Long term Rental Laws / Tenants and Owners rights in Tenerife

Long term rental laws in Tenerife

It seems every week at the moment, tenants are crying out on Facebook groups for a new apartment rental after being told by their landlords or rental agents that they have one month to vacate. A few reasons behind this may be that the price of long-term rentals has increased by quite some margin in the past few years and property owners want to start renting afresh at the higher rates. Or that owners are looking to sell their properties as prices have also risen over the past few year. Of note, there is nothing to actually stop them selling the property with a sitting tenant, if that is what a buyer is looking for. But more often than not, they want the tenant out before doing the sale is signed at notary.

Whatever the reasons, many tenants in Tenerife face the prospect of having to find a new rental property, in a highly competitive market with little supply. This can be traumatic for those who cannot quickly find a new home to rent and who may have children in nearby schools or who have pets (its really difficult now to find rentals that accept pets) and maybe cannot afford to pay the prices now being asked for new long lets.

So, what is your position if you are a tenant and your landlord or agent gives the great news that they want you out, pronto?!

Well, firstly, DO NOT PANIC! It can be a shock and it can be very worrying but try to stay calm. It’s not all doom and gloom and rental laws here very much favour tenants rights. I´ll go through the basics of these laws now.

The most important thing to consider when a property is long let to a tenant is that it is not the timeframe of the contract which is the crucial factor, but the purpose of the rental – this is incredibly important and defines the tenant’s rights.

Essentially, if you are renting a property as your permanent place of abode – your main home, this is where you are living or are going to permanently live, then it matters not what is written in the contract so far as the timeframe. 

To cut it short, you can reside in the property for 5 years.

Even if the contract says “11 months” or “1 year” or has a clause saying “the owner has the right give the tenant 28 days notice to leave” – none of it matters. Furthermore if the owner of the property – the landlord, happens to be a company such as a bank or a private limited company – an SL, SLU for example then this increases to 7 years.

Once you occupy a property that is your main and permanent residence, the term will be 5 years if that is how long you wish to stay.

Agents may tell you differently, as might the owner, as might “Terry the barfly” down the road who´s been living in Tenerife for 10 years and knows everything, but the law is very clear on this.
To go into a little more detail, the initial long-term rental is for 12 months. Then, within 30 days of the end of the first 12-month term, the tenants should inform the owner that they will be renewing for another 12 months. Same again at the 2-year point.

What seems to come as a surprise to landlords is that they have no say whatsoever in this matter.

If the tenant opts to renew each year up to 5 years, it is absolutely their choice.

At the end of the 5-year term, if the landlord does not give 30 days notice to vacate, then the rental period continues for another year.

There is an exception where if the landlord or first-degree relative has just legally separated or divorced and they have the legal paperwork proving so much then they can give the tenant two months notice to vacate. But, a landlord found to be misleading a tenant over this could find themselves in deep water, paying compensation and returning the property to the tenant if the tenant opts to take them to court.

So, if you are a tenant and have been asked to leave your main place of residence, you are under no obligation whatsoever to do so, if you have been renting it for less than five years.

If you are a landlord thinking about renting out your property for a year on a long-term basis, be aware, that you cannot do so. Maybe you will find a tenant who is happy to rent for one year and maybe they will sign a contract to that effect. But should they, towards the end of that 12-month term, exercise their right to renew for another year, there is absolutely nothing you can do about it and won´t matter one jot, what clauses were written into the contract. A long-term rental contract in Tenerife cannot overrule Spanish law! Do not listen to anyone who tells you otherwise. It may be that rental agents who are writing these contracts are simply not aware of the how the Urban rental laws apply or, if you want to be more cynical, they think if they told all landlords about the 5 year rule, perhaps they wouldn’t have quite so many landlords willing to long let their properties!

Here are some real-world examples:

Question: We have been renting a property long term in Tenerife now for 8 months. We have just been informed by our rental agent that the owner is selling the property and we have been given 1 month to move out and the agent has told us they will be doing viewings with prospective purchasers from next week. The long-term rental contract we signed was for 11 months but we cannot find anywhere to rent and do not know our rights.

In this scenario, because the rental property is your permanent abode, the 11-month term in the contract is null and void. The agent and owner have no powers to evict you if you do not want to leave. All you must do, 30 days before the end of the first 12 month period of rental, is inform your agent and landlord in writing that you will be exercising your rights under the LAU law to continue renting the property for 12 months more. This can be repeated towards the end of the second year. It does not matter if the owner wishes to sell. Unless he can find a buyer who is happy to purchase the property with a tenant, he cannot sell the property. As tenants, you also have the first refusal on any offer that is accepted on the property. The agent cannot conduct viewings of the property or access the property under any circumstances without your explicit permission

Question: We have been long-term renting a property now for 5 years and one month and have just been given one month to vacate the property. What are our rights?

The owner must give 30 days notice, 30 days before the end of your tenancy agreement if he wishes you to leave at the 3-year point. If he has not done so and you have not given him notice that you will be vacating, then the contract automatically renews for another year so you can stay in the property for another 11 months.

Question: I am the owner of a nicely furnished property in Tenerife which is currently not being used. I am not expecting to visit the island or use the property for a year or so and wish to rent it long-term to generate some income. I have spoken to a rental agent who can rent the property on a one-year basis and will take a 3-month deposit to cover any damages to the expensive furniture. They will a clause whereby the tenants will vacate the property with two months notice once I want to use the property again or decide to sell.

In this scenario, as an owner, unless you are willing to commit to a long-term rental period of 5 years, then do not long-term rent the property. The tenant may sign a 12 month contract but according to law, they can extend this each year for a total of three years and you will have no say in the matter, even if you wish to terminate the lease to use the property yourself or sell the property. Additionally, the maximum deposit is 1 month, not 3 months. A clause in the contract whereby the tenant must vacate with two months notice is null and void.

If in doubt, as a tenant or as a landlord, you can seek legal advice from any number of lawyers, here in Tenerife and ask them about your rights when it comes to long terms rentals and how the Ley de Arrendamientos Urbanos (LAU) laws apply to your specific situation.

I can recommend the following law firm for advice on these matters:

JOSE ESCOBEDO Abogado / Lawyer
Tel: (34) 922714322
CC San Eugenio, Local 81, Costa Adeje