Spain: Spanish rental laws - Peter Esders, Chebsey & Co

Spanish rental laws

I was speaking to my colleague the other day about a new law that has been introduced in Spain regarding long term rentals. On the face of it the law looks like a positive step and one which will redress the balance of power more in favour of the landlord – something which is well overdue.

In the past Spanish rental laws were heavily biased towards the tenant. It can be very difficult to get a tenant out of the property as they can have automatic rights to extend contracts up to a period of 5 years. Even if a tenant doesn’t pay the rent it can be difficult to get them out of your property within a reasonable amount of time because the procedure is cumbersome and bureaucratic. The new law aims to redress this balance and has introduced measures which in theory should make things easier and quicker for the landlord whilst still preserving the basic rights of the tenant

So what does the new law do? Well, for a start it reduces the time that the landlord needs to wait after demanding the rent before starting eviction proceedings from two months to one month. Percentage wise this is a huge difference (although the sceptical amongst us realise that statistics can be presented in different ways to prove different points). The new law also changes the procedure for evicting a tenant and in theory makes it much easier and quicker to remove a tenant that hasn’t been paying rent.

Another change is that in the past if you owned a property which was rented out you could give notice to the tenant if you wished to use the property for your own use. The new law changes this and allows the landlord to give notice if either he, his parents, his children or his spouse wish to use the property.

So far this all looks like good stuff for the landlord. In addition to this a law abiding tenant who pays his rent the law shouldn’t have any unnecessary problems as a consequence of the new law either. So why was my colleague negative about the matter? Simply because his view is that any law is only as good as the courts that enforce that law. His view is that even though in theory the process should be much quicker he feels that the courts in Spain are so busy and slow and have so little power that in reality he can’t see much changing. All sorts of clichés spring to mind. “You are only as good as the weakest link in the chain.” “A convoy can only move as fast as the slowest vehicle.” Etc etc.

So what will this new law mean to the Spanish property market? Well, until the new law gets tested and settles down and we can see what happens in real life this will depend on how people feel. Those people who see the glass half full will have more confidence in the buy-to-let market and may start to look at properties for long term rental rather than mainly for short term rental. This in turn may open up geographical areas of Spain that overseas investors had not previously thought of. On the other hand, those people who see the glass as being half empty will see no change at all and won’t believe that the new law will make any difference.

So is my colleague right to be sceptical about this new law or will the courts move at a pace which allows the new law to have some real impact? Only time will tell. One thing that I do know is that anything that can be done to stimulate the Spanish property market and the economy has got to be a good thing and hopefully this a step, no matter how small, in the right direction.

Peter Esders

Peter is a UK Solicitor who studied Spanish law in Spain and who has been dealing with Spanish law for over 15 years. He can be contacted at Chebsey & Co, 51 London End, Beaconsfield, HP9 2HW www.chebsey.com Tel; 01494 670440