Changes in Housing Lease Agreements

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What has happened to housing lease contracts in recent months?

Have you had any doubts lately about housing rental contracts?? The Urban Leasing Law (LAU), regarding its regulation of housing rentals, is periodically the protagonist of the news and generates great expectation and different expectations for both owners and tenants.

Since its entry into force in the year 1995, the Urban Leasing Law, has undergone several modifications, the last one being the one carried out in the month of December 2018, through the publication of a Royal Decree-Law approved by the government. This new regulation has been in force until the day 24 of January of 2019, since the aforementioned Royal Decree-Law has not been validated by the Congress of Deputies, and has lost its effectiveness.

Thus:

The lease contracts urban dwellings subscribed during the short term of the Royal Decree-Law, will be governed by the provisions of the same.

The contracts signed later will be governed by the provisions of the Urban Leasing Law that were in force before the 19 from December to 2018.

A brief comparison between the two referred regulations is set forth below.:

Contracts signed between 19/12/2018 and the 24/01/2019:

The main characteristics of these housing lease contracts are the following:

  • MINIMUM TERM IN FAVOR OF THE LESSEE:
    • Lessor legal person: 7 years.
    • Natural person landlord: 5 years.
  • DURATION OF THE POSSIBLE EXTENSION OF THE CONTRACT: 3 years.
  • MANDATORY DEPOSIT: The amount of 1 month's rent.
  • SUPPLEMENTARY WARRANTY: The amount of two months rent.
  • EXPENSES FOR REAL ESTATE INTERMEDIATION AND FORMALIZATION OF THE CONTRACT: On behalf of the lessor, if this were a legal person.

Contracts signed from 24/01/2019:

The main characteristics of these housing lease contracts are the following:

  • MINIMUM TERM IN FAVOR OF THE LESSEE: 3 years
  • DURATION OF THE POSSIBLE EXTENSION OF THE CONTRACT: 1 year.
  • MANDATORY DEPOSIT: The amount of 1 month's rent.
  • SUPPLEMENTARY WARRANTY: The lessor can demand those additional guarantees that it deems appropriate (deposit, Bank guarantee…)
  • EXPENSES FOR REAL ESTATE INTERMEDIATION AND FORMALIZATION OF THE CONTRACT: There is nothing regulated as to who should pay it, although it is usually the tenant.

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