When signing a rental contract, owners and tenants usually have certain doubts, and not only about the expenses that must be paid each one, but also on their duration. Although many people sign 1-year rental contracts, what they do not always know is that the urban rental law (LAU) allows them to stay in the home for a minimum period of 5 years, even if the contract indicates a shorter duration.
This is because the regulations establish a system of mandatory extensions. Specifically, article 9 establishes that, if the contract is signed for a shorter period, it will be automatically extended year by year until it reaches 5 years (or 7 years if the owner is a company). However, the tenant may decide not to renew the contract in each extension if he or she notifies it with legal notice.
In practice, this means that a 1-year contract does not force the tenant to leave the home at the end of that period, since they have the right to continue in the property if they wish. Furthermore, this extension works as a right of the tenant, not the owner. That is to say, the owner cannot prevent it or refuse to renew it as long as the legal conditions are met.
The owner can only recover the home before 5 years in very specific cases
Although the law protects the stability of the tenant, it also contemplates exceptional situations in which the owner can recover the home before that minimum period has elapsed.
Article 9 itself states that this is only possible when the landlord needs the home for his own use, for his immediate family or for his spouse in the event of separation or divorce.
However, it is not enough to claim it. For it to be valid, it must be expressly stated in the contract and the landlord must notify the tenant at least two months in advance. Furthermore, if the tenant does not ultimately use the home for that purpose, the tenant can file a claim and the law allows him or her to choose between returning to the home or receiving financial compensation for the damages caused.
After 5 years, the contract can continue to be extended for up to 3 more years
Once the mandatory minimum period of 5 years has been reached (or 7 if the landlord is a company), the regulations do not require the contract to be terminated automatically. In fact, it may continue to spread.
Article 10 of the Urban Leasing Law establishes that, if neither party communicates its desire not to renew, the contract is automatically extended for annual periods up to a maximum of 3 additional years. In these cases, the landlord must give at least four months’ notice and the tenant at least two months in advance if they do not want to renew.