The LAU Tenancy Law (Ley de Arrendamientos Urbanos)
The Spanish tenancy law "LAU" (Ley de Arrendamientos Urbanos) protects both tenants and landlords. It was introduced in 1994 and has been updated several times. The most recent reform of 2019 significantly strengthened tenants' rights.
Key points of the LAU:
- Minimum term: Contracts must run for at least 3 years
- Notice periods: Tenants can give 30 days' notice; landlords need good reasons
- Rent increases: Capped at the inflation index (IPC)
- Deposit: Maximum two months' rent
- Running costs: Should be listed separately
- Repairs: Landlord pays for structural damage, tenant pays for small repairs
The LAU applies to all rental contracts in Spain and cannot be varied to the tenant's disadvantage. Clauses that contradict this law are void. Before you sign a rental contract, you should find a suitable flat on Mallorca.
Tip: Know the law
Knowing the LAU protects you better against unfair contracts. Many landlords include clauses that contradict the law - a lawyer spots these immediately.
Structure of a Rental Contract
A Spanish rental contract consists of several standardised sections:
1. Header and Parties (Encabezamiento)
The landlord and tenant are listed with their full names and NIE/NIF numbers. Make sure your NIE is correct.
2. Description of the Property (Inmueble)
The address and floor area of the flat or house are described. It should state the number of rooms, the square metres and the furnishings (amueblada - furnished, or sin amueblar - unfurnished).
3. Rent and Running Costs (Precio del Alquiler)
The exact rent amount is stated, along with the running costs (gastos comunes) separately, if any. The payment method (usually bank transfer) and the payment date (normally the 1st of each month) are set out.
4. Duration and Renewal (Plazo del Contrato)
The start date and duration are stated. After 3 years the landlord can terminate under certain conditions; the tenant can give notice at any time with 30 days (the LAU standard).
5. Deposit (Fianza)
The amount of the deposit (usually 2 months' rent) is stated. The landlord must hold the deposit in a separate bank account and give you the bank's name.
6. Repairs and Maintenance (Reparaciones)
This clause is critical. It sets out who bears the cost of repairs. Standard: landlord pays for structural damage, tenant pays for small repairs.
7. Termination Provisions (Resolucion del Contrato)
The notice period is stated (normally 30 days). The conditions under which the landlord can terminate are also described.
8. Signatures
Both parties sign and date. You should receive an original signed copy.
Key Clauses Explained
Clause: Rental Duration and Renewal
What it means: The contract runs for at least 3 years. After that the landlord can terminate if they:
- Want to use the property themselves
- Want to sell it
- Plan major renovations
The tenant can give notice at any time with 30 days.
What to watch out for: Check whether the notice period is fair. Some landlords specify 60 days - this is common but not the LAU minimum. After 3 years the contract should continue automatically (tacita reconduccion) if neither party gives notice.
Clause: Rent Increase
What it means: The rent can be raised annually, but only up to the inflation index (IPC). The exact percentage should be in the contract, usually "IPC del ano anterior" (previous year's inflation).
What to watch out for: Make sure the clause does not allow an "arbitrary increase". Some landlords write "increase by agreement" - that is vague and could cause problems. Insist on a percentage increase in line with the IPC.
Clause: Deposit and Running Costs
What it means: The deposit (normally 2 months' rent) is held by the landlord in a separate account and returned at the end of the tenancy. Running costs (agua - water, basura - waste, ascensor - lift) are listed separately from the rent.
What to watch out for: Ask for the name of the bank and the account number where the deposit is held. That way you can check later that it has not been mixed with the landlord's personal funds. Running costs should be separate from the rent so you can see exactly what you are paying.
Caution: Deposits in private accounts
If the landlord puts the deposit into their personal account, that is illegal. The deposit must be held in a separate account or with a trustee. Insist on this in the contract.
Clause: Repairs and Maintenance
What it means: This clause sets out who pays for repairs.
