lesson 3 leases condensed

definition

• a lease is a contract where the lessor grants the lessee the use of a thing ie property for a certain time in exchange for price ie rent

• the use is transferred not ownership

characteristics

consensual contract= formed by mere agreement of the parties with no special formalities required

• contract exists once parties agree on object and price

• a verbal agreement can create a valid lease

onerous contract= both parties receive a benefit

• the lessor receives rent and the lessee receives the right to use the property

atypical contract= regulated by multiple laws depending on the situation not one single framework

• spanish civi code, law on urban leases and the law on rural leases

continuous performance= obligations occur over a time unlike sale contracts which involve one time obligations

• the landlord must allow the continued use during the lease and the tenant must pay rent regularly ie monthly/weekly

regulation of leases in spain

• the civil code art 1546- 1582 regulates general leasing rules

  • rights and obligations of lessee and lesser

  • rent

  • duration

  • termination

• however the special laws (laws on urban and rural leases) take priority so the civil code only applies subsidiarily when special laws do not regulate the issue

contractual freedom art 1255cc

parties may freely decide on contractual terms including :

• rent price

• duration

• conditions of use

• obligations

however there are many mandatory rules in the LAU

• mandatory rules cannot be modified by agreement

  • they protect tenants especially in residential leases

  • removing tenant protecting rights= an invalid clause

• dispositive rules apply only if parties do not agree otherwise thus can be changed by contractual agreement

  • allows for greater contractual freedom

  • can modify maintenance obligations and payement arrangements

law on urban leases LAU

the lau regulates urban property leases including

• houses and apartments

• commercial premises and offices

there are 2 categories

• residential leases art 2 lau= properties used as the tenants permanent residence

  • these require strong tenant protection through many mandatory rules

    • renting a flat as your home

• non residential leases art 3 lau= properties not used as a permanent resident

  • these leases allowed greater contractual freedom

    • shops, offices, warehouses, seasonal rentals over 2 months continuous stay, Erasmus student housing

    • short term tourist rentals fror under 2 months continuous stay eg air b n b are regulated by regional tourism laws not the lau

the law on rural leases

The LAR regulates agricultural land

• farmland

• vineyards

• livestock farms

it includes provisions for

• lease duration

• rights and obligations of farmers and land owners

• termination

• protection of agricultural activity

essential elements of a lease

five elements are required

• parties/consent

• object

• payment/rent

• duration

• form

contracting parties

the lessor is the person who grants use of the property

• lessor obligations civil code art 1554

  • deliver the property= the property must be suitable for its intended use ie a habitable dwelling

  • carry out necessary repairs= structural problems, electrical issues, plumbing

  • guarantee peaceful enjoyment= tenant must be able to use property without disturbance or legal problems ie ownership claims

• lessor rights:

  • receive rent

  • recover property after lease

  • demand proper use

the lees is the person who uses the property and pays rent

• lees obligations art 1555cc

  • pay rent= must be paid at the agreed time

  • proper use= property must be used according to the contract and to its nature ie an apartment cannot be used as a factory

  • care for the property= the tenant must act with reasonable care

  • return the property art 1561-1564= the property must be returned in the same condition except for normal wear and tear

object of the lease art 1545cc

• the object is the thing whose use is trasnfered ie apartment or commercial premises

• requirements

  • must be lawful

  • must be possible to use

  • must be identifiable

• ownership of the object does not trasnfer only a temporary right of use

rent art 1543cc

• rent is the price paid for use

  • without rent there is no lease contract

• requirements

  • usually periodically not a lump sum ie monthly or weekly

  • must be determined/ determinable

  • must be real

duration

• a lease must always be temporary

• the duration can be express= ends automatically when the agreed term expires

• tacit renewal art 1566cc= if tenant remains 15 days without objection after the lease ends a new lease arises automatically

  • duration of the renewal art 1567= depends on rent calculation and is shorter than the original lease

    • monthly rent= 1 month lease

    • yearly rent= 1 year lease

form of contract art 37 lau

• leases follow freedom of form so can be written or verbal

• however either party may request a written contract and is recommended for proof and legal certainty

maintenance olbigations in lau

• landlord obligations art 21= must perform all necessary repairs to maintain habitability

