Rights and obligations of landlords under Spanish rental law - part 1
As a landlord you have specific obligations and you also have some rights under Spanish law when you let a property. What exactly are these obligations and rights? In this first part I will discuss these rights under Spanish law.
In the second part the obligations. Although these rights and obligations are not exhaustive, it will give you an idea of what to expect if you are going to let your property.
1. The right to ask for a reservation.
As a landlord you can ask for a certain amount of money if a tenant is interested and you haven't signed a rental contract yet. In this respect you are asking for some financial security that the tenant will proceed. This amount of money is called a reservation (reserva). In this respect you draft a pre-contract. Please note that the pre-contract should meet some requirements to avoid discussion:
- the rent payable by the tenant in the near future.
- the amount paid for the reservation.
- the expiry date of the reservation, or what is the last date to sign the rental contract.
- identification of landlord, tenant and property.
- compensation or penalty if one of the parties does not proceed with the contract.
- other conditions that will govern the future rent.
2. The right to create an Inventory.
The inventory (inventario) is a list of everything that a landlord provides with the property, for example furniture, carpets, curtains and appliances. It normally describes in detail the condition of the property and all items within it. It forms part of the contract and should be an annex at the end of the rental contract. It is a key document for the landlord. Without a good inventory it will be more complicated to claim compensation for damage. When an inventory is done correctly, it is easier to prove claims and ask for compensation for items either damaged during the tenancy or not properly looked after.
An inventory records both the belongings and the condition of use of certain elements of the building. For example, in a bathroom with no ventilation, you may include in the inventory that it is advisable to keep the door open to prevent vapor condensation that deteriorates the ceiling paint. Although it is not easy, it is also useful to include the costs of the specified items in the inventory.
Inventory reports can include photos of each room and the items which make it easier on check out to compare the state of the property at the beginning and the end of the contract. This should include any relevant outside areas too.
3. Right to increase the rent.
An increase (or revision) of the rent can be carried out a year after the start date of the contract and every year after that as long as the contract mentions this. When the contract does not say anything about reviewing the rent, then the landlord cannot increase it.
If, however, there’s a clause in the rental contract to this effect, in principle it will follow the Indice de Garantía de Competividad (ICG). This index determines how much rent you can increase it by. It measures specific factors to determine the prosperity of citizens and is used within the Eurozone. Of course you can also agree upon another index, such as the Consumer Price Index, as long as this is specified in the contract.
The rent must be paid within the first 7 days of the month. If the tenant fails to pay by the 7th day of the month, the landlord can claim the rent in legal proceedings and request for eviction (desahucio). When a tenant fails to pay the rent, act immediately. Do not wait. Send the tenant a certified demand for payment as soon soon as he is even two weeks late with the rent. This can be a burofax, which is delivered by the Spanish Post Office. Then try to reach a friendly agreement with the tenant.
Although proceedings are shorter than before, they may still take several months, before you have the legal right to carry out an eviction.
According to Spanish law, the landlord may ask for a compensation of one month's rent for every year left on the contract, if they vacate early and when this has been agreed upon in the contract. This means, for example, that if the tenant will leave within the first year of the rental contract, the landlord may ask a compensation of one month's rent. If the rental contract has been extended for further years, and the tenant wants to leave during this term, the landlord may ask two month's rent in the second year and even three month's rent in the third year. Please note that many tenants do no agree with this compensation scheme.
6. Right to claim the property because you want to live in it at once.
If the rental contract has been agreed upon for less than 3 years, as a landlord you can claim your property after one year for your own use, or for your family (for example if your children need a house or if you get divorced). As a landlord you must give at least 2 months notice to the tenant if you plan to use this right.
In the next part of this article I will discuss some obligations landlords have. This list of rights of landlords is not exhaustive. However, if you miss a specific right you think that should be mentioned, please contact me.
© Lilian Hermans - Quilantro