Every economic crisis sees an increase in the underground economy and rogue traders. In this article we highlight the most common rental contract breaches.
The legal framework of urban leases is regulated by the Urban Leases Law (LAU) and despite having a well-established jurisprudence there are numerous examples of malpractice by both landlords and tenants.
Frequent breaches of the rental contract by landlords
Requesting more than two months of additional guarantees
Due to the fear of possible non-payments, there are landlords who demand more than two months of additional guarantees from tenants, a practice contrary to the latest reform of the LAU, through RD 7/2019, of 1 March, which limits additional guarantees to a maximum of two monthly payments in general.
Denying the extension for up to 5 or 7 years
According to the Law on Urban Leases, tenants have the right to stay in the property for up to 5 years, or 7 years if the landlord is a legal entity. It can happen that the property owner fraudulently uses the cases that the law contemplates as causes of necessity for own use in order to cut this period.
Using residential rentals as if they were tourist rentals
Another fraudulent practice aimed at not applying the minimum period of 5 years is to chain rental contracts of a duration of normally less than one year with the same tenant in order to avoid the right of extension. In this case, case law has already detected this practice, ruling in several cases that if the tenants can prove that the purpose of the leases is the habitual and permanent residence, this contract, in theory a seasonal contract, automatically becomes a housing rental contract, regulated by the LAU, and not a tourist or seasonal rental contract.
Bad practice in the allocation of subsidised rental housing
Unfortunately, it is very common practice for a landlord to reserve a flat in a subsidised housing development for his own use or to reserve the storage rooms assigned to other dwellings for his own personal use, when these should be given to the tenants.
Frequent breaches of the rental contract by tenants
Non-payment of rent
Late payment is the most common breach of contract and the one that most worries landlords. The causes may or may not be legitimate, but preventive measures such as good screening of the potential tenant or taking out rental insurance can help to minimise the negative impact of these situations.
Damage and lack of maintenance of the property
Another fear for landlords is when the tenant causes major damage to the property or performs poor maintenance to an extent that sometimes cannot be covered even with the amount of the security deposit deposited. Again, a good screening, checking that there are insurance policies that cover content on the part of the tenant and building on the part of the property and when it is necessary to initiate legal proceedings in an agile manner can minimise and recover the losses caused.
Using the amount of the security deposit as payment of one month’s rent
Article 36 of the LAU regulates everything that has to do with the security deposit, the LAU does not authorise the tenant to substitute the security deposit for one month’s rent. In spite of this, it is an illegal and widespread practice that, fearing that the property will not return the deposit, tenants do not pay the last month’s rent in the hope that it will be deducted from the month’s deposit.
The tenant wants to leave the property before the end of the contract
The tenant of a property has a legally recognised right to withdraw from the rental contract before reaching the agreed duration, this right is regulated in article 11 of the Law on Urban Leases (LAU) and applies to all residential rental contracts that have been concluded from 6.06.2013 onwards.
The tenant can legally withdraw from the lease of the property as long as he/she has been in the property for a minimum of SIX MONTHS with a minimum notice of 30 days before leaving the property. If the 30 days’ notice is not given, the tenant can also be charged the penalty for the notice. In the event that the tenant leaves before the sixth month, the landlord can also claim the months of rent that have elapsed until the sixth month has elapsed.
However, the law also establishes that if it is agreed in the contract, the tenant will have to compensate the landlord with an amount equivalent to one month’s rent for each year that has not been completed, or the proportional part.
Sharing the dwelling with adults who are not included in the rental agreement
If other adults take up residence in the property on a regular basis, they must be included in an annex to the contract stating that the new tenant joins the original contract and is subrogated to all the rights and obligations of the main contract together with the previous tenants and that he/she will be jointly and severally liable for the obligations established in the contract.
This protects the rights and obligations of both parties.
Having a registered property administrator manage the flat you rent as an owner or live in as a tenant will help you avoid unnecessary conflicts, count on us.