One of the most frequent doubts of those who have a rented house is whether they can sell it while the rental contract is in force. And the answer is yes, as there is no legal limitation that prevents this. In fact, the sale of the rented property is regulated in article 14 of the Law on Urban Leases (LAU), which was drafted by Royal Decree-Law 7/2019, of 1 March, on urgent housing and rental measures.
However, there are several factors to take into account in order to carry out the operation successfully and avoid future problems. In general terms, the experts consulted by idealista/news insist on the need for the owner to inform both the tenant and the potential buyer of their intention to sell the property, as well as the importance of negotiation and putting all agreements in writing. They also offer practical advice for each party involved in a transaction of this nature.
According to Alfonso Soler, CEO of CLF International Lawyer, “renting a property has clear advantages, but also some disadvantages. One of them is that the property is still ours, but we lose our right to use it for a certain period of time. This means that, if we want to sell our property free of tenants, but it is rented and the contract is in force, it will be necessary to get the tenant to renounce this right of use conferred by the contract he has signed. Normally, this is achieved by reaching an agreement between both parties, which in practice is only achieved with compensation. In this way, we will be released from our obligations.
However, it must be taken into account that the lease contract may include the famous right of first refusal by the tenant. This right would mark the entire sale and purchase process, as it obliges the landlord to inform the tenant of his plans to transfer the property in which he resides and gives him preference to buy it over other interested parties.
As Christian Fisher, a lawyer specialising in Real Estate Law and partner at Costa Blanca Realty, reminds us, article 25 of the Urban Leases Law (LAU) provides for the mechanism of the right of first refusal (derecho de tanteo y retracto). And, “unless the rental contract expressly states the waiver of these rights, as is the case in most cases, the seller (owner) must inform the tenant of the essential conditions of the sale in a reliable manner and the tenant may exercise the right of first refusal within 30 calendar days. If this intention to sell has not been communicated to the tenant or if the sale has been made for conditions that are inferior to those that had been communicated, the tenant will have the right to exercise the right of withdrawal also within 30 calendar days”, he maintains.
In other words, this right means that the owner must give the tenant the preferential option to buy, even if the contract is about to end. “This decision must be made by means of a written communication in which the tenant is informed of the price and conditions, and the tenant has 30 days to make a decision,” Foro Consultores adds.
In fact, it is vital that this step is fulfilled, since, insist Foro Consultores, “if the owner does not act in good faith and sells the property without communicating it, and the contract includes the right of withdrawal, the tenant can acquire the property for the same price and cancel the previous sale and purchase, with all that this entails”.
And what happens if the tenant wants to stay in the property, but is not interested in buying it? In this case, stresses the vice-president of Alfa Inmobiliaria, the owner can freely sell the property and “the rental contract will be subrogated to the new owner until the contract reaches its agreed end”.
As José Ramón Zurdo, director general of the Agencia Negociadora del Alquiler (ANA), recalls, since the LAU was amended in 2019, “the new buyer of the property is obliged to respect the tenant who inhabits it, having to respect them for the duration of the contract that remains to be fulfilled. Before this date, if the buyer was in good faith, once the purchase had been made, he could evict the tenant without having to respect the remaining contract period”.
It should be remembered that, for the last two years, the duration of rental contracts has been five years if the lessor is a natural person (an individual) and seven years if the lessor is a legal entity (i.e. a company), unless the parties agree on another duration.