Spanish Urban Renting Law In English. Spain’s Tenancy Act.TITLE V. Rental processes

Source BOE 

Spanish Urban Renting Law 29/1994, of 24 November. PREAMBLE

NOTE: This translation is not official – It is for information purposes only

.-Preamble
.-Titel 1 Ambit of the law
.-Titel II. Of housing leases
.-Titel III. Rentals for other than residential use
.-Titel IV. Common provisions
.-Title V. Rental processes

TITLE V
Rental processes

Articles 38 to 40.  (Repeals)

First additional provision. Regime of public housing rented out.

1. The term of the legal regime for subsidized housing, which is qualified for renting from the date of entry into force of this law, shall expire at the end of the period established in the applicable regulations for the repayment of the qualified loan obtained for its promotion or, in the absence of such a loan, at the end of twenty-five years from the date of the corresponding definitive classification.

2. The maximum initial rent per square metre of public housing referred to in the previous section shall be the percentage of the maximum sale price that corresponds in accordance with the applicable state or regional regulations.

3. No revision of rents for social housing will be applied unless the parties explicitly agree. In the event of an express agreement between the parties on any mechanism for reviewing monetary values that does not detail the index or reference methodology, the income will be reviewed for each annuity by reference to the annual variation of the Competitiveness Guarantee Index.

4. In addition to the initial or revised rent, the lessor may receive the actual cost of the services enjoyed by the lessee and paid by the lessor.

5. Without prejudice to any administrative sanctions that may be applicable, clauses and stipulations that establish incomes in excess of the maximum authorised in the applicable regulations for subsidised housing shall be null and void.

6. The provisions of the foregoing sections shall not apply to housing for public promotion regulated by Royal Decree-Law 31/1978.

7. The provisions of the previous sections shall be of general application in the absence of specific legislation of the Autonomous Communities with competence in the matter.

8. The renting of public housing shall be governed by the specific rules of the latter with respect to the term of the contract, variations in the rent, the limits on the repercussion of sums for the repair of damages and improvements, and the provisions regarding the right of assignment and subrogation in the rent, and insofar as they are not regulated by those of the present law, which shall be applied in full when the renting is no longer subject to said specific provisions.

The exception shall not apply to questions of jurisdiction and procedure in which the provisions of this Law shall apply in their entirety.

Second additional provision. Modification of the Mortgage Law.

1. Article 2, number 5, of the Mortgage Act, approved by Decree of 8 February 1946, shall read as follows:

“5.º The contracts of lease of real estate, and the subleases, cessions and subrogations of the same.”

2. Within nine months of the entry into force of this law, the requirements for access to the Land Registry for urban lease contracts shall be established by regulation.

Third additional provision. Deposit of bonds.

The Autonomous Communities may establish the obligation for the lessors of urban property subject to this law to deposit the amount of the deposit regulated in article 36.1 of this law, without accruing interest, at the disposal of the regional administration or the public body designated until the termination of the corresponding contract. If, one month after the end of the contract, the regional administration or the competent public body does not refund the amount deposited, it will accrue the corresponding legal interest.

Fourth additional provision. Aid for access to housing.

Persons who, in application of the provisions of the second transitory provision of the present law, are deprived of the right to subrogation mortis causa granted to them by the revised text of the Urban Rental Law, approved by Decree 4104/1964, of 24 December, shall be preferential subjects of public aid programmes for access to housing, provided that they comply with the maximum income requirements established in such programmes.

Fifth additional provision. Amendment of the Code of Civil Procedure.

1. Article 1.563 of the Code of Civil Procedure shall read as follows:

“«1.Eviction for non-payment of rents, similar amounts or amounts paid by the tenant in the renting of dwellings or in the renting of a habitable urban property in which professional, commercial or industrial activities are carried out, may be enervated by the lessee if, at any time prior to the date set for the trial, he pays the plaintiff or makes available to him in court or at the notary’s office the amount of the sums on the basis of which the claim is ineffective and the sums due at that time.

2.º This enervation shall not take place when another enervation has taken place previously, nor when the lessor has requested, by any means that allows the proof of payment to be provided, payment to the lessee four months prior to the filing of the claim and the lessee has not paid the amounts due at the time of such filing.

