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When can the rental contract be cancelled?

Real estate and sales law
When can the rental contract be cancelled?

In every contractual legal relationship, the possibility of terminating the relationship, technically known as termination, is established. In the case of rental contracts, the Ley de Arrendamientos Urbanos (LAU) establishes the following possibilities depending on the contractual party you represent: tenant (lessee) or landlord (lessor).

How to cancel a rental contract by the tenant?

Article 11 of the LAU states that the minimum period to cancel a rental contract is 6 months. Before 6 months from the signing of the contract, the tenant cannot leave and, in the event of termination of the contract, the tenant must pay the first 6 months in full.

Once these first compulsory 6 months have passed, "when the contract expires, it will be compulsorily extended by annual instalments until the lease reaches a minimum duration of five years, unless the tenant declares to the landlord, at least thirty days before the date of termination of the contract or any of the extensions, that he does not wish to renew it".

In other words, until 5 years have passed, and as long as the tenant does not state otherwise, the contract is automatically renewed. Otherwise, it is sufficient to give one month's notice. We advise you to send a burofax to avoid unpleasant surprises.

How can a rental contract be terminated by the landlord?

Breaches apart (non-payments, damages, activities not allowed in the contract, subletting, etc., included in article 27 of the LAU), the landlord can only recover the flat before the 5 years established by law if the possibility of recovering the flat was described in the contract.

In order to be able to enforce this clause, the following requirements must be met:

A. That this clause is expressly included in the contract.

B. That at least 1 year has passed since the signing of the contract.

C. That the property is needed for permanent use by the owner, relatives of the first degree of consanguinity or adoption or spouse in cases of separation, divorce or annulment. It is not possible to repossess it in order to sell it. 

Is there a penalty for cancelling a rental contract early?

Article 11 of the LAU specifies that the parties may agree that, in the event of termination, the tenant must pay the landlord an amount equivalent to one month's rent for each year of the contract that has not yet been fulfilled. The penalty must be reflected in the rental contract and, as most contracts are renewable from year to year, we are talking about a maximum of 1 month's rent.

If your landlord prevents you from terminating your rental contract, do not hesitate to contact us.

Real estate and sales law

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