Some of the most important housing laws in Spain refer to the private rented sector, with landlords needing to adhere to certain regulations around protecting the rights of tenants.
Drawing up contracts
Whether you’re a tenant or a landlord, you should always have a written tenancy agreement, and it should be clear as to whether it’s a long-term or short-term agreement – as the latter provides the tenant with fewer rights.
For example, long-term tenants can stay in the property for a number of years on a ‘rolling’ basis, while short-term tenants need to leave as soon as the initial contract ends.
Long-term contracts last for at least a year. If you agree a one-year contract, this will continue to be renewed each year on its expiry up to a minimum three year term – unless the tenant chooses to break it or the landlord had clearly specified otherwise at the start.
After three years, the landlord can terminate the contract by giving 30 days’ notice.
Tenancy deposits in Spain must be protected in a third party scheme and returned within one month when the tenancy ends.
If the landlord needs to use some of the deposit to fix damage caused by the tenant, they can make a claim on this, and if needs be the third party can adjudicate on disputes.
Tenants in Spain aren’t required to pay for normal wear-and-tear that occurs during their rental period.
Energy performance certificates
If you’re renting or selling a home in Spain, it’ll need to have an Energy Performance Certificate (EPC).
The purpose of the EPC (Certificado de Eficiencia Energetica (CEE)), is to ensure that homes are able to run efficiently and reduce carbon dioxide emissions.
EPCS are graded from A to G, with ‘A’ being extremely efficient and ‘G’ being very inefficient.
Landlords letting homes for longer than four months must have a valid EPC for the property, with fines given to those who don’t adhere.
EPCs in Spain cost around €300. If energy improvements are made, you’ll need to have the home reassessed and an EPC reissued.
Empty homes in Spain
It’s estimated that there are more than three million homes currently empty in Spain, and the government is looking to rectify this.
The government hopes to bring in regulations that could potentially result in higher taxes or fines for homeowners who leave their properties empty, as it attempts to free up more properties to be sold and rented.
Buying property off-plan in Spain
There has been much controversy about buying homes off-plan (before they’ve been built) in Spain.
This is because during the financial crash many purchasers bought homes that ended up never being built, because developers went bankrupt.
If you’re buy a home off-plan, you’ll need to ensure you have the following documentation:
- Proof that the construction has been completed in accordance with what you agreed (certificado final de obra).
- Licence of first occupancy (licencia de primera occupacion), which will be issued by the town hall to confirm the property is habitable. You won’t be able to connect utilities such as water and electricity without this.
If a developer fails to complete the property by the agreed deadline, you can demand to:
- Cancel the contract and have your deposit returned (with interest)
- Extend the deadline
If you want to cancel your purchase, you’ll need to appoint a lawyer.
Equity release in Spain
If you have a property in Spain and want to release some of its value as income or a lump sum, you could consider an equity release scheme – such as a reverse mortgage (hipoteca inversa) or lifetime loan.
Reverse mortgages are usually aimed at retired homeowners over 65 and involve homeowners borrowing money against the value of their property.
Before rushing into equity release you’ll need to take legal advice and ensure the company is registered with the financial regulator (Comision Nacional de Mercado de Valores) and that they’re authorised to operate in Spain.