Buying a property on the Costa Blanca is the dream of many British, Irish, Scandinavian and other European and North American citizens.
Torrevieja offers an idyllic climate, a relaxed lifestyle and excellent investment opportunities. However, when you decide to put your property on the rental market, you enter a legal maze regulated by Spain’s strict Urban Lease Act — the Ley de Arrendamientos Urbanos de España (LAU).
Whether you are renting out a holiday villa or organising the profitability of a small portfolio of, for example, four rental apartments in the city, the rules of the game often favour the more vulnerable party.
A simple contract downloaded from the internet can cost you thousands of euros and years of headaches in court. You need certainty, transparency and an iron barrier between your assets and potential disputes.
Here, we break down exactly where the tenant’s rights end and where the landlord’s rights begin.
The Urban Lease Act (LAU): The Playing Field
In Spain, the law strictly differentiates between long-term rentals — habitual residence — and seasonal or holiday rentals.
For habitual residence rentals, the LAU establishes mandatory rules that cannot be changed in the contract, even if both parties agree.
Rights and Obligations of the Landlord
Right to receive punctual payment: You have the right to collect the agreed rent within the stipulated deadlines, normally within the first seven days of the month.
Right to recover the property: Under very specific circumstances — such as needing it for yourself or first-degree relatives — you can reclaim the property after the first year, provided this clause has been included in the contract.
Obligation to maintain habitability: You must carry out all necessary repairs to keep the property in habitable condition, without the right to increase the rent for doing so, such as repairing broken pipes or a faulty water heater.
Obligation to deposit the security deposit: It is compulsory to deposit the legal security deposit with the relevant regional body — in our case, the Generalitat Valenciana.
Rights and Obligations of the Tenant
Right to mandatory extension: In long-term contracts, the tenant has the right to remain in the property for a minimum of 5 years, or 7 years if the landlord is a legal entity.
Right of first refusal: If you decide to sell the property, the tenant has the right of first refusal and withdrawal, meaning preference to purchase it for the same price.
Obligation to pay utilities and minor repairs: The tenant must pay for water, electricity, internet and minor repairs arising from daily wear and tear, such as replacing a light bulb or repairing the toilet flush.
Obligation to return the property in its original condition: At the end of the contract, the property must be returned as it was received, except for normal wear and tear over time.
Quick Comparison: Who Pays What?
| Item | Landlord | Tenant |
|---|---|---|
| IBI and community fees | Yes, unless expressly agreed otherwise | No |
| Rubbish collection tax | Depends on the prior agreement | Generally yes |
| Major breakdowns — boiler, roof | Yes | No |
| Daily maintenance | No | Yes |
| Legal security deposit | Obliged to deposit it | Obliged to pay it — minimum 1 month |
The Risk of Acting without a Law Firm in Torrevieja
The biggest trap foreign investors fall into is assuming that the Spanish legal system works in the same way as in the United Kingdom, Sweden or the United States. We are not simply administrators who fill in forms; as registered lawyers, we protect your assets.
Not having a lawyer in Torrevieja draft a tailor-made contract means exposing yourself to serious risks. A common mistake is failing to register the property properly with the Land Registry, or ignoring local regulations on tourist licences if you decide to rent short term.
Furthermore, if the tenant is foreign, they will often need to obtain an NIE in Torrevieja and open a Spanish bank account in order to set up direct debit payments. In many cases, expatriates rent luxury properties while processing their residence permit in Spain, such as the Golden Visa. If the contract is not drafted in both languages — English and Spanish — with complete clarity, disputes caused by cultural and linguistic misunderstandings are guaranteed.
Choosing a law firm in Torrevieja with proven experience ensures that your contracts are protected against non-payment, abusive clauses and prolonged occupations.
Frequently Asked Questions for Foreign Investors
1. What happens if the tenant stops paying the rent?
You must start judicial eviction proceedings. You must never cut off utilities or change the locks, as this is considered an offence of coercion under the Spanish Criminal Code.
2. How much can I request as a security deposit and additional guarantee?
The LAU requires one month’s security deposit for habitual residence rentals, and two months for uses other than housing. Additionally, you may request an “additional guarantee” of up to a maximum of two extra monthly payments.
3. Can I update the rental price every year?
Yes, but there are currently limits set by the Government on the maximum annual increase percentage, which is disconnected from the general CPI in certain circumstances. It must be stipulated in the contract.
4. Can I sell my property in Torrevieja if there is a tenant inside?
Yes, you can sell it, but the buyer must respect the rental contract in force until the legally established period ends, except in specific cases.
5. Does the tenant need a Spanish NIE to sign the contract?
Yes, it is essential. To sign a legal contract and register or change the ownership of electricity and water utilities, the tenant will need their Foreigner Identity Number.
Protect Your Investment Today
Managing properties from miles away in a foreign country does not have to be a source of stress. We have been offering legal security to the international community on the Costa Blanca for two decades.
Do not leave the profitability and security of your home in Spain in the hands of generic contracts or language barriers.
Are you ready to rent out your property with complete peace of mind, or do you need to review an existing contract?
Contact ANTÓN & ASOCIADOS ABOGADOS – Law Firm in Torrevieja today to schedule a confidential initial consultation in your native language. We have experts in all European languages and always defend your interests against third parties.
BY ENRIQUE ANTÓN – ANTÓN & ASSOCIATES LAWYERS
