LAU - Law

LAU – Law the Spanish renting law

LAU is abbreviated for "Ley de Arrendamientos Urbanos", which is the new spanish renting law.

The revised form, which has been in existance since november 1994, also protects the hirer. In the old version this was hardly or not the case at all. This resulted in rare long-term rentings from private owners. The amendment now even facilitates the hirer to arrange all hiring contracts before May, 9th 1985, according to the new law.

Please note the changes 4/2013 in tenancy!

Here you find latest information which amend spanish LAU

In the amendment there are also changes concerning the term of lease: The minimum duration increased; now the tenant can count on a certain security regarding the contract-sustainment. But the renewal-period is restricted, so the owner has the access to the aproperty after a definite period of time.

Especially in the popular coastal regions and on the Spanish islands, the owners conclude longterm contracts only unwillinigly. In many cases they try to circumvent the rental law through catanerian – contracts. The term of lease is often restricted to summer – or winter months, because the owners can charge the tourists a much higher weekly rate during the few "holiday- months“. Consequently, they have the same (or even higher) revenue then renting out the whole year.

The LAU differs in long-term tenancies and other kinds of tenancies. The latter include seasonal hiring contracts (holiday or short-term rentings), hiring contracts for the second home or hiring contracts for luxury properties (more than 300 sqm living area), and with a house rent, respectively more than 5.5-times the statutory minimum wage (currently 451,20 Euro per month). Also included are tenancies, not refering to housing space, e.g. renting offices, garages, class rooms etc. The renting of furnitures, storerooms, garages, parking space, etc. also belong to the appartment tenancy. The following terms are determined in LAU:

Duration of the rental agreement

clause II, chapter I, article 6 bis 16

1. The parties can agree on the term of lease freely. However, if it is less than 5 years the hiring contract renews automatically every year up to five years after the end of the contract.

2. After the expiration of the first five years the owner is allowed to cancel the contract. If he doesn´t cancel the tenancy, it annualy renews automatically every year for max. 3 more years.

3. On the other hand the tenant may cancel the contract within the first five years unless the contract is set for 5 years from the beginning.

4. If the owner heralds before the conclusion of the contract, because he wants to live in the hiring object himself, the contract will end at this date. After that, he himself has to move in, otherwise the tenant can claim for compensation.

5. If the tenant dies before the end of the contract the direct relatives, the partner and also other relatives, can take over the hiring contract. But this person has to have been living in the property for the last two years.The person, who wants to assert one's claim to the object, has to hand in a written note to the owner within three months after the dead of the tenant. If nobody reports, or if the tenant had been living alone, the rental agreement expires.

Change of ownership

chapter II article 14 and chapter III, article 25

1. The change of ownership does not influence the established tenancy. With the bargin of the hiring object the purchaser (the new owner) assumes the rights and liabilities from the seller and (previous) owner for the period of the tenancy. Even if the seller was not informed about this beforehand.

2. With a change of ownership, the tenant has the preemption. He has to be informed by the owner about the disposal intention, the price and the conditions of the negotiation.

3. Also in case of a compulsory auction of the renting object, the rental agreement has to be respected and adhered.

House rent and lease costs

clause II, chapter III, article 17-20

1. The rent can be assessed freely by the two parties.

2. Increases of the rent during the first five years are based upon the consumer price index (IPC).

3. Not until after five years of duration or because of structural improvements of the property it is allowed to increase the rent, which was stipulated in the tenancy agreement.

4. Bailments for the safety of the owner's interest are necessary because of clause IV, article 36. Mostly, they are one or two rents. The bailment can be accounted every year according to the cost of living index (IPC), but it's not necessary.

5. The tenant has to pay the verheads, duties and ancumbrances. Taxes, dues like waste disposal and the IBI („Impuestos de bienes Inmuebles“ - local rates) can be funds on the new tenant. (according LAU, reason statement, preamble 6).

6. The community charges have to be paid by the tenant, as well. These charges are already included in the lease price mostly. Only the charges of the supply of electricity, water, gas etc. have to be paid separately.

Maintenance

clause II, chapter IV, article 21-24 and chapter V, article 26

1. The hirer has to care for good order and condition and the maintenance of the property.

2. If rebuildings – maintenance measures -, which cannot be postponed and have to be performed before the end of the contract, the tenant has to tolerate it. Only after twenty days, the tenant has the right for an abatement of rent for the part of the property, which cannot be used.

3. Only after receiving a written agreement from the owner the tenant is allowed to do remodelling or rebuilings. If the tenent does so without the agreement of the owner, he is allowed to cancel the contract. In this case, the tenant has no right of compensation for his work. Also if the owner did not agree with the rebuildings, he can request the tenant to give the poperty back the same way he received it. In this case the tenant also has no right of compensation.

4. If the property becomes untenantable in consequence of maintenance or building work measures, which have been agreed upon by the authorities, the rental agreement can be suspended by the tenant until the end of the reparation or it can be cancelled completely. An entitlement for an abatement of rent does not exist in this case.

5. He charges for minor reparations (because of every day usage of the property) have to be paid by the tenant.

Notice

clause II, chapter V, article 27

If one of the parties does not maintain one or more of the agreed clauses, the other party is allowed to request the compliance of the clauses or to cancel the contract according to article 1124 of the civil code of law.

Extraordinary notice of cancellation by the owner can be declared in the case if:

1. The rent or other amounts of money are not being payed.

2. The bailment or the adjustment is not being payed.

3. The property is subleased without accordance of the owner.

4. The tenant damages the house deliberately or if he makes any constructions not accredited by the owner or the authority.

5. Harassing, insanitary and/or dangerous acts by the tenant have been taken place or are taking place.

6. the tenant (or his/her wife/husband or the dependent children) does not use the property as first residence any longer.

Notes

Here you can consult the "Ley de Arrendamientos Urbanos" in the original form.

Literature

More informations and readings to the Spanish renting law (only avalaible in german):

1. Schlütter, Harald und Ross, Friso: Mieten und Vermieten in Spanien Wohn- und Geschäftsraummiete; Praktische Erklärungen; Spanischen Mietgesetz in Deutscher Sprache. - Frankfurt am Main 2003, Verlag Edition für Internationale Wirtschaft.

2. Gantzer, Peter: Spanisches Immobilienrecht - Frankfurt am Main 1987, 9. überarbeitete Auflage 2003, Peter Lang GmbH, Europäischer Verlag der Wissenschaften.

3. Mayers, Rita: Auswandern nach Spanien 2 – Berlin 2005, 2. akt. erweiterte Auflage, Gentlemen's Digest Verlag.

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