Renting as permanent, temporary or vacation housing: three options for the new housing law

The implementation of the draft law on the right to housing prepared by the government and its partners, which aims to solve the problems of accessibility to housing in Spain, is expected to be protracted, and the sector does not expect a final draft law before the second half of 2022 or even until 2023.

However, “the rent control systems announced under the concept of “burdened residential areas” have already begun to bring about decisions on the part of both landlords and tenants,” said Jesús Duque, vice president of the Alfa Inmobiliaria broker network, which includes more than 225 agencies (125 of them in Spain and another 100 internationally).

This concept includes three main measures: the forced extension of rents by three years, so that three more years are added to the initial 5 or 7 years, depending on whether the owner is an individual or a company, and the possible extension of three years, in addition to a possible tacit extension of the contract. The second important measure is the freezing of the rental price for the contract. The landlord may only increase the price by a maximum of 10% if the property has been renovated or if the contract has been signed for more than 10 years. Third and last, the rent is limited to the reference price index for large tenants.

“Similar measures have already been taken in other cities such as Berlin, New York, San Francisco, Toronto, etc., where it has not been possible to solve the housing problem and the situation could become even more complicated, as many owners are already considering selling their homes for fear of government interventionism and taking advantage of the price increase that the sector has experienced, and many other investors are looking for other destinations for their initiatives,” he adds.

Tourist rentals: are by no means valid for all cases.

In the most popular destinations and in very specific areas of these places, this type of rental can be the most profitable solution. However, after the outbreak of the pandemic, this type of rental accounted for no more than 2% of the total number of rental properties.

Although this type of contract is excluded from the new Housing Law, the inconveniences associated with managing a property for tourist rental have discouraged most owners from this model. The management of a property under this scheme requires a tourism license approved by the Autonomous Community, which requires compliance with certain requirements, starting from the urban planning aspects that the property must meet (e.g. direct access from the public road), to the equipment (air conditioning, wifi, etc.), to the services offered (tourist information about the area, availability of a complaint form), approval of the community of owners, etc.

But you also have to be able to receive and continuously attend to customers, manage the cleaning of the property, have an active presence on certain Internet platforms…. A series of issues that require time and money, Duque concludes, which is why the transition from conventional accommodation to the tourist modality is not happening.

Temporary or month-to-month rentals are a way to earn additional income and continue to use the property.

If nothing changes, this segment would also be excluded from the measures proposed in the new regulation, since the temporary rental falls into the category of uses other than residential. “This contract is designed to cover the tenant’s need for non-permanent housing, but also when there are reasons such as work or training,” affirms Duque. Therefore, those who opt for this type of contract must choose a tenant who lives in the city for one of these two reasons, since the typology of this contract establishes this requirement, among others.

In this case, the signed document must specify the reason for the term of the contract and the place of habitual residence of the tenant, which must be different from the rented apartment. If these conditions are met, the lease can be extended from a few months to several years.

This type of contract also offers the advantage that rents in this case tend to be higher than in long-term rentals. “Another advantage is that many foreign tourists or retirees are willing to pay a high rent during the winter months, when Spaniards are not as interested in using a house or apartment on the Spanish coast, so they can visit family and friends in their home countries during the summer months, when it is warmer in the rest of Europe,” Duque adds.

More information you may obtain contacting the professionals of the law firm Despacho Lamas in Palma de Mallorca by +34 971 720 202


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