Legal status of the tenant when the property changes ownership
In Spain, selling a property does not automatically end an existing lease agreement. The Law on Urban Leases (“Ley de Arrendamientos Urbanos”, LAU) continues to protect the tenant’s interests even after ownership changes. According to Article 14 of the LAU, the new owner is required to honor all previously agreed-upon terms with the tenant for the first five years of the contract if the seller is an individual, or seven years if the seller is a legal entity. This rule applies regardless of whether the buyer was informed about the lease.
Registration details and rights of the parties
If the lease agreement is registered in the Land Registry (Registro de la Propiedad), or if the buyer was previously notified about the tenant, the new owner must fully respect the agreed rental term. If the contract is not registered and the buyer was unaware of it and purchased the property in good faith, they may terminate the lease after the minimum period (five or seven years). In this case, the seller must compensate the tenant for early termination.
Payment terms and utilities
The new owner cannot unilaterally change the rent amount. Any revision is only possible under the conditions outlined in the contract. Utility services registered in the previous owner’s name should be transferred, but their provision cannot be suspended due to the change in ownership.
Early termination and notifications
The parties may agree in advance to terminate the lease in the event of a sale, but such a condition only takes effect after the minimum term established by the LAU has expired. Before this period, any attempts to terminate the contract due to sale are considered invalid. The tenant must be notified of the change of ownership in writing, preferably with confirmation of receipt of the notice.
Possibility of reclaiming the property due to necessity
If the landlord is an individual and the contract allows for early reclaiming of the property for personal need, they may exercise this right. This requires prior notice to the tenant and confirmation that the apartment will be used as a primary residence. If the new owner does not move in within three months after the property is vacated, the tenant has the right to either return or receive compensation.
Right of first refusal and features of older contracts
The tenant has a preemptive right to purchase the apartment (the so-called “tanteo y retracto”) unless they have expressly waived it in writing. After receiving notice of the sale, the tenant has 30 days to make a decision. If several apartments are sold simultaneously, this right does not apply automatically.
Contracts signed before March 2019 are governed by the version of the law in force at the time of signing. If a lease is not registered, the new owner may terminate the agreement by notifying the tenant three months in advance. In this case, the tenant may claim compensation for damages.
Balance of interests between the parties
Article 14 of the LAU aims to maintain a balance between the owner’s right to dispose of their property and the tenant’s residential stability. This provides legal certainty in transactions involving leased real estate.
