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On March 5, 2019, Royal Decree Law 7/2019, dated March 1, of urgent measures in the field of housing and rent, the Official State Gazette (BOE), the Urban Rental Law (LAU)came into effect.
Here are some of the most important aspects included in the new regulations:
  • Extension of the minimum term of the lease to FIVE YEARS if the Landlord is a natural person and at SEVEN YEARS if it is a legal entity.
  • The tacit extension of the contract is extended to THREE YEARS.
  • The prior notice to avoid the extension is set at FOUR MONTHS, by the Landlord, and TWO MONTHS, by the Lessee.
  • The annual update of the rent cannot exceed the increase of the CPI, despite the establishment of a state system of reference indexes to monitor the market.
  • When the Landlord is a legal entity, they will bear the costs of real estate management and the formalization of the contract.
  • The landlord / natural person's need to occupy the rented property must be expressly stated in the lease, after the FIRST YEAR of the contract.
  • The additional contract guarantee is limited to TWO-month rent.
  • The Tax on Capital Transfers and Documented Legal Actsin the signing of rental contracts forstable and permanent use is suppressed.
This measure will be applied in the new lease agreements subscribed startingon March 6th 2019. Contracts signed previously will continue to be ruled by the legal system in force at the time of their formalization.

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