3.º In any case, the filing of the claim must indicate the circumstances that may or may not allow enervation. Where applicable, the Court will indicate in the summons the duty to pay or to consign the amount before the trial takes place.

2. Appeals against judgments in the matters referred to in article 38 shall be handled preferentially both before the Provincial Hearings and before the Superior Courts.

In the proceedings leading up to the launch, the defendant shall not be admitted to appeal and appeal proceedings, where applicable, if he does not prove that the income due and those payable under the contract are paid in advance, or if he does not lodge them in court or by notary public.

If the lessee does not comply with the foregoing, the judgment shall be final and shall be enforced, provided that the court or tribunal seised of it does not comply with its obligation to pay or deposit within five days.

An appeal or appeal filed by the tenant, regardless of the state in which it is located, shall also be deemed to be void if, during the course of the proceedings, the tenant fails to pay the instalments that are due or those that must be brought forward. However, the lessee may, as a precautionary measure, advance or record the payment of several unmatured periods, which shall be subject to liquidation once the judgment is final. In any event, the payment of such amounts shall not be deemed to be contractual novation.

3. Article 1,687.3 of the Code of Civil Procedure shall read as follows

“Article 1,687.3.

The sentences dictated by the Hearings in the eviction trials that have no special regulation, except those dictated in the eviction trial for non-payment of rent, those dictated in the proceedings on urban leases followed by the proceedings of the cognition trial, in this last case when they were not in conformity with the dictated in the first instance, and the relapses in the retraction trials, when in all the cases they reach the

However, in the case of the rental of a dwelling, it is sufficient if the amount exceeds 1,500,000 pesetas.

The appellate and first instance judgments shall be deemed to be in conformity even if they differ as regards the imposition of costs.

Sixth additional provision. Census of urban leases.

1. The Government shall proceed, through the Ministry of Public Works, Transport and the Environment, within one year of the entry into force of this Act, to draw up a census of the rental contracts for dwellings subject to this Act that remain in force after its entry into force.

2. This census shall include information identifying the lessor and the lessee, the rent of the contract, the existence or not of review clauses, their duration and the date of the contract.

3. To this end, the lessors must send the Ministry of Public Works, Transport and the Environment, within a maximum period of three months from the entry into force of the law, the details of the contract referred to in the previous paragraph.

4. The lessees will have the right to request the inclusion in the census referred to in this provision of their respective contracts, giving written notice to the lessor of the data sent.

5. Failure to comply with the obligation provided for in the previous paragraph 3 shall deprive the lessor who has failed to comply with it of the right to the tax benefits referred to in the fourth final provision of this law.

Seventh additional provision. Amendment to Law 36/1988, of 5 December, on Arbitration.

A number 3 is added to Article 30 of Law 36/1988 of 5 December on Arbitration, the content of which shall be as follows:

“In arbitration proceedings involving contracts subject to the legal regime of the Urban Rental Law, in the absence of an express agreement between the parties, the arbitrators shall render the award within three months, as provided in number 1 of this article.

Eighth additional provision. Right of return.

The right of return regulated in the fourth additional provision. 3º of the consolidated text of the Law on Land and Urban Planning, approved by Royal Legislative Decree 1/1992 of 26 June 1992, shall be governed by the provisions of this provision and, failing that, by the provisions of the consolidated text of the 1964 Urban Rental Law.

When, in the case of isolated, non-expropriatory urban development work required by urban planning, it is necessary to proceed with the total demolition or complete restoration with conservation of the façade or structure of a building in which there are rented urban dwellings, regardless of the date of the lease, the lessee shall be entitled to have the lessor of the aforementioned property provide him with a new dwelling of an area of at least 50 per cent of the aforementioned property, provided that he has at least

Ninth additional provision. Declaration of the handicapped situation.

For the purposes of this law, the situation of disability and its degree must be declared, in accordance with current legislation, by the centres and services of the competent Public Administrations.

Tenth additional provision. Prescription.

All rights, obligations and actions resulting from the leasing contracts contemplated in the present law, including those subsisting at the entry into force of the same, shall expire, when there is no specific statute of limitations, in accordance with the provisions of the general rules contained in the Civil Code.

First transitional provision. Contracts concluded on or after 9 May 1985.

