Characteristics of a Spanish lease agreement- Introduction

Problemas de viviendas en España- contratos de arrendamiento

Hard to find a flat for rent in Sitges

What you should know before signing a lease agreement in Spain

Spanish cities constantly attract foreigners driven by their vision of starting a business activity, investing in real estate or simply those who come to Spain in pursuit of better living conditions. However, as easy as it may seem, buying or renting a property may entail some difficulties especially for those who are not familiar with the Spanish law and the prevailing formal procedures, which will be discussed in this series of articles.

In addition to a serious shortage of housing for rent especially in bigger cities such as Barcelona and Madrid, there are also legal obstacles which every investor or a private person should have in mind before signing a lease agreement in Spain. The lease contract can be defined as an agreement, regulated by the Provisions of the Civil Code, that grants the lessee the rights to use the property owned or managed by the lessor for a specific period.

There are two main types of contracts- residential and commercial lease agreement. The key difference between these contracts is their purpose. The first type, as its name indicates, is restricted only for residential use while the other is signed for commercial purpose which may include a business activity, for example, sale or manufacturing of goods to generate profit.

There is a significant date in the legal rent regulations in Spain which is January 1, 1995. It is when the act on urban lease came into force establishing the right to change the term of the contracts and its extensions as opposed to contracts signed prior 1995 (which are still in force in many places). Such contracts had a very protective regulation for the lessee and limited for the lessor obliging him to extend the lease contract on the same conditions.

Both types of contracts will be taken under scrutiny in the next article together with the implications which they entail on the owner and the tenant.

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