It is in times of uncertainty and crisis that scams become more and more evident, with many people in many areas breaking the rules and laws for their own benefit. This is something that is true in the case of the rental market in Spain and is a problem that is being accelerated by the coronavirus crisis.
This is the conclusion that has been reached by ANA (Agencia Negociadora del Alquiler) or the Rental Negotiation Agency in Spain, where the experts state that they have detected a "considerable increase in tenants and property owners who, in these exceptional circumstances generated by the COVID-19 pandemic, are trying to find shortcuts to bypass or directly violate the Urban Leasing Law (LAU)".
In order to avoid problems, the company led by José Ramón Zurdo has decided to summarise in a recent study what the most frequent 'malpractices' of landlords and tenants in Spain, are and how these result in a breach of the rental contract.
Frequent breaches by landlords
Requesting more than two months of additional guarantees
The study explains that it is common for owners in Spain who rent out property, faced with the fear of non-payment, to want to secure as much of the rent as possible from the outset and as a consequence, landlords often ask for more than two months of additional guarantees from tenants.
This practice is contrary to the last reform of the LAU, through the RD 7/2019 from 1st March, which limits additional guarantees to a maximum of two monthly payments. However, landlords can demand more than two months' rent as additional guarantees if the rental is intended for a long duration, that is to say, more than five years or more than seven years in the case of landlords that are legal entities.
Preventing extensions up to 5 years
According to the latest LAU reform, tenants have the right to stay in a rented property for up to 5 years. Some landlords use certain tricks to get the property back by claiming false causes of need, either for themselves or for close relatives. There is also the possibility of repossession through legal channels.
Using residential rentals as if they were tourist rentals
This is the case of landlords with housing that was intended for seasonal rental and who, in order not to be obliged to comply with the five years that tenants have the right to remain in the housing, make rental contracts of a duration normally less than a year in order to later recover the property and leave the tenant without his or her right to extension. "If the tenants prove that the purpose of the rental was to reside habitually and permanently, then the contract automatically becomes a housing rental contract, regulated by the LAU, and not a tourist rental", clarifies the ANA.
Exploitation of subsidised (protected) housing
Landlords are also known to bend and break the rules when it comes to renting out protected or subsidised housing in Spain (more often known as VPO, VPP, VPT, etc...), especially when they reserve the storage rooms in the property in order to keep their belongings, for example. But, as the study points out, "housing storage rooms are inseparable from each other and must be handed over to the tenants".
Frequent breaches by tenants
Non-payment of rent
ANA stresses that "unfortunately, late payment is the main contractual default when it comes to renting property in Spain. And the causes are quite different: on the one hand, those of 'professional defaulters' who intentionally do not pay their rent or who believe they have the right not to pay the rent, and take advantage mainly of private owners or companies in the sector with little or no experience. On the other hand, there are tenants who are willing to pay but cannot afford to pay the rent, for example, because they have become unemployed. In this last case of defaulting, normally a private landlord does not have the financial capacity necessary to give a professional solution to this situation".
Since the beginning of the pandemic, defaulting on rental payments has been on the rise among private owners, "without the experience in selecting and managing tenants and rental properties", adds the experts at ANA.
Deterioration of housing: damage and maintenance of the property
In addition to non-payment, the second most common breach of contract is where there is significant damage to a property or poor maintenance. In these cases, the owner receives the property in a bad state, which is worse or much worse than when he or she initially rented it out, a situation that should not be confused with the deterioration caused by the passing of time or the natural wear and tear of a property.
Using the deposit as a month's rent
Article 36 of the LAU regulates everything that has to do with rental deposits in Spain, but in no case does it authorise the tenant to use this deposit to cover one month's rent. Therefore, the study insists that "this is an illegal and widespread use among many tenants, who fear that the owner will not return the deposit, and replace the last month's payment with the amount of the deposit". Regarding the return of the deposit, the LAU states in Article 36.4 that the balance will be returned to the tenant at the end of the lease within one month of handing over the keys to the property.
The tenant leaves before the end of the contract
This is another common issue among tenants in Spain, who consider it a right to leave the dwelling whenever they want, and therefore are not subject to any sort of fine, and if this happens, and they are given a financial penalty, they consider it totally unfair. However, ANA reminds us that "this assumption is only true if the rental contract does not explicitly state the penalty when the tenant terminates the contract early".
On the other hand, if this penalty does appear in the contract, and the tenant abandons the property after 6 months, notifying the owner 30 days in advance, he will have a maximum penalty equivalent to one month's rent for each year of the contract remaining to be fulfilled, and for periods of time less than a year, the proportional part of the compensation. If the 30-day notice is not given, then an additional fine may also be applied.
Housing an additional person
It is a widespread practice in many housing leases, "when the tenants include decides to house one or more adults permanently in the property without communicating this to the landlord and therefore without the obligatory inclusion in the rental contract. This practice can cause many problems for the landlord, since the person, of legal age, who now lives in the dwelling and is not included in the rental contract, is exempt from all contractual obligations, from the payment of rent, the duration of the contract, repairs...", explains the study.