1. The housing lease contracts entered into as of May 9, 1985, which are still in force on the date of entry into force of this law, shall continue to be governed by the provisions of Article 9.Royal Decree-Law 2/1985 of 30 April 1985 on economic policy measures and the provisions for the tenancy agreement in the revised text of the Urban Rental Act, approved by Decree 4104/1964 of 24 December 1964.

Paragraphs 2 and 3 of the second transitional provision shall apply to such contracts.

The tacit renewal provided for in article 1,566 of the Civil Code shall be for a period of three years, without prejudice to the option of non-renewal provided for in article 9 of this law. Renewed leases shall be governed by the provisions of this Act for housing leases.

2. Lease contracts for business premises entered into on or after 9 May 1985 and still in force on the date of entry into force of this law shall continue to be governed by the provisions of article 9 of Royal Decree-Law 2/1985 of 30 April 1985 and the consolidated text of the 1964 Urban Leases Act. In the case of tacit renewal in accordance with the provisions of article 1,566 of the Civil Code, the renewed lease shall be governed by the rules of the present law relating to leases for use other than housing.

The provisions of the foregoing paragraph shall apply to leases similar to tenancy and business premises leases entered into on or after 9 May 1985 and still in force on the date of entry into force of this Law.

Second transitional provision. Housing lease agreements entered into before 9 May 1985.

A) Applicable regulatory regime.

1. Housing leases entered into before May 9, 1985, which are still in force on the date of entry into force of this law, shall continue to be governed by the rules relating to the tenancy agreement in the revised text of the 1964 Urban Leases Act, except for the amendments contained in the following paragraphs of this transitional provision.

2. Articles 12, 15 and 24 of this Law shall apply to such contracts.

3. Section 24(1) of the Consolidated Urban Rental Act 1964 shall no longer apply.

The rights of pre-emption and withdrawal, regulated in Chapter VI of the Consolidated Text of the Urban Rentals Act of 1964, shall not apply in cases of adjudication of housing as a result of the division of common property where the rental contracts have been granted after the constitution of the community on the property, nor in cases of division and adjudication of common property acquired by inheritance or legacy.

B) Extinction and subrogation.

4. As from the entry into force of this law, the subrogation referred to in article 58 of the revised text of the 1964 Urban Rentals Act may only take place in favour of the tenant’s spouse who was not legally or de facto separated or, failing that, of the children who lived with him or her during the two years prior to his or her death; in the absence of the foregoing, the ascendants of the tenant who were dependent on him or her and lived with him or her for at least three years before the date of his or her death may be subrogated.

The contract shall be terminated upon the death of the subrogate, unless the subrogate is a child of the lessee not affected by a disability of 65 per cent or more, in which case it shall terminate two years later or on the date on which the subrogate reaches the age of 25, whichever is the later.

However, if the surrogate is the spouse and at the time of his/her death there are children of the tenant living with him/her, there may be a further subrogation. In this case, the contract shall be terminated after two years or when the child reaches the age of 25 years, whichever is the later, or on the death of the child if he or she is disabled as referred to in the preceding paragraph.

5. Upon the death of a person who, in accordance with the provisions of articles 24.1 and 58 of the consolidated text of the 1964 Urban Rentals Act, had been subrogated to the tenant’s position before the entry into force of this Act, only his or her spouse who was not legally or de facto separated may be subrogated and, failing that, the tenant’s children who lived in the rented dwelling and had lived with him or her during the two years prior to his or her death.

The contract shall be terminated on the death of the surrogate, unless the child of the tenant who is not affected by a disability of 65 per cent or more is disabled, in which case it shall terminate at the age of two years or when the child reaches the age of 25, whichever is the later.

No further subrogations are permitted.

6. Upon the death of the person who, in accordance with section 59 of the revised text of the 1964 Urban Rental Act, occupied the dwelling by second subrogation, no further subrogation is authorized.

7. The rights recognised in paragraphs 4 and 5 of this provision for the tenant’s spouse shall also apply to the person who has been living permanently with the tenant in a relationship of affectivity analogous to that of the spouse, regardless of sexual orientation, for at least the two years prior to the date of death, unless they had children in common, in which case mere cohabitation shall suffice.

