Adventures in Spain

What can be life in Spain for non Spaniard

Catalan Laws

    If you haven’t faced with real estate business market in Spain yet, you probably won’t know all pitfalls. One of them is the Leases of old rent, they call it here Renta Antigua, which is really messy.
I accidentally ran into it when I was working as Real State agent for one company. In Spain you don’t need to have a special license or to have previous experience as a broker. It seems deceptively easier. Once I was looking for properties for one of my clients and saw many cheap properties in an unbeatable area, which were listed in different real estate companies in Barcelona. When I was calling to ask for more information, the first question they were asking was: Is it for personal use or investment? It was partly for investment, so they were explaining that these offers were with one remark, they had Renta Antigua contract. This basically means that in the property currently live tenants, and they are allowed to live there until they die, like by law. The payment for a lease is just ridiculous. It may be an apartment of 70 m2, located in a historic neighborhood, and rent for these tenants is around 400 euros. What the contract Renta Antigua does mean, and how is it possible?

Those are contracts signed at the end of the 50s and were applied to favor access to housing in times of need. All those contracts signed in these times didn’t have expiration dates. These rentals entail a forced extension until the death of the tenant, which also applies to their spouses or descendants. Lease agreements signed before May 9, 1985, according to transitory provision 2 of the Urban Leases Act (LAU) of 1994, remain in force at the time of entry into force, to the rules related to the tenancy contract, that is the LAU of 1964, for which there exists a regime of forced extension or what is the same, that the rent has an indefinite character for the tenant of the dwelling (Article 57) LAU 1964). But also on 1/1/1995 comes into force Article 58 of the Law LAU 29/94, which claims that only 2 subrogations of these housing lease agreements are allowed. Which means that there is an expiring date, in theory. For instance, dad can subrogate the lease to his son and this son to his kids.
So, basically, owners or their inheritors, who rented their properties in the 50s and signed those contracts, now can’t get rid of the tenants and their descendants? The owner can get it back if he confirms that an apartment he rented out is the only place to accommodate himself. But in fact, it seems like only a few owners have this situation, or it is too difficult to resolve it since there are still many properties with Leases of old rent.

And since the currency of those times was peseta, a rental price equals the same amount as it was indicated in the old contracts, but converted to euros. And usually, it is too little to be true.
While I was searching for more information, preparing this post, I found out there are some tricks, which probably can help to resolve the problem for the owners who want to get their properties back.

There is a property tax, in Spain, it is called IBI, which should be paid every year to the government. Usually, it is funded by the owner of the property and has nothing to do with the lease contract. But it says that the owner can request this tax to be paid by tenants. It says on the Section 10.2, C of the Second Transitory Provision which establishes that for all housing lease agreements, which entered into prior until May 9, 1985, that the lessor shall be entitled to demand the payment of the property tax rate, and no matter if it is said in the contract or not. It’s just the owner who can claim that a tenant didn’t pay the IBI, and he is violating the contract agreements.

Non-payment of the IBI might be the violation of the housing lease agreement signed under the LAU of 1964, as is indicated in the Judgment of the Provincial Court of Madrid (Section 21) of November 27, 2015. Regarding the Sentence of the Plenary Session of the Supreme Court of January 12, 2007, there can be demand for eviction for non-payment of the IBI as an amount assimilated to the rent in a contract prior to the entry into force of the LAU. If there is some lawyer, who can prove it or disprove, please, leave a comment below. That is all that I found and thought it could be useful, interesting, and not too long to read.

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