What happens now with the 5 year leases that have ended?

Real estate news rental contracts 5 years

The rental contracts that were formalized during the crisis come out of hibernation in a very different market.

Five years ago, Law 4/2013 came into force, approving the new measures to make the rental market more flexible. The law modified several precepts of the LAU, including the mandatory duration of contracts, going from five years to three and reducing the extension from three to one.

Currently, many tenants and owners who formalized lease contracts before June 2013 are asked in what situation are these contracts.

According to experts, these are some things you need to know:

It is not mandatory for the owner finalize the rental contract once these five years have passed.

Contracts signed before the current Law 4/2013 that end this 2018 will be renewed automatically if the tenant is not notified of the cancellation with a previous month at expiration (according to article 10 of the LAU). Contracts prior to 2013 will continue to be governed by their own law, if only the rent is updated, they can still be subject to tacit renewal.

For contracts signed after 2013, there are two options:

-If only the rent is renewed, it is understood that one year of extension applies and the rent can be modified the following year.

-If a new contract is signed, the rent is fixed for three years.

The owner can adjust the rent to the current market.

If the owner notifies the cancellation of the contract One month before expiration, you can rescind it and make a new contract with the new conditions, which may be a rent increase. It is essential that the notification is an official communication (letter, burofax ...).

The type of increase that the landlord can make is free, the rental market is governed by supply and demand and can establish the price that you consider convenient. However, it is advisable to assess whether it is worth raising the price (or how much to raise it) to a tenant who provides stability against having to find a new one with all that that entails.

The tenant can refuse to a price increase.

If the owner does not make the notification, the tenant can refuse to increase the rent and has the right to stay in the house for three more years. However, if the landlord has correctly notified the decision, the tenant can do little (refusing to pick up the notifications, as the shipment is registered) and it is convenient to look for other rental options if you do not agree with them. the rise in the price.

Owner and tenant can reach an agreement that benefits both.

In any case, do not go to extremes. When the end date of the contract approaches, landlord and tenant can reach a renewal agreement that benefits both.

In addition, they can agree long term rentals, update the lease to the current conditions or be informed about the null clauses today.

If you have any doubt, it is very advisable to consult these aspects with professionals, whether they are lawyers or real estate experts.