8. During the ten years following the entry into force of the law, if the subrogation provided for in paragraphs 4 and 5 above has been in favour of children over sixty-five years of age or who are recipients of public benefits for retirement or permanent disability with a degree of total permanent incapacity or major invalidity, the contract shall be terminated upon the death of the surrogate child.

9. It is up to the persons who exercise the subrogation referred to in paragraphs 4, 5 and 7 of this provision to prove the condition of cohabitation with the deceased tenant that for each case proceeds.

The condition of cohabitation with the deceased tenant must be habitual and necessarily exist in the rented dwelling.

The provisions on procedure and order of priority set forth in article 16 of this Law shall apply to subrogation by reason of death regulated in paragraphs 4 to 7 above.

In no case may the beneficiaries of a subrogation waive it in favour of another of different priority status.

C) Other rights of the lessor.

10. For lease annuities that begin after this law takes effect, the landlord has the following rights:

10.1 For Wealth Tax purposes, the value of the leased property shall be determined by capitalisation at 4% of the accrued income, provided that the result is less than that which would result from the application of the valuation rules for real estate provided for in the Wealth Tax Law.

10.2 You may demand from the Hirer the total amount of the Real Estate Tax corresponding to the rented property. When the quota is not individualized, it shall be divided in proportion to the surface area of each dwelling.

10.3 The lessee may be charged the amount of the repair work necessary to maintain the dwelling in a condition to serve the agreed use, in the terms resulting from article 108 of the revised text of the 1964 Urban Rental Act or in accordance with the following rules:

1) That the repair has been requested by the tenant or agreed by a final judicial or administrative resolution.

In the case of several affected tenants, the application must have been made by the majority of the tenants concerned or, where applicable, by tenants representing the majority of the share quotas for the affected apartments.

2º From the capital invested in the expenses incurred, the public aid or aid received by the owner will be deducted.

3º To the invested capital will be added the amount of legal interest on the money corresponding to said capital calculated for a period of five years.

4º The lessee shall pay annually an amount equivalent to 10 per cent of the amount referred to in the previous rule, until full payment.

In the case of several lessees affected, the amount referred to in the previous rule shall be distributed among them in accordance with the criteria established in Article 19(2) of this Law.

5º The annual amount paid by the tenant may not exceed the lesser of the following two amounts: five times his current income plus the amounts assimilated to it or the amount of the minimum interprofessional wage, both considered in their annual calculation.

10.4 If the lessor has chosen to carry out the repercussion in accordance with the aforementioned Article 108, the repercussion shall be proportional to the area of the property concerned.

10.5 The lessee may be charged the amount of the cost of the services and supplies produced as from the entry into force of the law.

Exception is made in the event that by express agreement between the parties all these costs are borne by the lessor.

D) Updating of the rent.

11. The rent of the contract may be updated at the request of the lessor after a reliable request to the lessee.

This requirement may be fulfilled on the date on which, as from the entry into force of the law, an annuity of the contract is fulfilled.

Once this requirement has been made, in each of the years in which this update is applied, the lessor must notify the lessee of the amount of the update, accompanied by a certification from the National Statistics Institute that the indexes determining the notified amount are significant.

The update will be carried out according to the following rules:

1.The rent initially agreed in the contract that gave rise to the lease must be maintained, during each of the annuities in which the update is carried out, with the updated rent, the same proportion as the National General Index of the Consumer Price Index System or the National General Index or Urban General Index of the Life Costs Index System of the month prior to the contract date with respect to the Index corresponding to the month prior to the update date.

In the case of leases of dwellings covered by Article 6.2 of the Consolidated Text of the Urban Leases Act of 1964 entered into before 12 May 1956, the initial rent shall be the revalued rent referred to in Article 96.10 of that consolidated text, whether or not it was required by the landlord at the time and, as an index corresponding to the date of the contract, that of June 1964.

In the case of rentals for dwellings not covered by Article 6.2 of the aforementioned consolidated text, concluded before 12 May 1956, the rent received in July 1954 shall be taken as the initial rent and the index corresponding to the date of the contract shall be the month of March 1954.

2º Of the updated rent corresponding to each annual period calculated in accordance with the provisions of the previous rule or of Rule 5, only the percentage resulting from the provisions of the following rules shall be payable by the lessee if this amount is greater than the rent paid by the lessee at that time plus the amounts assimilated to the rent.

