Law 12/2023, enacted on May 24, grants the right to housing and introduces key changes to Spain’s real estate market. This legislation mainly affects major landlords by imposing rent limits, mandatory extraordinary lease extensions, and new requirements for eviction procedures.
Who is considered a major landlord?
Under the Housing Law, major landlords are individuals or legal entities owning more than ten urban residential properties (excluding garages and storage units) or over 1,500 m² of built residential space. This threshold drops to five properties in areas designated as stressed residential markets.
Stressed residential market areas
Each autonomous community determines the designation of a stressed residential market area based on the following criteria:
- The cost of a mortgage or rent, including utilities, exceeds 30% of the average household income.
- Purchase or rental prices have increased by over three percentage points over the five years preceding the area’s designation.
The designation of a stressed residential market area significantly affects housing lease agreements, especially if the landlord qualifies as a major landlord.
New obligations for major landlords
Rent price caps
Major landlords must set initial rent amounts in stressed areas according to reference indices established by the Ministry of Housing and Urban Agenda.
Extraordinary lease extensions
Tenants can request up to three years of extraordinary lease extensions for agreements in stressed areas once the mandatory or tacit extensions under Articles 9.1 and 10.1 of the Urban Lease Law (Law 29/1994, November 24) have concluded. Outside stressed areas, tenants demonstrating social and economic vulnerability may request an additional one-year extension.
Eviction procedures
Major landlords face additional requirements when initiating eviction proceedings. They must provide:
- A document from the relevant social services, valid for up to three months, with prior consent from the occupant.
- A sworn declaration confirming that the landlord contacted social services within five months before filing the claim without receiving assistance within two months of the request.
- A social services document certifying the tenant’s refusal to have their financial situation reviewed, valid for no more than three months.
If the tenant is deemed economically vulnerable, landlords must also undergo a reconciliation or mediation process with the tenant before the eviction claim is accepted.
Information and transparency
Major landlords with properties in stressed residential markets must cooperate with public authorities and provide detailed information on their properties’ use and purpose.
Conclusion
The Housing Law introduces stricter regulations for major landlords in Spain, requiring swift adaptation and adequate legal counsel to mitigate risks and ensure compliance with new obligations.
Daniela Suescún
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