Spanish law differentiates between urban leases (arrendamientos urbanos) and ground leases (arrendamientos rústicos).
The Urban Leases Act differentiates between commercial and residential leases, with a more protective legal regime applying to tenants holding urban residential leases. Commercial leases are governed firstly by the agreement of the landlord and the tenant and, in the absence of agreement, by the Title III of the Urban Leases Act (Sections 29-35). As an additional right, the Civil Code will be applied.
The Ground Leases Act (Ley de Arrendamientos Rústicos) applies to ground leases, such as the lease of a farm including all machinery and the right to cultivate crops, etc. The ground leases are governed by what is expressly agreed by the parties, as long as they do not oppose the Ground Leases Act, in default of express regulation by the Civil Code, and, failing that, applicable custom and practice.
For hotels, a regular lease is relatively rare. The parties will either agree upon a management contract or will let the hotel building, together with its inventory, on the basis of a fixed rent plus a rent based on the income of the hotel.
Last modified 13 Mar 2025
There is no minimum length laid down for commercial leases.
Last modified 13 Mar 2025
The legal framework is the same for all leases. They are governed by the provisions of the Urban Leases Act (as amended by Royal Decree Law 7/2019 (Medidas Urgentes en Materia de Vivienda y Alquiler) or the Civil Code.
Under Royal Decree 235/2013, a copy of the energy efficiency certificate must be provided to the tenant on the execution of a new lease. Industrial premises are excluded from this obligation.
Last modified 13 Mar 2025
The Spanish Civil Code provides for an automatic right to renew the term of the lease tacitly for periods equal to the term for which the rent has been fixed (months, quarters, etc) if the term of the lease comes to an end and none of the parties express an intention to terminate the lease. This right can however be waived if so provided in an agreement.
Last modified 13 Mar 2025
If a fixed-term lease has been agreed then notice of termination is not necessary. A termination notice is only required if the lease is for an unlimited term or the parties made other specific provisions requiring this.
The Spanish Civil Procedure Law establishes a procedure for obtaining the eviction of the premises if the tenant does not hand over the leased property to the landlord once the lease has expired. The landlord is entitled to file a claim to recover possession, once the claim is accepted for processing, the tenant shall have ten days to respond in writing. Within five days after the answer to the claim, the Court Legal Secretary shall appoint the parties to a hearing which shall take place within a maximum term of one month from the appointment.
The legal proceedings term may vary from six months to one year until repossession of the leased property.
Last modified 13 Mar 2025
Where the parties agreed on a fixed-term lease, the landlord may only terminate the agreement before its expiry in the event of a material breach of the lease by the tenant. The Spanish Civil Procedure Law establishes a procedure for obtaining the eviction of the premises if the tenant does not hand over the leased property to the landlord once the lease has expired. The landlord is entitled to file a claim to recover possession, once the claim is accepted for processing, the tenant shall have ten days to respond in writing. Within five days after the answer to the claim, the Court Legal Secretary shall appoint the parties to a hearing which shall take place within a maximum term of one month from the appointment.
The legal proceedings term may vary from six months to one year until repossession of the leased property.
Last modified 13 Mar 2025
No, neither the government nor any other authority may directly intervene to terminate a lease. Leased property can be subject to compulsory purchase but this is fairly infrequent and is subject to strict conditions.
However, the purchaser of a leased property may try to terminate the agreement on the grounds of the change of ownership. To avoid these situations, it would be advisable to register the lease at the relevant Land Registry. The cost and expenses involved in the registration are the main disadvantages in this regard.
To avoid the change of ownership of the leased premises entailing the termination of the lease agreement, it is common for the parties to agree a clause for which the new owner will be subrogated in the rights and obligations of the landlord. For this purpose, it is common that the landlord undertakes to inform the prospective new owner of the existence of the lease.
Last modified 13 Mar 2025
As well as the legal deposit prescribed by law, consisting of a sum equivalent to two months' rent for non-residential leases, most landlords ask for a sum by way of security equivalent to between six and 12 months' rent, either as a deposit or in the form of a bank guarantee. Parent company guarantees are also common via comfort letters.
Last modified 13 Mar 2025
Leases generally specify that the premises can only be put to a particular use. Tenants are also restricted by planning/zoning law to uses which have been approved by the planning/zoning authority or are in line with past uses of the property.
Last modified 13 Mar 2025
Under the Spanish Civil Code, parties are free to agree the conditions of the lease as they wish provided they don’t contravene any law or moral code, or pose a threat to public order.
Standard leases require the landlord's prior written consent to any alterations. If the landlord gives consent the tenant is often obliged to restore the premises to their original condition at the end of the lease. Alternatively, the parties can agree for any alterations to be left in place, in which case compensation may payable by the landlord. However, this depends on what the parties have negotiated.
Last modified 13 Mar 2025
When the leased property is used for a business or professional activity, the Spanish Urban Leases Act allows the tenant to sublet the property or assign the lease agreement without obtaining the landlord’s consent.
In the event of a partial sublease by the tenant the landlord is entitled to increase the rent by 10% and by 20% if the lease agreement is assigned or the property is completely sublet.
Any change in the identity of the tenant as a result of a merger, spin off or corporate transformation is not deemed to be an assignment, but the landlord is still entitled to increase the rent as set out in the previous paragraph.
