The new Law (Real Decreto-Ley 7/2019) concerning urgent measures with regard to dwellings and rentals came into force on 6 March 2019.
The main measures to bear in mind from now on are the following:
(1) The compulsory renewal period of a rental contract has been extended from three to five years if the owner is an individual, or seven years if a business.
Once this period is over, if none of the contracting parties objects the contract will automatically be extended for three years.
Initially, the LAU29/1994 set a minimum five year period with an extension of three, but this was reduced in June 2013 to three years with an extension of one year.
(2) Communities of owners in residential complexes will be able to limit or set conditions on holiday letting, i.e. touristic use of the units, with a vote in favour of 3/5ths of the owners.
(3) The family situations of tenants considered as socially vulnerable will result in the suspension of eviction procedures.
The Court, when making an initial order for payment of rent, should inform a tenant that they can approach Social Services if they are in a vulnerable situation.
If Social Services consider that there are indications to confirm a situation of vulnerability, they will inform the Court that eviction should be suspended until appropriate measures are in place for a maximum of 1 month if the landlord is an individual or 2 months if a business.
(4) The landlord cannot request additional guarantees (sureties or guarantors) beyond the bond unless the contract is for more than 5 years.
(5) Contract and administration fees.
The reform requires that contract and administration costs are paid by the owner-landlord if this is a private individual and not a business.
(6) Exemption of Property Transfer Tax.
Residential rentals are exempt from this tax. The tax is understood to be applicable only to non-residential contracts and housing that must be settled at the corresponding tax office.