- Landlord pays: Roof, facade, water and electrical lines, heating, structural damage
- Tenant pays: Small repairs, light bulbs, tap washers, door lock repairs
What to watch out for: Some landlords write "tenant pays all repairs" - this is probably not legal. Have a lawyer check whether the clause is fair. You should not have to pay for "normal wear and tear".
Clause: House Rules
What it means: This clause governs behaviour in the building (quiet hours, music, pets, etc.).
What to watch out for: Check whether pets are banned if you have one. Also check whether the quiet hours are too restrictive. Most contracts allow music until 22:00.
Clause: Insurance
Some contracts require contents insurance (seguro de contenidos). This makes sense for you, but it does not have to be mandatory.
Your Rights as a Tenant in Spain
Right to a Habitable Property
The landlord must keep the property in a usable condition. This means that water, electricity, heating and the roof must function properly.
Right to Repairs
You can demand repairs if the property has defects. The landlord is obliged to repair major damage. You can reduce the rent (Mietminderung) if the problem persists for an extended period.
Right to Give Notice
You can end the contract at any time with 30 days' notice, without giving a reason.
Right to Return of Deposit
Your deposit must be returned in full if the property is in good condition (normal wear and tear is accepted).
Right to Privacy
The landlord may only enter your home in an emergency (fire, flooding) or with prior notice (at least 24 hours).
Tip: Documentation is important
Take photos and videos when moving in and moving out. Document every condition in detail. This helps avoid disputes about the deposit.
Your Obligations as a Tenant
Paying Rent on Time
You must pay the rent on time, normally by the 1st of the month (or the agreed date). Late payment can constitute a breach of contract.
Maintaining the Property
You must keep the property in good condition. Make sure all utilities are working properly. This means:
- Regular cleaning
- No major damage (beyond normal wear and tear)
- Carrying out small repairs yourself (light bulbs, tap washers)
Paying Running Costs
If set out in the contract, you must pay running costs (water, waste, communal charges).
Observing House Rules
You must comply with quiet hours, noise restrictions and other house rules.
Respecting Your Neighbours
You must not cause disturbances that affect other tenants' quality of life.
Notifying the Landlord
If major damage occurs, you must inform the landlord.
Notice Rules and Contract Duration
Notice by the Tenant
You can end the contract at any time with 30 days' notice. The LAU gives the tenant this right without needing to state a reason. The notice period in the contract may be extended to up to 60 days, but it cannot be shorter than 30 days.
How to give notice:
- Write a formal notice letter (carta de desahucio)
- Address it to the landlord
- State the exact date of termination
- Send the letter by recorded post or by email with a read receipt
- Keep a record of it
Notice by the Landlord
The landlord can terminate the contract after 3 years under certain conditions:
- Own use: The landlord or their family wants to use the property themselves
- Sale: The landlord wants to sell the property
- Major renovations: The landlord needs the property vacant for renovation
The landlord must have a valid reason and generally give 2-3 months' notice.
Caution: Check the grounds for termination
The landlord cannot terminate without a valid reason. "I do not like you" is not a valid ground. If you receive an unjustified notice, seek legal help.
Tacita Reconduccion (Automatic Renewal)
If neither party gives notice after the third year, the contract is automatically renewed. This continues for further years until one party gives notice. You can therefore remain in the property even after 3 years without signing a new contract.
Practical Tips and Common Mistakes
Good Practice
- Have the contract reviewed by a lawyer: 100-200 EUR well spent for peace of mind
- Take photos: Photograph every room when moving in and out, and note the date
- Keep receipts: Document rent payments (a bank statement is sufficient)
- Use email: Communicate with the landlord by email so you have a record
- Take out insurance: Basic contents insurance costs 5-10 EUR/month
Common Mistakes
- Paying cash: Always pay by bank transfer, never in cash. You need proof of payment.
- Verbal agreements: Put everything in writing. "The landlord said..." is not sufficient.
- Ignoring running costs: Watch out for hidden running costs - they can add 50-200 EUR per month
- Not understanding the contract language: If you do not speak the language, get a translation and have a lawyer check it