Termination of the lease by the tenant
Dear clients and readers,
We are dealing at the moment with several court cases related to tenancy contracts. The purpose of this article is to review the issue of the termination of the lease by the tenant:
1.- First, this matter is regulated by article 11 of the tenancy law (from now own LAU) regarding termination of the lease by the tenant, which states:
“The tenant may withdraw from the lease agreement after at least six months have elapsed, provided that they give the landlord at least thirty days’ notice. The parties may agree in the contract that, in the event of withdrawal, the tenant must compensate the landlord with an amount equivalent to one month’s rent for each year of the contract remaining to be fulfilled. Periods of less than one year will give rise to a proportional part of the compensation.”
2.- In other words, the tenant can withdraw when at least 6 months have elapsed since the start of the contract.
3.- In addition, the tenant must notify the owner 30 days in advance.
4.- As for the payment of compensation, the contract must expressly state this, as Article 11 says “MAY.” This means that it is negotiable and that if the contract does not say anything, the tenant cannot be forced to pay any compensation for early termination.
5.- That said, if compensation is agreed upon, the amount must be as established by law. Therefore, compensation for withdrawal from the lease by the tenant CANNOT exceed one month’s rent for each year remaining on the contract. If less than one year remains, then the proportional part must be calculated.
- Example: A tenant signs a lease for a term of 5 years, which is signed on January 1, 2024. If the tenant withdraws, for example, on July 1, 2024, they must pay the proportional part of the year 2024- and one-month’s rent for each year until January 1, 2029. That is, four months’ rent + the proportional part of 2024.
6.- What happens in cases where the contract specifies a higher amount or a longer period in the event of withdrawal?
- For example; the lease agreement states that the withdrawal period must be at least one year and the compensation will be two monthly payments instead of one.
A.- To resolve this issue, we must read what the law establishes in Articles 4 and 6 of the LAU:
Article 4. Applicable regime.
1. Leases regulated by this Law shall be subject to the provisions of Titles I and IV thereof and to the provisions of the following sections of this article.
2. Subject to the provisions of the previous section, residential leases shall be governed by the agreements, clauses, and conditions determined by the parties. Within the framework of the provisions of Title II of this law and, additionally, by the provisions of the Civil Code.
(…)
Article 6. Nature of the rules.
Any provisions that modify the rules of this Title to the detriment of the tenant or subtenant shall be null and void and shall be deemed not to have been included. Except in cases where the rule itself expressly authorizes it.
Conclusion
A.- Given that Article 11, which regulates the tenant’s withdrawal from the lease, is found in Title II. It appears that the law allows for the negotiation of clauses contained therein. However, any clause that contravenes the provisions of Article 11 and establishes compensation in excess of that provided for by law is null and void, even if the parties have signed it in the contract. The validity of such a clause could be challenged in court in the event of a dispute.
B.- Consequently, it is better not to include penalties. But if the landlord insists, it would be highly advisable at least to establish a brief reference to Article 11 of the LAU. Our opinion in these kinds of cases is always to hire a good solicitor in order to try and negotiate the content of the tenancy agreement with the with the owner.
Bear in mind that 99% of court disputes are the result of contracts badly drafted in the first place by the contracting parties. And in order to save a few hundred euros. The problem is that at the event of litigation, going to court in Spain is very expensive and the chances of winning could be severely jeopardized. If the tenancy agreement has been badly drafted or it might contain abusive clauses.
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We hope you find this information useful. Remember that this is not intended to be specific legal advice, just a general overview. As independent lawyers, we can help you both by assisting you to all tenancy issues. As well as to carry out a comprehensive background legal analysis on your consultation or problem, if required.
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We look forward to helping you and the benefit of our “know-how”.
Kindest regards.
Mr Oscar Ricor
