If you plan to rent a property in Spain for more than 11 months, your agreement will likely fall under the Ley de Arrendamientos Urbanos (LAU), Spain’s Urban Rental Law. Knowing the rules helps both tenants and landlords protect their rights.

Duration of contracts

• Standard contracts last 5 years if the landlord is a private individual, or 7 years if the landlord is a company.

• Even if the contract is signed for 1 year, the tenant may extend it up to the full legal term.

• After this, contracts renew annually up to 3 more years, unless either party gives 30 days’ notice.

Rent increases

• Allowed once per year only if written in the contract.

• Linked to the IPC (Consumer Price Index) or other agreed index.

• In 2025, rent increases are capped at 3%.

Deposits and guarantees

• 1 month’s rent is the legal deposit.

• Landlords may request extra guarantees (e.g. 1–2 months more), but it must be in writing.

• Deposits must be lodged with the regional housing authority in the Valencian Community.

• When the tenant leaves, the landlord must return the deposit within 1 month, minus legitimate deductions for damages or unpaid bills. Delays mean interest is owed.

Agency fees

Since the housing law reform, estate agencies cannot charge tenants a commission. The landlord must pay the agency’s fee.

Responsibilities

• Tenants: pay utilities, keep the property in good condition, and handle small day-to-day repairs.

• Landlords: ensure the property is habitable and carry out major repairs.

• An inventory with photos at check-in is strongly recommended to prevent disputes.

What landlords can do to protect themselves

• Request additional guarantees in the contract.

• Take out rental insurance that covers non-payment or damages.

• Ensure the contract is correctly drafted and registered if necessary.

• Work only with a professional agency to check tenant solvency.

What happens if tenants default or leave suddenly

• Landlords can initiate eviction for non-payment, but this can take several months.

• If tenants leave with debts or damages, landlords may:

  • Retain the deposit and guarantees.

  • Claim additional amounts through court.

  • Report debts to official credit or tenant registries.

  • In some cases, pursue wage or bank account garnishment if the debtor remains in Spain.

Example

Maria rents an apartment in Alicante for €800/month.

• She pays €800 deposit + €800 guarantee.

• After 6 months, she moves out without paying utilities or the last month’s rent.

• The landlord keeps her €1,600 as compensation and files a claim for €300 in unpaid bills.

• If Maria had remained in Spain, the landlord could have pursued her through the courts and had her listed in a tenant debt registry.

At Holiday Homes Catral, we prepare contracts that comply with the LAU, screen tenants carefully, and explain all obligations clearly to both sides. We also guide landlords on legal protections and help tenants understand their rights, ensuring fewer risks and disputes.

⚖️ Disclaimer: This article refers to long-term residential rentals in Alicante province under the LAU. Laws may change, and each case is unique. Personalised legal advice is always recommended before signing or letting a property.