The end of a rental contract does not always imply that the tenant has to leave the property. In Spain, the Urban Leasing Law (LAU) includes different rental extensions that, under certain circumstances, allow for the duration of the contract to be extended for several years.
These extensions can be applied automatically, depend on the will of the parties, or be linked to special situations, such as the economic vulnerability of the tenant or the location of the property in a tense residential market area.
With the entry into force of the Law for the Right to Housing and the successive modifications of the rental regulations, doubts about the actual duration of contracts have multiplied. Many owners are unaware of when they can recover their property and numerous tenants are unaware that the law recognizes their right to remain in it for longer than initially agreed.
What are rental extensions
Rental extensions are the legal mechanisms that allow a lease contract to remain in force once the initially agreed term has expired between the owner and the tenant.
In practice, most habitual housing contracts do not end when the first year expires, but continue to be extended until reaching the minimum duration established by law.
Not all extensions work the same. Some occur automatically by legal imperative, while others require the tenant to expressly request them or for neither party to express their intention to terminate the contract.
The mandatory extension: up to five or seven years
The first protection established by the Urban Leasing Law is the so-called mandatory extension.
Although the owner and tenant have signed a one-year contract, the tenant can continue living in the property until the minimum period provided by law is completed.
Currently, that period is: Five years, when the owner is a natural person. Seven years, when the landlord is a company or a legal entity.
During that time, the owner cannot terminate the contract simply because the initially signed term has expired.
The only exception provided is that they need to recover the property to convert it into their habitual residence or that of certain relatives, as long as the requirements established by law are met.
What happens when the five or seven years end
Once the mandatory minimum period has ended, the contract does not necessarily terminate.
If neither party communicates their intention to terminate the lease within the legal deadlines, the so-called tacit extension comes into effect.
This allows the contract to continue renewing for annual periods for a maximum of three additional years.
Consequently, a habitual housing rental can typically reach: Eight years, when the owner is a natural person. Ten years, when the landlord is a company.
The new extraordinary extensions
The current legislation also provides for extraordinary extensions for certain cases.
One of them protects tenants in situations of economic and social vulnerability. In these cases, an extraordinary extension of up to one year can be requested when the ordinary extensions provided for in the Urban Leasing Law end.
On the other hand, the Housing Law introduced a new specific extension for homes located in areas of tense residential market.
When the legal requirements are met, the tenant can request an extension of the contract for a maximum of three additional years, generally maintaining the same rental conditions.
Can the owner refuse?
It depends on the type of extension. During the mandatory extension and the tacit extension, the owner's margin of action is very limited.
In extraordinary extensions, there are also cases where the landlord is obliged to accept them, especially when they have the legal status of a large holder.
However, there are exceptions. For example, when the owner needs to recover the home to reside in it or when both parties voluntarily agree to sign a new contract.
Can the rent increase during an extension?
Yes, although not in any way. The extension of the contract does not mean that the rent remains frozen.
The rent can be updated if the contract includes a review clause and always respecting the legal limits in force at each moment.
What the owner cannot do is use the extension to unilaterally modify other conditions of the contract or demand a new negotiation simply because the initial term has expired.
What is the difference between an extension and a new contract?
It is one of the most frequent doubts. When there is an extension, the same contract remains in force, with the same rights and obligations for both parties.
On the other hand, a new contract implies extinguishing the previous one and starting a completely different legal relationship, with new conditions that must respect the limits established by current legislation.
This difference is especially important in municipalities declared tense zones, where the regulations limit the possibility of increasing the rent when signing new contracts.
The sale of the property does not eliminate extensions
Another common mistake is to think that selling a property automatically ends the rental contract. The legislation protects the tenant during the extension periods provided by the Urban Leasing Law.
Therefore, the sale of the property does not necessarily mean that the new owner can demand the immediate eviction of the tenant. Everything will depend on the specific circumstances of the contract and the moment in which the transfer of the property occurs.
What landlords and tenants should do before the contract expires
As the end date of the rental approaches, it is advisable to carefully review the contract and check: the exact date of signing; whether the owner is a natural or legal person; the extensions already enjoyed; the notice periods; whether the property is in a tense zone; whether there are circumstances of vulnerability that allow requesting an extraordinary extension.
A simple difference of a few days in sending the notice can determine that the contract is automatically extended for another year.
Types of rental extensions
| Type of extension | Maximum duration | How is it applied? |
|---|---|---|
| Mandatory extension | Up to 5 or 7 years | Automatic by law |
| Tacit extension | Up to 3 years | If neither party communicates the termination |
| Extraordinary extension due to vulnerability | 1 year | Must be requested by the tenant |
| Extraordinary extension in a tense zone | Up to 3 years | Must be requested by the tenant |