In the event that applying the corresponding table of percentages results in the income being paid at that time being higher than the amount corresponding to the application of such tables, the immediately higher percentage, or where appropriate the next or subsequent percentage or percentages that apply, will be applied until the amount of the updated income payable is higher than the amount being paid.

3º The updated income will absorb the amounts assimilated to income from the first annuity of the review.

Amounts treated as rent for these purposes only shall be deemed to be the cost to the lessee of the increase in the cost of the services and supplies referred to in Article 102 of the recast text of the Urban Rental Law and the cost of the works referred to in Article 107 of that law.

4º From the year in which the one hundred percent discount is reached, the rent payable may be updated by the lessor or by the lessee in accordance with the percentage variation experienced in the previous twelve months by the General Index of the System of Consumer Price Indices, except where the contract expressly contains another discount system, in which case the latter shall apply.

5º When the discounted income calculated in accordance with the provisions of Rule 1 is higher than that resulting from the application of the provisions of the following paragraph, the latter shall be taken as the revised income.

The rent for this purpose will be determined by applying the following percentages to the cadastral value of the leased property in force in 1994:

12 per cent, where the cadastral value is the result of a revision which took effect after 1989.

24 per cent for the rest of the cases.

For properties located in the Basque Country, the percentage of 24% will be applied to the cadastral value; for properties located in Navarre, the percentage of 12% will be applied to the cadastral value.

6.The tenant may object to the update of the rent by notifying the lessor within thirty calendar days of receipt of the request, in which case the rent paid by the tenant until that time, increased by the amounts assimilated to it, may be updated annually only on the basis of the variation in the National General Index of the System of Consumer Price Indices in the 12 months immediately preceding the date of each update.

The lease contracts in respect of which the tenant exercises the option referred to in this rule shall be extinguished within a period of eight years, even in the event of subrogation, such period being counted from the date of the lessor’s reliable request.

7º The updating of rent provided for in this section shall not be applicable when the sum of the total income received by the lessee and the persons who habitually live with him/her in the rented dwelling does not exceed the following limits:

The income to be considered will be the totality of the income obtained during the tax year prior to the year in which the lessor promotes the updating of the income.

In the absence of proof by the tenant of the income received by all persons living in the rented dwelling, it shall be assumed that the intended update is appropriate.

8º In those cases in which the update is not applicable, the rent paid by the tenant, increased by the amounts assimilated to it, may be updated annually in accordance with the variation experienced by the General Index of Consumer Prices in the twelve months immediately prior to the date of each update.

9º The updating of the rent, when applicable, will be carried out within the following periods:

a) In ten years, when the total income received by the tenant and the persons who habitually live with him/her in the rented dwelling does not exceed 5.5 times the minimum interprofessional wage.

In this case, the following percentages of the discounted rent shall be required:

b) In five years, when the sum is equal to or greater than 5.5 times the minimum inter-professional wage.

In this case, the percentages of the discounted income shall be twice as high as those referred to in point (a) above.

(10) The provisions of this subsection shall supersede the provisions of section 100(1) and (4) of the Consolidated Text of the Urban Rental Act of 1964 for the rental of dwellings.

Third transitional provision. Lease contracts for business premises, concluded before 9 May 1985.

A) Applicable regulatory regime.

1. Lease contracts for business premises entered into before 9 May 1985 and still in force on the date of entry into force of this Law shall continue to be governed by the provisions of the consolidated text of the Urban Leases Act of 1964 relating to the lease of business premises, except for the amendments contained in the following paragraphs of that transitional provision.

B) Extinction and subrogation.

2. The contracts that on the date of entry into force of this law are in a situation of legal extension shall be terminated in accordance with the provisions of paragraphs 3 to 4 below.

3. Rentals for which the tenant is a natural person shall be extinguished upon retirement or death, unless the tenant’s spouse subrogates and continues the same activity on the premises.

In the absence of a surviving spouse to continue the activity or, if the spouse has been subrogated, upon his or her retirement or death, if at that time twenty years have not elapsed since the adoption of the law, the contract may be subrogated to a descendant of the tenant who continues the activity carried out on the premises. In this case, the contract will last for a sufficient number of years until the end of twenty years from the entry into force of the law.

