The imminent entry into force of the new Law on Temporary Rentals, Rooms, Tourist Accommodation and Other Short-term Rentals will mean a significant change in the property market in Spain.
The aim of this legislation, which regulates the short-term rental of dwellings, is to combat the abuse of temporary contracts and to promote transparency in the sector.
The new regulation is in line with the requirements set by the European Union for Member States in Regulation (EC) No 2024/1028 of the European Parliament and of the Council of 11 April 2024 on the collection and exchange of data on short-term accommodation rental services and amending Regulation (EC) No 2018/1724.
The future law on temporary letting will come into force on 2 January 2025.
In this article, we break down the key aspects of this new legislation and how it will affect landlords and tenants.
1. CONTEXT AND AIM OF THE NEW LAW
In recent years, the proliferation of temporary leases has led to tensions in the property market, especially in cities such as Madrid.
Many landlords have used temporary contracts as a means of circumventing the rules applicable to the rental of permanent dwellings, which has led to precarious situations for tenants.
The new law has two main objectives:
- To ensure that temporary contracts are only used for specific circumstances, such as business travel, study or medical treatment.
- To regulate the impact of tourist rentals on the housing market, especially in areas of high demand.
The new law on temporary rentals applies to
– Tourist apartments
– Holiday rentals
– Temporary rentals for study purposes
– Temporary rentals for work
It applies to the whole dwelling as well as to the rooms.
2. COMPULSORY REGISTRATION OF TEMPORARY RENTAL ACCOMMODATION
One of the key points of the new regulation is the creation of an official register of temporary rental properties. From 2 January 2025, all landlords wishing to rent out a property for a short period will have to register it in this register.
Highlights of the mandatory register
- Unique identification number: Each property will be given a number that will be required for marketing, especially on digital platforms such as Airbnb or Idealista. This unique identification number will be valid for 12 months and must be renewed annually.
- Penalties: Failure to register can result in significant financial penalties for owners.
This register will not only increase transparency in the sector, but will also make it easier for local authorities to monitor compliance.
3. LEASES: JUSTIFICATION REQUIREMENTS
The law stipulates that temporary rental contracts must contain a clear justification of their temporary nature. This means that
– The landlord and tenant must state the reason that justifies the use of the temporary contract (e.g. job transfer or study).
– It is compulsory to attach documents to prove the reason, such as an employment contract or a university enrolment.
This requirement aims to prevent temporary contracts from being used for permanent residential purposes, a practice that has been common in the past to circumvent the restrictions of the Urban Leases Act (LAU) on long-term contracts.
This tendency to regulate short-term rental contracts was also included in Law 12/2023 of 24 May on the right to housing.
4. PRICE CEILINGS IN STRESSED MARKET AREAS
In areas declared to be stressed, prices for temporary rentals are subject to limits set by the local authorities. These areas are defined as areas where access to housing is particularly difficult due to high rental costs in relation to the average income of residents.
Impact on Madrid:
As one of the cities with the highest rental demand, Madrid is in the crosshairs of these restrictions.
It is important to be aware of the limits set in each neighbourhood or district.
5. OBLIGATIONS FOR DIGITAL PLATFORMS
The new regulations also impose responsibilities on digital platforms that act as intermediaries in the rental of housing.
The main obligations include
- Verification of registrations: Platforms must ensure that the properties advertised are registered in the official register and comply with legal requirements.
- Removal of illegal advertisements: Unregistered properties may not be advertised on these platforms, at the risk of sanctions for both the owners and the platforms themselves.
6. LEGAL IMPLICATIONS FOR LANDLORDS AND TENANTS
The implementation of this regulation has important legal consequences for both parties.
- For landlords: They will need to ensure that their properties comply with the legal requirements, including registration and justification of the duration in the contracts. It is also important to avoid the misuse of temporary contracts, as this could lead to legal and financial penalties.
- For tenants: The regulation gives them greater protection against abusive practices and ensures that temporary contracts are strictly in line with their original purpose.
The new law on temporary leases is a major change in the rental market in Spain, especially in a city like Madrid.
With an emphasis on transparency and the protection of the rights of the parties involved, it seeks to regulate a sector that has operated with few restrictions.
In view of this new regulation, at Quikprokuo we take on the following tasks
– Advising property owners on their new obligations: From registering properties to drafting contracts that comply with the law.
– Defending the rights of tenants: Helping to identify possible irregularities in contracts and asserting claims in the event of breaches.
– Reviewing existing contracts: Adapting temporary lease models to ensure compliance with new legislation.
Contact us to ensure you understand all aspects of this legislation and adapt effectively to this new regulatory framework.
