The Spanish Rental Law (LAU)
Residential rental contracts in Spain are governed by the Ley de Arrendamientos Urbanos (LAU — Urban Rental Law). The current version, significantly reformed in 2019 and updated since, provides strong protections for residential tenants while preserving landlords' rights to recover their property at the end of a lease. Understanding the LAU is essential for both landlords and tenants on the Costa del Sol.
Types of Rental Contract in Spain
There are three main types of residential rental arrangement in Spain:
- Long-term residential lease (arrendamiento de vivienda): The tenant's primary residence. Governed by LAU with strong tenant protections. Minimum contract duration of 5 years (7 years if the landlord is a company). This is the most common type for expats renting on the Costa del Sol.
- Seasonal / temporary rental: Not the tenant's primary residence — holiday lets, work assignments, students. Less regulated than residential leases. Duration and price agreed freely. Widely used for holiday rentals in Mijas.
- Tourist rental (VUT — Vivienda de Uso Turístico): Short-term tourist lets through platforms like Airbnb. Regulated by regional Andalucía rules — requires a VUT licence from the Junta de Andalucía and compliance with specific habitability standards.
Key Terms in a Spanish Residential Lease
Duration and renewal: A residential lease is automatically extended at the tenant's option for up to 5 years total (7 if landlord is a company). After that, the tenant can extend for 3 further years unless the landlord gives notice to the contrary 4 months before expiry. The landlord can only terminate before 5 years if they personally need the property as their primary residence (with 2 months' notice).
Rent increases: Annual rent increases cannot exceed the CPI (consumer price index) during the first 5 years. After 5 years, increases are subject to agreement but capped by reference indices.
Tenant's right to terminate: The tenant can terminate the contract after 6 months, giving 30 days' notice. Early termination penalties (if agreed in the contract) cannot exceed the equivalent of one month's rent per year remaining in the contract.
Deposits and Guarantees
Under the LAU, the landlord can require:
- Legal deposit (fianza): Compulsorily regulated at exactly 1 month's rent for residential leases. The landlord must deposit this with the Junta de Andalucía within 30 days of signing the contract.
- Additional guarantee: The landlord can request up to 2 additional months' rent in the form of a bank guarantee or cash deposit — making the total security up to 3 months' rent maximum.
The deposit must be returned within 1 month of the tenant vacating. If not returned, the tenant is entitled to legal interest on the amount. The landlord can only deduct proven damage beyond normal wear and tear, outstanding rent, or unpaid utility bills.
Eviction (Desahucio) in Spain
The Spanish eviction process has a reputation for being slow, but significant reforms have been made. For non-payment of rent (desahucio por impago), the process typically takes 6–12 months through the fast-track juicio verbal procedure. The process involves: filing a claim, the court issuing notice to the tenant, a judicial hearing, and finally enforcement by court officials (Letrado de la Administración de Justicia).
For illegal occupation (squatters — ocupas) without a valid rental agreement, a separate faster procedure exists. Landlords should seek immediate legal advice if a property is occupied without their consent — acting quickly and correctly from the outset makes a significant difference to the timeline.