  • they cannot increase the rent due to maintenance during the lease

  • roof, plumbing, electrical systems, heating

• tenant obligations= must inform the landlord of repairs and if not completed in a possible reasonable time

  • art 28= tenant may terminate if the property becomes uninhabitable

  • art 26= tenant may suspend or terminate if the property becomes unusable

  • the tenant is responsible for normal wear and tear ie minor damage to appliances and furniture

improvements under lau

improvements= works increasing value or quality of the property

• improvement by tenant art 22-23lau= improvements require landlord consent

  • unauthorised structural changes allow the landlord to terminate the lease and require restoration

• improvement by the landlord= tenants must tolerate improvements if they cannot be postponed

  • if enjoyment is significantly reduced they are entitled to a temporary rent reduction

  • art 19= rent increases for improvements are allowed but not during the first

    • 5 years for an indidual landlord

    • 7 years for a company landlord

rent and expenses

• rent is freely agreed by the parties in contract and is usually paid monthly

• rent updates art 18= a landlord may only update the rent if the lease agreement contains a clause allowing

  • even if permitted updates can be made once per year with at least one months notice before it applies

  • must be linked to inflation/index

• expenses art 20= tenants pay only what is explicitly stated in the contract otherwise the landlord pays

  • community fees, waste collection, common area maintenance

right of first refusal art 25 lau

if landlord sells the property the tenant has preferential purchase rights

• premeption= tenant can buy before sale to a third party

• redemption= the tenant can replace the new buyer if the sale occurred without notification

security deposit art 36

• a security deposit guarantees against unpaid rent and damages

• for a residential lease= 1 month

• for a non residential lease (Erasmus)= 2 months

• must be returned within 1 month after the lease ends if there is no debts

• deposit cannot be used as final rent payement

trasnfer of tenant rights

• assignment art 8.1 is when the entire lease is transferred to a new tenant

  • this requires landlords written consent

• sublease art 8.2= tenant rents the property to a third person but remains the tenant

  • requires landlord consent

  • cannot be the whole property

  • sublease cannot exceed main lease duration or payement

• intervivos subrogation art 15= occurs during a tenants lifetime

  • court allows a spouse to become the new tenant in case of divorce to protect the family home

• mortis causa subrogation art 16= occurs when a tenant dies so relatives may contuse the lease

  • must have lived with the tenant

  • used the dwelling as their main residence

  • notified the landlord within 3 months of death

termination of the lease

• tenants unilateral decision art 11= tenants may terminate if 6 months have passed since the lease+ 30 days notice given

  • compensation possible if expressly provided= one months rent for each year of the contract remains

• abandonment art 12= spouse or partner may continue the lease

• sale of property= the lease continues with the buyer becoming the new landlord (surrogated)

• loss of landlord right art 13=if the landlord loses ownership or a superior right prevails the lease may be challenged

  • if the lease is registered it binds the new owner

  • if the lease in unregistered it may be terminated and the tenant can claim damages for loss suffered

  • tenant may be protected if acting in good faith

• destruction of property art 28= lease automatically terminates

• breach art 27= must be serious to justify termination; minor may only lead to claim for damages

  • landlord breach= failure to repair or interference with use

  • tenant breach= unpaid rent for 1+ month , unauthorised sublease, serious damage, illegal use

    • landlord cannot self help to remove the tenant remedies must be judicial

    • claim payement for areas plus interest

    • can claim damages too for losses incurred

eviction art 1569

• eviction is. legal action to recover possession of a property when a tenant refuses to leave after:

  • lease experiation

  • non payement of rent

  • breach of contract

  • refusal to vacate

• procedure

  • landlord files eviction claim

  • court reviews case

  • court issues eviction judgement

  • if the landlord wins the tenant must vacate the property and loses the legal right to remain

• tenant removal must occur through court process preventing arbitrary eviction

  • a landlord cannot self help eviction through changing locks eg

ejection ie physical removal

• if the tenant remains after judgement authorities carry out the physical removal of the tenant and their belongings

• this is the final stage of eviction enforcement

eviction vs ejection

• eviction is the courts legal process for whether a tenant has the right to remain via judicial decision

• ejection is the physical enforcement of removal by authorities