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URBAN RENTALS MALLORCA – UPDATE 2014

The new spanisch Law regarding Spanish Urban Rentals has overwritten the exiting law in many fundamental ways. Please find a report of the most important points by Mallorca Tax Accountant DMS Consulting im Palma:

DURATION OF THE RENTALS

The minimum duration of the rentals changes from 5 to 3 years, although an inferior term is agreed. Once the 3 years have elapsed, the unspoken extension will be of 1 year and not 3 as up to date.

TERMINATION OF THE RENTAL CONTRACT DUE TO A NEED OF THE OWNER

After a year of contract length, if the owner accredits that he needs the rented property for his own use or for his first-degree relatives (direct family members) or for his spouse in cases of separation, divorce or marriage annulment, he has the possibility of not extending the rental contract.
NO DISTINCTION BETWEEN SUMPTUOUS PROPERTIES OR NOT
. The exclusion of the substantial application of the LAU in the sumptuous properties (areas superior to 300m2 or rentals 5,5 times superior to the national minimum wage) disappears. Now, all the rentals of properties have the same legal regime.

INCREASE OF THE RENT

This is important news, as up to date, it was only possible to increase the Consumer Price Index (CPI); with this reform the increase will be the one agreed by the parts after the first year.

TERMINATION OF CONTRACT DUE TO SALE OF THE PROPERTY

The rental contract is cancelled in case the property is sold, except in the case that the rent has been inscribed in the Property Register or the new purchaser knows that there had been a rental contract.

EMAIL ADDRESS

The parties can specify an email address for notifications, but it will be necessary to guarantee the authenticity of the communication and its content and authenticated referral and reception, and the moment they were carried out.

WITHDRAWAL FROM THE CONTRACT

The tenant can withdraw from the contract provided that 6 months have elapsed. In this case, a compensation of a monthly rent can be agreed in the contract, for a year of breach that the tenant has to pay to the owner.

SEPARATION, DIVORCE OR MARRIAGE ANNULMENT

In the cases of separation, divorce or marriage annulment, where the judge has attributed the use of the family home to the spouse, who is not a holder of the rental contract; the same can continue with the rental contract, communicating it to the owner within the term of 2 months.

PROHIBITION OF RENTAL OF TOURISTIC PROPERTIES

The last remaining link for offering private flats to tourists is being closed. The Law refers its authorization to the autonomic legislation, which in the Balearic case is very restrictive.

(http://blog.consultingdms.com/de/2012/12/die-touristische-nutzung-von-wohnraum-auf-den-balearen)

PAYMENT WITH WORK IN THE FLAT OR HOUSE

A substitution of the payment of the rent in cash can be agreed upon, with refurbishing work or renovation agreed.

REFURBISHING WORKS FOR THE DISABLED OR ELDERLY

The disabled tenant or older than 70 years, can carry out adapting renovation of the property to suit his needs, with a previous, written communication to the owner. Once the contract ends, the tenant must return the property in the previous situation, if this is what the owner requires.

MODIFICATION OF THE LAW OF CIVIL PROCEDURE

The process is modified intending to speed up the evictions. We will see if together with the reduction of work in the civil courts, derived by the crisis and taxes, this implies a greater speed in the process.

CREATION OF A REGISTER OF FINAL DECISIONS OF NON-PAYMENT OF RENTAL

A register of final decisions of non-payment of rental is created, which can be consulted by any owner who can accredit by a rental contract proposal to have interest in the query.

(Source: DMS Consulting, Palma de Mallorca)

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