The duration of the lease of a house in Spain depends on the agreement made between the landlord and the tenant. At present, it’s normal to sign for one year with the possibility of voluntarily extending it later for up to three years. However, you can also sign a three-year contract directly and be done with it. The only thing that changes are the rights and obligations of both parties to the contract.
With the latest amendment to the Urban Leasing Act (Ley de Arrendamientos Urbanos or LAU) in 2013, the mandatory extension length for rental contracts decreased from five to three years. Spanish landlords can only cut short this extension once the first year of rent has elapsed, and if they need the house for their own use or for first-degree relatives and spouses who get the property in a separation, divorce or marriage annulment.
More and more landlords and tenants looking to have more housing secuirty are choosing to sign three-year contracts. But what do the three years mean for the landlord and tenant? Pelayo de Salvador, a partner in DeSalvador Real Estate Lawyers, answers this question:
How does a three-year contract affect the landlord in Spain?
The positive side is that it means more stability because the tenant agrees to stay in the apartment for at least three years. If the tenant wants to leave before the three years, the landlord can charge more compensation than if it had been signed for a year with the option to extend.
In addition, the possibility of evicting the tenant in the event of non-compliance with the lease agreement is the same.
On the other hand, the landlord must give up claiming the house for their own use. This can only be done when the contract extension comes into operation.
How does a three-year contract affect the tenant in Spain?
A tenant who rents a property in Spain can negotiate a lower rental price by assuring the landlord that they will stay for at least three years. Renters also have greater stability and more peace of mind, because the landlord will not claim the house for their own usage.
What’s more, the tenant has the right to withdraw from the contract after the first six months have elapsed, so the 3-year term doesn’t necessarily oblige the tenant to stay for the full period.
The downside for the tenant is that if they leave the house before the three years are up, they will have to pay more compensation to the landlord. However, you can always negotiate the amount of the with the landlord.
From the original Spanish article: ¿Debes firmar tu contrato de alquiler por 1 año o por 3? (Enalquiler)
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