The first subrogation provided for in the preceding paragraphs may not take place when two transfers have already taken place in the lease in accordance with the provisions of article 60 of the revised text of the Urban Rental Law. The second subrogation provided for may not take place where there has already been a transfer in the lease in accordance with the provisions of the said Article 60.

The current tenant and his or her spouse, if they have been subrogated, may transfer the business premises under the terms set out in article 32 of the revised text of the Urban Rental Law.

This transfer will allow the continuation of the lease for a minimum of ten years from its completion or for the number of years remaining from the time the transfer is made to compute twenty years from the adoption of the law.

When in the ten years prior to the entry into force of the law there has been a transfer of the business premises, the periods referred to in this section shall be increased by five years.

For the purposes of this section, the date of transfer shall be that of the deed referred to in Article 32 of the consolidated text of the 1964 Urban Rental Law.

4. Leases of business premises where the lessee is a legal entity shall be extinguished in accordance with the following rules:

1º The leasing of premises in which commercial activities are carried out, in twenty years.

For these purposes, commercial activities are considered to be those included in Division 6 of the Business Tax Rate.

With the exception of premises larger than 2,500 square metres, in which case extinction will occur in five years.

2) Leases of premises in which activities other than those referred to in Rule 1 are carried out to which quotas correspond according to the rates of the Business Tax:

Less than 85,000 pesetas, in twenty years.

Between 85,001 and 130,000 pesetas, in fifteen years.

Between 130,001 and 190,000 pesetas, in ten years.

Over 190,000 pesetas, in five years.

The quotas to be taken into consideration for the purposes of this section are the minimum municipal quotas or minimum quotas according to the tariff, which include, where appropriate, the area allowance, corresponding to the 1994 financial year. In those activities to which a reduction in the Economic Activity Tax quota corresponds, this reduction will be applied to the minimum municipal quota or minimum quota according to tariff for the purposes of determining the corresponding amount.

The periods of time referred to in the foregoing rules shall run from the date of entry into force of this Act. When the business premises have been transferred during the ten years prior to this entry into force, the termination periods for the contracts shall be increased by five years. The date of transfer shall be that of the deed referred to in Article 32 of the consolidated text of the Urban Rental Law.

When activities are carried out in a premises with different quotas, only the largest quota shall be taken into consideration for the purposes of this paragraph.

It is the responsibility of the lessee to provide proof of the fee corresponding to the activity carried out in the leased premises. In the absence of proof, the lease shall be for the minimum duration referred to in the first subparagraph.

5. Contracts in which, on the date of entry into force of this law, the term agreed in the contract has not yet expired shall last for the remainder of the term to be met. Where this period of time is shorter than that which would result from the application of the rules in paragraph 4, the lessee may extend the lease for the period resulting from the application of those rules.

In the cases provided for in this paragraph and in paragraph 4, the tacit renewal shall be governed by the provisions of article 1,566 of the Civil Code, and the rules of this law relating to the rental of urban property for use other than housing shall be applicable to the renewed lease.

C) Update of the rent.

6. As of the entry into force of this law, on the date on which the contract expires each year, the rent of the leases of business premises may be updated, at the request of the lessor, following a reliable request to the lessee in accordance with the following rules:

1º The income initially agreed in the contract that gave rise to the lease must maintain with the updated income the same proportion as the National General Index of the System of Consumer Price Indices or the National General Index or the Urban General Index of the System of Cost of Living Indices of the month prior to the date of the contract with respect to the index corresponding to the month prior to the date of each update.

For contracts concluded before 12 May 1956, the revalued rent referred to in Article 96(10) of the said consolidated text, whether or not it was required by the lessor or not, shall be taken as the initial income and the index corresponding to the date of the contract shall be that of June 1964.

2º Of the updated rent corresponding to each annual period calculated in accordance with the provisions of the previous rule, only the percentage resulting from the percentage tables provided for in the following rules shall be payable from the lessee in accordance with the corresponding updating period, provided that this amount is greater than the rent paid by the lessee at that time plus the amounts assimilated to the rent.

In the event that applying the corresponding table of percentages results in the income that was being received at that time is higher than the amount that corresponds in application of such tables, the immediately higher percentage, or if applicable the next or subsequent corresponding percentage, will be applied until the amount of the updated income is higher than the amount that was being received without the update.

