The date on which a residential lease contract is signed is decisive, as the applicable regulatory regime can be different within a few days of each other.

In this table, you can see a summary of the different regulatory regimes applicable to residential leases.

In this first post, we will deal with the legal regime applicable to leases signed:

1. Between 1 January 1995 and 6 June 2013;

2. Between 19 December 2018 and 23 January 2019;

3. and from 6 March 2019, the regime currently in force.

These three blocks of leases are the same in terms of the duration of the legal extensions, but not in terms of the possibility for the lessee to withdraw from the lease.

In the following entry, we will analyse the regime of contracts signed after 6 June 2013, following the approval of Law 4/2013, on measures to make the housing rental market more flexible and promote it, and until its new modification.

Duration of residential leases

What is the legal term of residential leases?

In accordance with Article 9 of the LAU, housing rental contracts have the duration expressly agreed by the parties. However, the Law itself states in the same article that if the lease is agreed for a term of less than 5 years, the contract is extended voluntarily for the tenant (he/she can leave when each of the annual payments is due), but obligatory for the landlord (he/she is obliged to maintain the lease), up to a maximum of five years.

The minimum legal term of these leases is five years if the lessor is a natural person, and seven years if the lessor is a legal person.

In addition, in the leases referred to in paragraphs 2 and 3, if the lessor is a legal person, this minimum initial term is seven years.

It is important to note that this extension of the lease is automatic: the parties do not have to sign any kind of document for it to apply, and the landlord cannot make the extension of the lease at this stage conditional on any modification of the lease, nor on increasing the rent above the update foreseen in the lease.

During this legal period, the tenant cannot be denied his right to extend, and no rent increases beyond the CPI can be made, if agreed in the contract.

How is the lease extended?

At the end of the five/seven years, the tenant has the right to have the lease extended for a further three years, unless either party has expressed a wish not to extend it any further. If no one has stated otherwise, the extension is automatic, without the need for the parties to sign any new document.

In this sense, in the leases indicated in section 1, either of the parties has to give one month's notice, while in more recent leases, the regulations have tightened up the notice periods, with the lessor having to give at least four months' notice, as opposed to the lessee's two months' notice.

In order to avoid missing this notice, the lessor can include in the contract itself his wish that the contract should not be extended after the minimum legal period has elapsed.

The landlord's notification in the lease contract of his wish not to apply additional extensions is valid.

Once this period has elapsed, there is no longer a contract, so the mechanism of tacit renewal is applicable.

And from the eighth year onwards? The tacit renewal

After the eighth year, the lease no longer exists, because the term has expired. However, if the landlord and tenant act as if the contract continues to exist for 15 days after the expiry of the lease term, a new contract is deemed to have arisen by virtue of tacit renewal. For this, the tenant must continue to pay the rent and the landlord must allow the tenant to occupy the dwelling, implying that tacitly - that is, without expressly saying so - they wish to continue in a tenancy.

The duration of this new lease will be determined by the term for which the rent has been fixed: if the rent is annual -even if it is paid monthly-, the contract will be extended for years; if the rent is monthly, for months, etc...

In any case, if you have any doubts about the interpretation of your contract, the best thing to do is to contact a lawyer specialised in leases as soon as possible, who will be able to answer any questions you may have.

When can the lease be terminated?

As we have seen, lease extensions are annual, so this is the minimum period to which the parties are bound.

When can the tenant withdraw from the lease?

In the leases signed until 6 June 2013, the tenant did not have the right to withdraw from the lease, and was therefore always obliged to fulfil the full annual instalments.

With the 2013 reform, the tenant was given the possibility to withdraw from the contract after the first 6 months, always with one month's notice. If agreed, a cancellation penalty may be applied, within the limits of art. 11 LAU.

When can the landlord withdraw from the contract?

In principle, the landlord can only say that he does not wish to continue with the lease after the fifth and eighth year of the lease. However, there is an exception: if the landlord needs to use the dwelling for his own use (or first-degree relatives and divorced spouse) and has expressly stated this in the contract, he can prevent the contract from being extended - again, the entire yearly period must be fulfilled - even within the mandatory extension periods.The date on which a residential lease contract is signed is decisive, as the applicable regulatory regime can be different within a few days of each other.