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In Spain, rental contracts are regulated under different laws depending on the purpose of the property. The main types of rental contracts are those for residential use under the Urban Leasing Act (LAU), tourist rentals, and contracts for non-residential use, which include seasonal rentals. Below, we explain the characteristics and differences between these contracts.

1. Residential Rental Contracts (LAU)

Residential rental contracts are regulated by the Urban Leasing Act (LAU) and are intended for tenants who will use the property as their permanent residence.

Key Features:

• Duration: The contract must last at least 5 years if the landlord is a private individual, or 7 years if the landlord is a legal entity (company). The contract can be renewed automatically, but the landlord may decide not to renew it under certain conditions.

• Security Deposit: A deposit equivalent to one month’s rent is required at the start of the contract. This deposit is returned at the end of the contract, provided there is no damage to the property.

• Rent and Adjustment: Rent can be adjusted annually according to the Consumer Price Index (CPI).

• Termination: The landlord may terminate the contract before the agreed period for specific legal reasons, such as the need for the property for their own use. The tenant also has the right to terminate the contract following the notice period set in the agreement.

2. Tourist Rental Contracts

Tourist rentals are intended for short-term stays, generally for less than 30 days, and are regulated by specific regulations that vary by autonomous community and municipality.

Key Features:

• Duration: Tourist rentals are typically for less than 30 days, aimed at people looking for temporary accommodation, generally in tourist or vacation areas.

• License and Registration: In many regions, the property must be registered as a tourist rental and the landlord must obtain a license to rent it out. This ensures the property meets safety and habitability requirements.

• Taxes: Property owners offering tourist rentals must comply with several tax obligations, including Income Tax (IRPF) on rental income, and in some cases, VAT (IVA) if additional services, such as cleaning, are provided.

• Rent: Rent is generally higher than residential contracts and can vary depending on the season, location, and demand.

• Security Deposit: A deposit may or may not be required, depending on local regulations or what the parties agree upon.

3. Non-Residential Use Rental Contracts (Including Seasonal Rentals)

Non-residential use rental contracts cover leases for purposes other than residential use. This category includes seasonal rentals, which are a specific form of temporary rental.

Key Features:

• Purpose: These contracts are used for commercial, industrial, or professional purposes, or for seasonal rentals in tourist areas. In seasonal rentals, the property is leased for a temporary stay, such as for holidays or short-term work.

• Duration: Non-residential use rental contracts are typically short-term and agreed upon by the parties. Seasonal rentals are usually less than 5 years and generally do not exceed a year. Unlike residential leases, there are no minimum duration requirements.

• Rent: Rent is flexible and is generally higher in tourist or seasonal rentals due to seasonal demand.

• Security Deposit: A deposit is not always required, but it is common for the landlord to request one, especially in seasonal rentals or commercial leases.

• Regulation: These contracts are governed by the Civil Code and do not offer the same protections as residential rental contracts under the LAU. There are no automatic renewal rights, and tenants do not have the same legal protections in case of eviction or contract termination.

• Termination: Non-residential use contracts, including seasonal rentals, end automatically once the agreed period is over. There are no automatic renewals as there are with residential leases.

Key Differences Between the Contract Types

Conclusion

In Spain, rental contracts are regulated based on the intended use of the property. LAU contracts are for residential leases and offer significant protection to tenants, while tourist rentals are for short stays and have specific local regulations. On the other hand, non-residential use rental contracts, which include seasonal rentals, are used for commercial purposes or temporary stays, offering more flexibility but less protection for tenants.

It’s important to understand the differences and regulations for each type of rental to ensure compliance with local laws and to protect the rights of both landlords and tenants.