Investing in housing continues to be the safest and preferred value of the Spanish due to its great long-term profitability.
One of the great doubts of private investors in real estate is what type of economic return to obtain from the investment and the doubt is usually raised about whether to rent or wait to sell the asset, which raises doubts about whether, once the apartment is rented, it can be put up for sale.
“There is no regulatory limitation that prohibits the owner of a home from selling it, even if it is rented,” explains Montserrat Junyent, head of legal advice for the General Council of COAPIs of Spain, who explains that this non-prohibition does not mean that this sale can be made in all cases.
Junyent warns that, “unless the explicit resignation is foreseen in the contract”, according to the Urban Leasing Law (LAU), the lessee will have the right of preferential acquisition, so he would have the option of matching the offer and buying the property.
Otherwise, “if the tenant had waived this right, the landlord should only notify the tenant of his intention to sell the home with a minimum notice of thirty days from the date of sale,” says the expert.
These rights, by virtue of article 14 of the LAU, will be maintained “during the first five years of validity of the contract, or seven if the seller or the lessor were a legal person.” This means that, therefore, the acquirer will not be able to terminate the lease until the aforementioned period has elapsed.
On the other hand, Junyent points out that there are some contracts that are governed by the 1964 Law, and in these cases “the tenant always has the right of first refusal”, so that when facing a sale “the tenant, in If you do not choose to purchase the home, you may file a judicial challenge to it, if the price exceeds the capitalization price of the rent ”. The expert adds that this provision “is a measure of protection for the tenant”, since, although the sale will not be affected “if the options of the acquirer to dispose of the house by necessity do”.
Junyent explains that, despite this general right of five years for individuals and seven for legal entities, a longer contract duration can be agreed, in which case, depending on whether the purchaser of the property meets the requirements set forth in the Article 34 of the Mortgage Law, a regulatory provision that protects the buyer in good faith.
Article 35 of the Mortgage Law
If they are fulfilled, the buyer “must bear the lease until it reaches a minimum duration of 5 or 7 years” and once this term has expired, the lease can be “terminated by indemnifying the tenant with one month’s rent in force for each year that remains to be fulfilled ”, says the expert.
In the case of not fulfilling them, the purchaser of the home must bear the full time of the contract, even if it is longer than five and seven years.
What to do to avoid problems?
Junyent points out that, in order to have everything tied, “it is advisable” to collect the transfer of the property along with an annex to the lease contract and “communicate said circumstance to the competent body for deposit of bonds” to guarantee that the obligations of this are fulfilled. contract.
In addition, Junyent warns that in areas where Catalonia, where there is currently a law limiting rent prices, there are “limits on the determination of rent”, which must be taken into account when buying a property.