As part of a promised tightening of national rental laws when it came to power, the PSOE government has updated property letting legislation in response to a big increase in rental prices in Spain recently.
The main change announced is to the minimum contract duration. Regardless of what length of time an owner and a tenant negotiate a contract for, tenants now have the right to remain in a property at least five years, in the case of a private owner, and seven years, where the landlord is a company. Previously it was three years. At the end of the period automatic renewals will also go up from one to three years, unless one side gives a month's notice.
Apart from the one-month-rent bank guarantee, owners can also now only ask for up to two months additional deposit, unless it is a very long-term let. In the case of when a company is renting out, the agents' fees and cost of setting up the contract now have to be met by the landlords.
Faced with an increase in the number of evictions over unpaid rent, the government has introduced extra safeguards to protect more vulnerable tenants.
Property industry representatives reacted by saying that the move would discourage owners from renting out and so push up prices up further.