On 24 November 2009, Law 19/2009, dated 23 November, on measures designed to develop and speed up the rental process and the energy efficiency of buildings (the “Law”), was published in the Spanish Official State Bulletin (BOE). This Law, which was soon to become known as the “Express Eviction” Law, introduced significant changes in regulations which directly affected the property sector: the Law on Urban Leases, the Horizontal Property Law and the Civil Procedure Law.
As the statement of motives of the Law states, its objective is to reinforce legal safeguards for all parties in rental contracts in the interest of promoting property Leases over the market trend of recent years (the general preference has been to purchase property).
In particular, Article 1 modifies Article 9 of Law 29/1994, dated 24 November, on Urban Leases (the “LUL”) regarding situations where the obligatory extension of the contract over a period of 5 years is not applicable.
Up until now the obligatory extension of the contract was not applicable when, at the time of signing, it was expressly stated in the contract that the lessor needed to use the property as his permanent residence. With the new Law, this case of the obligatory extension not being applicable is broadened to include situations where the lessor needs the property for his immediate family (parents and children) or for his spouse in divorce or marriage annulment situations. The Law expressly states that all these cases should be expressly written into the contract to avoid cases of fraud and in favour of legal safeguards.
We must, however, highlight the right of the tenant to: (i) re-occupy the residence for a new period of five years if the lessor or the relatives of the lessor have not moved in to occupy the residence within three months of the tenant leaving or, alternatively, (ii) to claim compensation equal to the sum of the rent which corresponds to the period of time left before the five years are up.
Regarding Law 1/2000, dated 7 January, on civil procedure, 20 of its precepts are modified to help speed up the processes eviction and claiming overdue rent. These are areas where legal processes are sometimes very drawn out and burdensome for all parties involved.
The new Law plans that all claims regarding overdue rental payments (which until now were decided in ordinary civil proceedings) will be given a verbal hearing that is quicker and simpler than the previous type.
A series of measures are also adopted for summonses and notification which will be settled via the small claims court once the Law has come into effect.
Other changes of note designed to speed up proceedings mean a sentence requiring eviction will be enough for the eviction order to be executed directly without the need for a new process to be started or any follow-up proceedings to be carried out.
Furthermore, the period of time between the moment the lessor gives notice of the summons to pay the overdue rent and the lawsuit being presented is reduced from two months to one month. The tenant may avoid the process being started if they pay the overdue monthly payments within this time.
Regarding Law 49/1960, dated 21 July, on Horizontal Property, Article 3 is amended to make it easier for homeowners associations to agree to carry out improvements and install equipment or systems which will improve the energy efficiency of the building, thereby reducing energy costs in residences and helping to fight global warming. This objective also applies to regulations regarding the installation of charging points for electric vehicles in car parks for residential blocks.
The reforms introduced allow for flexibility in the majority votes needed in homeowners meetings for the association to carry out improvements in energy efficiency in their buildings, thereby avoiding a situation where the decision of one person affects the collective will.
Finally, in December 2009 the Government announced that the temporary measures for the State Plan for Property and Restoration 2009-2012 (SPPR) will be extended for a further year. The main objectives of this SPPR will be to make the most of the excess of empty properties and make it easier for citizens with fewer means to purchase a property. The temporary regulations of this plan include the possibility of families with an annual income of up to 7 times the IPREM index (establishing a basic level of income), in other words 48,900 euros, can buy an agreed-on property.
In addition, any empty property with a works licence from before the 1 September 2009 can be classed as a Government-subsidised Property for purchase or rental, as long as the terms and conditions established in the SPPR are met. The temporary regulation by which finished but empty properties can be classed as used (for government-subsidised purchase) without the requirement of waiting a year, is also extended for a further year until the 31 December 2010. The 20% increase in subsidy amounts for government-subsidised rental properties with an agreed loan and in priority urban areas is also maintained until the 28 February, 2010,