How and what to do at the end of a rental contract?

Reasons for termination of the rental agreement

The rental agreement can be terminated for different reasons, both by the landlord and the tenant.

Termination by the landlord:

Breaches by the tenant: non-payment, nuisance activities, etc.
Termination of legal extensions.
Need of the dwelling for own use or for first-degree relatives:
‘The landlord may terminate the rental contract after the first year, provided that two months’ notice is given, if he/she needs the dwelling for his/her own use or that of first-degree relatives (provided that this possibility is reflected in the rental contract).’

Termination by the tenant:

After six months from the entry into force of the contract:
‘The tenant can terminate the contract after six months from its entry into force: this is called withdrawal and, in order to do so, 30 days’ notice must be given.’

Early termination of the contract

The Law on Urban Leases (LAU) establishes compensation for the landlord if the tenant leaves the property early.

‘The Law on Urban Leases (LAU) provides for a compensation of the proportional part of a monthly payment for each year remaining on the contract if the landlord abandons the dwelling early.’ This compensation must be stipulated in the contract.

Termination of the lease of commercial premises

A commercial premises rental contract is terminated when the agreed term has expired, or prematurely for reasons such as:

Non-payment of rent.
Unauthorised assignment or subletting.
Malicious damage or non-consented works.
Non-payment of the deposit or its updating.
Annoying, unhealthy or dangerous activities.

Termination of the contract for the sale of the property

If the owner wants to sell the rented property, he must take into account whether the contract is registered in the Land Registry. If it is, the buyer must respect the contract. If it is not, he can ask the tenant to leave the property with three months’ notice.

‘In all circumstances, the landlord may not require the tenant to vacate the property because of the intention to sell it; it will be up to the new owner, if necessary, to ask him to do so.’

Notice periods for termination of the contract

In order to avoid tacit extension, the following notice periods must be complied with:

Landlord: 4 months’ notice.
Tenant: 2 months’ notice.
Notice of termination of the contract

It is recommended to give notice of termination of the contract by a method that leaves a reliable record, such as a burofax, registered letter with acknowledgement of receipt or telegram. The notice should include:

Details of the landlord and tenant.
Identification of the property.
Date of signing and termination of the contract.
Reason for termination.
Contract termination document

It is recommended to sign a contract termination document, which can be mutually agreed or unilateral, to formalise the handover of the keys and close the rental relationship.

Conclusion

The termination of a rental contract in Spain entails a series of requirements and deadlines that must be met in order to avoid penalties. It is recommended that both parties inform themselves adequately about their rights and obligations, and formalise the termination of the contract in a reliable manner.