As of the end of 2020, one in four people in Spain were renting their home.
Although this number is slightly below the European average of 30%, numbers have been growing rapidly in recent years with many struggling to afford to save enough to get their foot on the property ladder.
If you rent a property, you might be wondering whether you can leave your rental contract early.
Even if you are not considering terminating your contract early, it is important to understand your rights as a tenant and where you stand in the event that you do need to end the agreement early.
Below we aim to cover this question.
Can I terminate my rental contract early?
The answer is yes. Legally you are within your rights to cancel the contract and leave the property early.
However, there could be financial consequences involved if you choose to do so.
Spain’s Urban Lease Law (Ley de Arrendamientos Urbanos) says that a tenant may leave a property early, but ONLY if six months or more of the contract has passed. So you have to have been living at the property for at least six months.
The financial penalty that you could incur is because legally, you have to pay one month's rent for every year of the contract you fail to complete.
For example, if you have a 12-month contract and stay for just over six months and decided to vacate early, you would incur a penalty of one month's rent which would cover up to the first year.
If your rental agreement was for five years and you left after one year, you would have to pay four months' rent as compensation to the landlord. This is for the four years of the contract you failed to fulfill.
So if you have been at the property for at least six months, you can come out of your contract, however, as highlighted above, you may have to pay a financial penalty.
The only other condition of canceling a rental contract is that the tenant must give the landlord a minimum of 30 days' notice that they intend to cancel the agreement and vacate the property.
It is important to note that any potential compensation MUST be contained within a clause in the contract. If there is no mention of any compensation, you would be free to leave the property without incurring a penalty. You must still give your landlord 30 days' notice though.
So as you have probably determined, if you are unsure at the time of signing
a contract how long you will be staying, it would be better to err on the side of caution and agree to a 12-month contract. That way if you leave early, any penalties you incur will not be too large.
If you agree to a five-year contract and want to leave early, the penalties could be substantial.
It is also important to note that the tenant may also legitimately terminate the contract early in the event that:-
Can the landlord terminate the contract early?
Yes, but only under unusual circumstances.
If for example the landlord or one of their direct relatives needs to occupy the property themselves they may do so but only if this is written into the contract.
The clause is only applicable if the tenant has been living in the property for at least 12 months. The landlord must also give the tenant at least two months' notice.
This also only applies where the landlord is an individual and not a business.
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