Changes to the Spanish Tenancy Law- Hit or miss?

 

 

 

 

 

 

The current Spanish Government is betting for a surge in rentals as a way to compensate the stock of properties for sale that cannot be currently absorbed by the market. For this reason it has implemented a project of law that, in the Government’s opinion, will revive the rentals market. The project of law is based on three important pillars: more flexible rentals, speeding eviction procedures and tax incentives.

Landlords will gain more rights and will be able to cancel rental agreements if the property is required for their personal use regardless of whether the tenancy period has come to an end or not. They will also be able to recover the property if the property is required by the spouse after a divorce or by close relatives.

There is a plan to speed the current eviction process which is still too slow and creates great problems to landlords. The idea is to proceed to the eviction without having to wait for a Court Order. For instance, it will be enough with the notice served by the Court or a Notary Public.

Tenants will also be able to terminate the tenancy agreement before the end of the agreed period as long as they serve 1 month’s notice. This is quite the opposite of the current situation whereby most tenants are forced to stay in the property for at least 12 months prior to being able to terminate the agreement.

The purpose of this project of law is to promote rentals and change the Spanish mentality in respect of renting. However, experts consider the reforms landord-bias as they will benefit landlords in a major scale than tenants. This is only a project of law. Spain has right now major problems to solve but there is no doubt that the rental market in Spain is less active than in the rest of European countries. Property owners are reluctant to let their properties because they are afraid of getting a bad tenant and terrified of the long eviction procedures. This law could help to revive this market but there will be a pay to price and tenants are the most likely to suffer the consequences of any new reforms in this respect.

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The fast and the furious- New speedy eviction laws in Spain

 

 

 

 

 

 

 

An unoccupied property is a lost opportunity to make money. After the summer, thousands of holiday apartments are vacant until the following holiday season. Many of the British who have purchased Spanish property are not using them for the rest of the year.  A good option for them is to rent them out. However, many are uncomfortable to commit to long term rentals due to the slowness of the Spanish eviction system.

Having a defaulter tenant in your holiday apartment can be a real nightmare as it could take you 1 year to evict him from the property. The Spanish Government is determined to improve the legal mechanism to warrant an efficient eviction system and has recently issued new laws which, between other points, are meant to speed the eviction procedure. The aim of the laws is to improve efficiency, avoid long term bureaucracy and increase the confidence in the legal system.

Since the enactment of new laws, the petitions are meant to be resolved in shorter periods of time. Less time should also mean less cost. In fact, eviction will now be possible even without any hearings.  A very simple petition to the Court will be sufficient. Once the petition has been admitted, the tenant will have two options:

A. He can object to the landlord’s petition. Then both landlord and tenant will be summoned to a hearing

B. He can ignore the proceedings, in which case he will be sentenced to evict the property and in certain cases, to pay the amounts owed.  

To avoid unfair situations, the tenant will only be able to appeal the decision if he deposits the amounts owed in the Court’s escrow account.

The initiative is really positive to improve the rights of both landlords and tenants. Renting properties should be considered a worthy option.

Citizens in general will welcome the new laws, although its success will rely not only on theoretical law but in its practical implementation. Lets remember that good intentions and changes in law can prove fruitless if they do not come along with some improvements in the current bureaucratic system.  

 Photograph from www.dreamstime.com