Renting Out Your Property in Spain: Legal Responsibilities for Expat Landlords (Advice from a Property Lawyer)
If you’re an expat who owns a home in Spain and plans to rent it out, understanding your legal duties as a landlord is essential. Spanish rental laws provide various protections for tenants, and landlords must follow specific rules before and during a tenancy. In this article, our property lawyer outlines the key responsibilities and best practices for landlords in Spain, so you can lease your property with confidence and avoid legal troubles.
Before Finding a Tenant: Preparations
- Habitation Certificate & Utilities: Ensure your property has a valid Certificate of Habitation (Cédula de Habitabilidad) or first occupancy license, as required for renting in many regions. Confirm that utilities like electricity, water, and gas are properly installed and safe.
- Energy Performance Certificate (EPC): As with property sales, landlords must obtain an Energy Performance Certificate for the home and include the energy rating in any advertisements. This is mandatory and typically done by a registered technician.
- Insurance: It’s highly advisable to have landlord insurance or a robust home insurance policy covering rental use. This can protect you from damages or liability claims. While not a legal requirement, it’s a smart precaution.
- Determine Terms: Decide on key rental terms – Will it be long-term (vivienda habitual) or short-term/holiday rental? Long-term leases (for permanent housing) are governed by the Urban Leases Act (LAU) with minimum term rules, whereas tourist/holiday lets have different regulations (including needing a tourist license in many regions like Valencia). Make sure you follow the correct legal regime for the type of rental.
Drafting a Solid Rental Contract
A written rental contract (contrato de alquiler) is essential. It should be in Spanish (you can have an English translation for reference) and include:
- Identities of landlord and tenant (with NIE or passport numbers).
- Detailed property address and description (including storage rooms or parking if included).
- Duration of the lease: In long-term rentals, the initial term can be freely agreed (e.g. 1 year), but tenants have a right to extend up to 5 years (or 7 years if the landlord is a company) by law. In holiday rentals, duration may be days or weeks as agreed.
- Rent and Payment Terms: State the monthly rent, due date, payment method, and any allowed increases. For long-term leases, rent can only be increased annually and usually capped by inflation index unless otherwise agreed.
- Security Deposit: By law, you must collect and later return a security deposit (fianza). The minimum is one month’s rent for residential leases. This deposit must be lodged with the regional government authority (for example, in the Valencian Community, deposited with the corresponding department) for the duration of the tenancy. Additional guarantees (like one extra month or a bank guarantee) can be agreed too.
- Maintenance Responsibilities: Clarify who handles routine maintenance vs. major repairs. Generally, landlords must maintain habitability (structural issues, major repairs like boiler replacement), and tenants handle minor wear-and-tear fixes.
- Community Rules: If the property is in a building or development with community rules (house rules, pool hours, etc.), attach those as an annex the tenant agrees to follow.
- Any special clauses (pets, subletting permissions, etc.). Note that clauses that waive tenant rights given by law (like their right to automatic lease extensions or legal eviction processes) will be null and void.
Having a lawyer draft or review your contract ensures it complies with Spanish law and covers important points to protect you.
During the Tenancy: Landlord Duties
- Register the Deposit: As mentioned, promptly deposit the tenant’s security deposit with the designated authority. It’s illegal to simply hold it in your account for long-term leases – official deposit is required in most regions.
- Habitable Condition: You must keep the property habitable. That means addressing serious issues like leaks, electrical problems, or appliance breakdowns that aren’t due to tenant misuse. Promptly carry out necessary repairs. Tenants can even arrange urgent repairs and deduct cost from rent if a landlord fails to act, so it’s best to respond quickly.
- Respect Tenant’s Privacy: Once rented, the property is the tenant’s home. You cannot enter without permission except in emergencies. Schedule any visits or inspections with adequate notice and tenant consent.
- Pay Ownership Expenses: As landlord, you continue to pay property ownership costs like the annual IBI property tax, community fees, and home insurance. The tenant typically pays utilities (water, electricity, etc.) and possibly services like internet, depending on contract.
- Receipts and Records: Provide rent receipts if the tenant requests them (especially if they pay in cash). It’s good practice to keep a record of all payments. Also, consider declaring the rental income in your Spanish tax returns to stay legal and avoid fines – rental income is taxable, but you can deduct many expenses.
Ending the Tenancy
- Termination Notice: If the tenant decides to leave after the mandatory minimum period (or at contract end), they must give you proper notice (usually 30 days). As a landlord, if you need the property back after the initial term, you also must give notice as per law and contract.
- Inspect and Return Deposit: When the tenant moves out, inspect the property for damages beyond normal wear. You can agree on any deductions from the deposit for repairs. Then you must return the deposit (minus justified deductions) within the timeframe set by law (often 1 month after lease end for long-term rentals).
- Official Cancelations: Remove the deposit from the government deposit scheme by providing proof of return or any agreed deductions. Also ensure utilities are settled or transferred out of your tenant’s name.
Conclusion
Being a landlord in Spain comes with legal obligations, but with the right preparation and support, you can manage your rental smoothly and profitably. Always use clear contracts and adhere to local regulations (especially if running holiday rentals, which often have separate requirements and registration). If you need assistance drafting lease agreements, understanding tenant rights, or handling any disputes, contact our property lawyers at Expat & Legal Spain. We’re here to help expat landlords protect their property investments and navigate Spanish rental laws with ease.
Sandra Márquez
CEO & Lawyer, Expat & Legal Spain