The legal measures established by the new rental Law 07/2019, passed on March 1, greatly modify the regulation of the rental market trying to give more security and stability to the tenants of primary residences in those rental contracts signed from March 6, 2019 equaling the legal positions of the owner and the tenant in the rental relation.
Prior to comment the main changes introduced by this new Law and considering the real estate market of the Costa del Sol, it is important to emphasize that this new regulation will not be applied to those properties with a built area higher than 300 square meters or to those contracts where the yearly rent is higher than 5,5 times the minimum annual interprofessional salary. In these cases, the rental contracts will be governed by the will of the parties.
Once this clarification is done, it is important to point out that the duration of the rental contracts, although it can be agreed between the parties in those cases when the period is shorter than five years, or seven years in the case the landlord is a company, will be mandatorily extended per annual periods until it reaches a minimum duration of five years, or seven in the case the landlord is a company. This circumstance gives more tranquility to the tenants who additionally, if that is agreed with the landlord, extend the contracts for a maximum of three more years.
In the same line, the new law solves clearly the legal consequences of a possible sale of a property. In these cases, the tenants will maintain their rights to live in the property for the agreed period even if the property is sold by the landlord. There is no need anymore to register their rights at the Land Registry to maintain them.
On the other hand, and in relation with the owners after this reform of the law, it is important to emphasize that the recovery of the property by means of an anticipated cancellation of the rental contract has to be expressly detailed in the rental contract in order to be able to enforce that recovery (in case the property is needed as primary residence for the owner, its children, etc). Furthermore, the new law allows the landlord to request additional guarantees to the deposit, not exceeding two times the monthly rent, improving its position in front of the tenants.
Finally, and contrary to the habitual practice in the real estate market, it is important to point out that the formalization of eleven months rental contracts to try to avoid the spirit of this law is being considered by the courts as fraud of the law if the tenant can prove that has its habitual and effective residence in that property. The rental contracts with a limited duration should be only used in those cases when the tenant has a housing need for a closed period of time and a certain motive that has to be clearly established in the rental agreement.
David Mencia
Abogado
C/ Marqués del Duero, 84 3º B
29670 San Pedro Alcántara (Málaga)
Tlfno: (+0034) 952 92 86 72
davidmencia@menciaabogados.com