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Housing rental contract

Housing rental contract

Nowadays, it is increasingly common to opt for a home lease instead of purchasing, which usually entails the corresponding mortgage. If this is your case, in this post we are going to explain the most important aspects of the housing rental contract.

What is the housing rental contract? 

El housing rental contract It is the document that regulates the transfer and use of a property and the rights and obligations of the lessor (the owner) and the lessee (the tenant). For it to be valid, it must be formalized following what is established in the Urban Leasing Law (LAU).

Urban Leasing Law of 1019

On March 1, 2019, Royal Decree-Law 7/2019, of March 1, on urgent measures regarding housing and rentals, was approved. This Royal Decree was intended to remedy the certain lack of protection in which the tenant had been left after the Law approved in 2013.

These are some of the most important measures that were introduced at LAU 2019 and that remain in force today:

Duration of the housing rental contract and tacit extension

The new law extends the mandatory minimum duration of housing lease contracts from three to five years. And in the event that the landlord is a legal entity, the minimum rental period is 7 years.

Regarding the extension of the rental contract, what was approved in 2013 is also reversed and is again three years.

The period to communicate the termination of the contract, before the tacit extension is activated, is four months for the owner and two months for the tenant.

Guarantee before the sale of the home

In the event of the sale of the home, the tenant's right to remain in it during the period stipulated in the contract is guaranteed. This is another important change, since until then, the sale of the property to a third party could lead to the contract being required to be terminated.

One month deposit and two months deposit

The cash deposit has not changed, it is still one month. However, the new decree establishes two more monthly payments as an additional guarantee to cover the payment of rent, associated expenses and the conservation of the home in good condition.

Housing Rental Contract - Murcia - ACC LEGAL ABOGADOS

More important things you should know about the home rental contract

Whether we put our house for rent or if we are looking for a property to rent, there are a series of important considerations to take into account in addition to those mentioned above:

Termination of the rental contract

As long as it is expressly included in the initial contract, there is the possibility that the landlord can recover the apartment after the first year if he demonstrates a need for the home for himself or for a direct relative (in the first degree of consanguinity).

And as far as the tenant is concerned, current regulations recognize their right to terminate the contract after the first six months. Termination of the contract before the scheduled date must be communicated at least two months in advance.

Rental price update according to the CPI

There is freedom for the parties to set the annual update of the rent or rental price, although said increase may not be higher than the increase in the CPI in any case. And if nothing has been specified in the contract in this regard, the rent cannot be updated during its validity.

Detailed inventory

The deposit must be returned once it is verified that there are no outstanding debts and the good condition of the property, but it is often the cause of problems. Therefore, along with the contact, it is advisable to include a detailed inventory of the home, including photos. Upon returning the keys, both parties must inspect the home and sign a document that mentions the damage caused, if any.

Distribution of expenses

Although the Urban Leasing Law contemplates a distribution of expenses between the parties, it is advisable to specify it in detail in the lease contract. In principle, the landlord pays taxes such as the IBI, the community of owners and the costs of maintaining the home and its facilities. And the tenant must be responsible for supplies and small repairs derived from the ordinary use of the home. In those cities where there is a garbage fee, it must be agreed who it corresponds to, and the usual thing is that the tenant is responsible.

In relation to the expenses of real estate management (if any) and formalization of the contract, they will be borne by the owner if it is a legal entity. And if it is a natural person, the agency's commission is generally paid by whoever has hired their services.

What should the housing rental contract be like?

The following information must be included in the housing rental contract:

  • The data of the landlord and tenant, also mentioning whether they are a natural or legal person.
  • The data of the home: exact address and description of the home included in the inventory of belongings with which it is rented.
  • Contract period.
  • Monthly rent and payment conditions in a timely manner.
  • Bail.
  • Extension.
  • Notice period.
  • The power of the landlord to recover the home.
  • The tenant's possibility of terminating the contract.
  • Detail of general expenses: community, taxes, etc.
  • Conservation expenses.

Although a rental contract can be drawn up freely between the parties using a basic model that meets the requirements of current regulations, it is always advisable that the landlord and tenant have a lawyer expert who drafts or reviews the contract prior to its signing.

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