3º In the case of leases to which, in accordance with the provisions of section 4, a five or ten year period of extinction corresponds, the rent review shall be carried out in accordance with the following table:

4º In the case of leases covered by subsection 3, and in those to which, in accordance with the provisions of subsection 4, a period of extinction of fifteen or twenty years corresponds, the rent review shall be carried out in accordance with the percentages and periods provided for in Rule 9a(a) of subsection 11 of the second transitional provision.

5º The updated income will absorb the amounts assimilated to income from the first annuity of the review.

Amounts treated as rent for these purposes only shall be deemed to be the cost to the lessee of the increase in the cost of the services and supplies referred to in Article 102 of the consolidated text of the Law on Urban Rentals and the cost of the works referred to in Article 107 of that law.

6º From the year in which the 100% discount rate is reached, the rent payable may be updated by the lessor or by the lessee in accordance with the percentage variation experienced in the previous twelve months by the General Index of the System of Consumer Price Indices, except where the contract expressly contains another updating system, in which case the latter shall apply.

7º The provisions of this paragraph shall replace the provisions on leases of business premises in section 100(1) of the Consolidated Text of the Urban Leases Act of 1964.

8º In order to determine the date of conclusion of the contract, the date on which it was signed shall be taken into account, regardless of whether the current tenant is the original tenant or the person subrogated in his position.

7. The lessee may review the rent in accordance with the provisions of rules 1, 5 and 6 of the previous section in the first rent to be paid, based on the request for review made by the lessor or on his own initiative.

In this case, the minimum period of duration provided for in paragraph 3 and the periods provided for in paragraph 4 shall be increased by five years.

The provisions of the preceding subparagraph shall also apply in the event that the rent being paid at the time the law enters into force is greater than that resulting from the updating provided for in paragraph 7.

8. The rent review provided for for the contracts referred to in paragraph 3 and for those referred to in paragraph 4 which have an expiry period of fifteen or twenty years shall not apply when the lessee opts not to apply it.

To this end, the lessee must notify the lessor in writing of his intention within a period of thirty calendar days following receipt of the lessor’s request for review of the rent.

Lease contracts in respect of which the lessee exercises the option of not revising the rent shall expire when the fifth annuity counted from the entry into force of this law expires.

D) Other rights of the lessor.

9. For contract annuities starting from the entry into force of this law and until the termination of the contract, the provisions of section 10 of the second transitory provision shall also apply to these contracts.

E) Other rights of the lessee.

10. The lessee shall be entitled to an indemnity equal to eighteen monthly payments of the rent in force at the time of termination of the lease if, before the expiry of one year from the date of termination of the lease, any person begins to carry out the same or related activity on the premises as the lessee. Related activities are those activities which are typically capable of benefiting, even if only in part, from the customers attracted by the activity carried on by the lessee.

11. Upon termination of the lease in accordance with the provisions of the preceding paragraphs, the lessee shall have a preferential right to continue in the leased premises if the lessor intends to enter into a new contract with another lessee within one year of the legal termination of the lease.

To this end, the lessor shall give the lessee a reliable notice of its intention to enter into a new lease, the rent offered, the essential terms of the lease and the name, address and circumstances of the new lessee.

The right of first refusal to continue in the rented premises in accordance with the conditions offered must be exercised by the lessee within thirty calendar days from the date of the notification, and the contract must be signed within this period.

The lessor, after the expiration of a period of thirty calendar days from the notification without the lessee having signed the proposed lease, must formalise the new lease within one hundred and twenty calendar days from the notification to the lessee whose contract has expired.

If the landlord has not given the notice or fails to give any of the requirements or if the agreed rent, the person of the new tenant or the other essential conditions of the contract are different, the tenant whose contract has been terminated shall be entitled, by operation of law, to be subrogated to the new lease within sixty calendar days from the date on which the landlord reliably sends him a copy of the notice.

The lessor is obliged to send the lessee whose contract has expired a copy of the new contract concluded within one year of its termination within fifteen days of its conclusion.

The exercise of this preferential right shall be incompatible with the receipt of the compensation provided for in the preceding paragraph, the lessee being entitled to choose between the two.

