Signing a one-year rental contract does not mean that the tenant has to leave the home at the end of that period. The Ministry of Housing itself clarifies in its frequently asked questions section that the tenant can remain in the property for at least five years without needing to renew the contract, as long as they want to continue in the home and the owner is a natural person.
Specifically, the Ministry explains that “the minimum rental period is precisely five years, if the landlord is a natural person (and seven if it is a legal entity), as long as the tenant wishes to continue in the home.” Furthermore, it adds that “once this minimum duration period has expired, the tacit extension is three years.”
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This is because article 9.1 of the LAU expressly states that, if the agreed duration is less than five years, “the contract will be obligatorily extended for annual terms until the lease reaches a minimum duration of five years.”
The owner cannot refuse the extension except in specific cases
When the housing rental contract is within these first 5 years, the landlord cannot prevent its continuity except in very specific situations included in the law.
One of them, which is included in article 9.3 of the LAU, which allows the home to be recovered before that period only when the owner needs to occupy it for himself, for first-degree relatives or for his spouse in the event of separation or divorce.
Of course, the law requires several requirements. The first of them is that it can only be recovered after the first year of the contract has passed and as long as the contract includes a clause that includes that possibility.
The landlord will then have to notify his tenant two months in advance that he needs the house or apartment for his personal use (or that of one of the indicated family members) and if he does not ultimately use the home for that purpose, the tenant can complain and choose between returning to the apartment or receiving financial compensation.
After 5 years, the rental can continue to be extended for up to 3 more years
Tenant protection does not automatically end when the minimum five years are reached, as explained by the Ministry of Housing when talking about the tacit extension of three years.
Article 10 of the Urban Leasing Law establishes that, if neither party communicates its intention to terminate the contract, it will be automatically extended for annual periods up to a maximum of three more years.
In these cases, the owner must give four months’ notice if he does not want to renew, while the tenant must give at least two months’ notice. If there is no such communication, the contract will automatically remain in force.