The landlord must be notified of any assignment or subletting within one month of the date they were agreed.
Tenants can be prevented from transferring their rights to others by specific provisions in the lease agreement.
Last modified 13 Mar 2025
In agreements for the lease of retail premises it is not unusual to agree a variable rent (together with, or alternative to a fixed rent). The variable rent will be a percentage on the sales made in the premises and may either remain stable or be ratcheted linked to the level of sales.
Regarding fixed rent, the parties are free to agree whether there will be annual rent reviews or not. If no express mention is made, no review will take place. If a review is agreed in principle but no review system is specifically provided for, then the rent will be increased or decreased annually, in line with changes in the Competition Guarantee Index created by Law 2/2015, of 30 March, on De-indexation of the Spanish Economy.
In practice, in most leases, the rent will be increased or decreased annually, in line with the Spanish National Consumer Price Index (CPI) figures for the 12 months immediately preceding the date of each adjustment.
Last modified 13 Mar 2025
Other than the annual review, in leases longer than five years it is not uncommon for the parties to agree to a rent review mechanism based on an independent assessment of the market rent before agreeing on any adjustment. An expert will calculate the market rent for the property and the rent will then be increased or decreased accordingly.
Last modified 13 Mar 2025
Lease agreements on commercial premises that are owned and leased by businesses are subject to VAT at the rate of 21 percent.
Last modified 13 Mar 2025
Out-of-court claim for unpaid rent. A landlord may try to recover the outstanding rent or any other amounts due under the lease agreement by means of an extrajudicial claim before resorting to legal proceedings. This is usually done by sending a burofax (a postal service in Spain that is used to send and receive important documents securely) to the tenant, formally demanding payment of the overdue amounts. Sending this communication serves as an official request for payment and has a relevant impact in case the landlord subsequently wishes to initiate legal proceedings to recover the rents still unpaid. Particularly, if the tenant does not respond to the burofax, forcing the landlord to go to court to claim the outstanding amounts, the tenant would not have the opportunity to pay the outstanding amount as a way of avoiding the judicial proceedings.
Court proceedings to recover the unpaid rent. The landlord can take legal action to recover the unpaid rent by means of a judicial claim for the amount owed. This procedure is channelled through the so-called verbal trial (juicio verbal) which, within the two main types of procedure existing in the Spanish legal system, is the most expeditious.
Court proceedings for eviction. The landlord may also request the eviction of the debtor tenant. In this case, before filing the claim, the landlord must have formally requested payment from the tenant through an extrajudicial communication. Like the previous option, this action is carried out by means of the verbal trial after the filing of a claim which, in this case, for the repossession of the property.
Please note that it is possible to cumulate both actions of judicial claim for unpaid rent (2) and eviction (3) in the same procedure.
Draw on rent deposit. Alternatively, the landlord may be able to deduct the amount owed from the rent deposit, if any, in order to recover overdue rent or other amounts owed under the lease.
Last modified 13 Mar 2025
Most service charges, including taxes, will be passed on to the tenants or occupiers.
These taxes include VAT, payable at 21% of the rent charged if the tenant is using the premises to develop its business activities, and p a 19% withholding on account of the landlord's Corporate Income Tax or Personal Income tax, unless the landlord can provide a certificate issued by the Spanish tax authorities of being exempt from such withholding.
In most cases the tenant will enter into direct contracts with utility providers.
Last modified 13 Mar 2025
This depends on the contractual agreement, but service charges are generally passed on to the tenants pro rata.
Last modified 13 Mar 2025
Under the Urban Leases Act, the landlord is responsible for the maintenance and repair of leased property; however, the parties to a commercial lease are free to allocate this responsibility to the tenant.
Small repairs due to ordinary wear and tear will be borne by the tenant.
Last modified 13 Mar 2025
Contracts regarding telecommunications services are usually concluded with each tenant individually so there may be several telecommunications agreements affecting any one property. Contracts relating to utilities which serve multiple occupiers are usually agreed by the landlord, although the costs are normally transferred to the tenants by contractual agreement.
Last modified 13 Mar 2025
The parties need to agree on which insurance policies each of them should take out. It is very common for leases to provide for either the tenant or landlord to take out the following policies:
Last modified 13 Mar 2025
What types of arrangement does the law recognize which allow occupation and use of real property for a limited period of time?
Spanish law differentiates between urban leases (arrendamientos urbanos) and ground leases (arrendamientos rústicos).
The Urban Leases Act differentiates between commercial and residential leases, with a more protective legal regime applying to tenants holding urban residential leases. Commercial leases are governed firstly by the agreement of the landlord and the tenant and, in the absence of agreement, by the Title III of the Urban Leases Act (Sections 29-35). As an additional right, the Civil Code will be applied.
The Ground Leases Act (Ley de Arrendamientos Rústicos) applies to ground leases, such as the lease of a farm including all machinery and the right to cultivate crops, etc. The ground leases are governed by what is expressly agreed by the parties, as long as they do not oppose the Ground Leases Act, in default of express regulation by the Civil Code, and, failing that, applicable custom and practice.
For hotels, a regular lease is relatively rare. The parties will either agree upon a management contract or will let the hotel building, together with its inventory, on the basis of a fixed rent plus a rent based on the income of the hotel.
Last modified 13 Mar 2025