12. This transitional provision shall apply to contracts for the letting of business premises for pharmacies concluded before 9 May 1985 and still existing on 31 December 1999.

Fourth transitional provision. Assimilated leases entered into before 9 May 1985.

1. Lease contracts assimilated to tenancy contracts referred to in Article 4.2 of the Consolidated Urban Rental Law of 1964 and those assimilated to business premises contracts referred to in Article 5.2 of the same legal text, concluded before 9 May 1985 and still in force at the time of the entry into force of this Law, shall continue to be governed by the provisions of that consolidated text applicable to them, except for the amendments contained in the following paragraphs of that transitional provision.

2. Leases treated as tenants shall be governed by the provisions of the third transitional provision. For these purposes, contracts entered into by the Catholic Church and by non-profit-making corporations shall be deemed to be equivalent to those referred to in Rule 2 of Section 4 to which a term of 15 years corresponds. The others shall be deemed to be equivalent to those referred to in Rule 2 above to which a 10-year period of extinction applies.

3. Leases similar to those of business premises shall be governed by the provisions of the third transitional provision for leases of premises referred to in Rule 2 of section 4 to which a quota of more than 190,000 pesetas corresponds.

4. The leases of urban properties in which professional activities are carried out shall be governed by the provisions of the previous section.

Fifth transitional provision. Rentals of social housing.

Rentals of social housing that survive the entry into force of this Act shall continue to be governed by the regulations applicable to them.

Sixth transitional provision. Legal proceedings.

1. Title V of this law shall be applicable to disputes relating to urban property leases that subsist on the date of entry into force of this law.

2. The provisions regarding the value of the claim and the conformity of the judgments are excepted, which shall be immediately applicable to appeals in the case of disputes concerning leases of business premises in which the judgment of the Provincial Court has been issued after the entry into force of the present law.

Single derogating provision. Provisions to be repealed.

Without prejudice to the provisions of the transitional provisions of this Law, Decree 4104/1964 of 24 December 1964 approving the revised text of the 1964 Law on Urban Rentals, Articles 8 and 9 of Royal Decree-Law 2/1985 of 30 April 1985 on Economic Policy Measures and any other provisions of equal or lesser rank which are contrary to the provisions of this Law are hereby repealed.

The Decree of 11 March 1949 is also repealed. This derogation shall have effect in the territorial scope of each Autonomous Community when the provisions referred to in the third additional provision of this law are enacted.

First final provision. Nature of the law.

This law is enacted under article 149.1.8 of the Constitution.

Second final provision. Entry into force.

This law shall enter into force on January 1, 1995.

Paragraph 3 of the second transitional provision shall enter into force on the day following the publication of this law in the “Official State Gazette”.

Transfers of business premises occurring on or after the date indicated in the preceding paragraph shall be considered to have occurred on or after the entry into force of the law.

Third final provision. Publication by the Government of the Consumer Price Indices referred to in this law.

The Government shall, within one month of the entry into force of this Law, publish in the “Official State Gazette” a list of the Consumer Price Indices from 1954 until the entry into force of this Law.

Once the list referred to in the previous paragraph has been published, the National Statistics Institute, when announcing the successive modifications of the Consumer Price Index on a monthly basis, shall also record the variation in the proportion with the base index for 1954.

Fourth final provision. Compensation for tax purposes.

The Government will proceed, one year after the entry into force of the Act, to submit to the Cortes Generales a bill to establish a system of tax benefits to compensate landlords, in the case of contracts concluded before 9 May 1985 which survive the entry into force of the law, for as long as the contract remains in force, where such lessors do not enjoy the right to review the rent of the contract pursuant to Rule 7.Paragraph 11 of the second transitory provision of this law.

Therefore,

I command all Spaniards, individuals and authorities, to keep this Law and to ensure its observance.

Madrid, 24 November 1994.

JUAN CARLOS R.

The President of the Government,
FELIPE GONZALEZ MARQUEZ

 


.-Preamble
.-Titel 1 Ambit of the law
.-Titel II. Of housing leases
.-Titel III. Rentals for other than residential use
.-Titel IV. Common provisions
.-Title V. Rental processes


 Toni Marqués. Real Estate specialist

Don’t hesitate to contact me for free information.  +34 678 216 706   toni@palmalawyers.com