental income, even though UK tax is due on the income if you
are a UK resident. There is a treaty with Spain that states Spanish taxes paid are to be offset against tax in the UK.