1.1 Typical lease length?
The length of the lease is freely determined by the parties.
Notwithstanding the above, typical length for a residential lease could be between one and five years, and for a non-residential lease between ten and fifteen years, without prejudice to the right of any or both parties, as the case may be, to early terminate the lease agreement.
1.2 Maximum/minimum lease length if any?
There is not either a maximum or a minimum lease length for non-residential lease agreements. Regarding residential leases, Act 29/1994, dated 24th November 1994, of Urban Lease Agreements (the “Urban Lease Act”) establishes, in general terms, a minimum length of three years (according to the tenant’s choice); nothing is stated in connection with a maximum lease length.
1.3 Statutory controls and obligations re renewal/termination of leases (does tenant have automatic right to renewal or can they apply to the courts for a new lease); also does some form of notice have to be served to terminate a lease to avoid renewal?
For non-residential leases, there are no statutory controls, and the existence of obligations re renewal/termination of leases will depend on the agreements between the landlord and the tenant.
In residential leases, the tenant is authorised by law to terminate the lease agreement at any moment once the first six months of the lease length have elapsed, as long as its intention of terminating the lease agreement is notified to the landlord with, at least, 30 days in advance to the expected date of termination.
On the other hand, the landlord is authorised by law to terminate the lease agreement at any moment once the first year of the lease length has elapsed, as long as its intention of terminating the lease agreement is notified to the landlord with, at least, two months in advance to the expected date of termination and provided that the landlord or his family needs the dwelling as permanent housing.
1.4 Any overriding statutes concerning the ability of the tenant to break a fixed term lease (whether or not included as a term of the lease)?
In case of non-residential leases, the parties to the agreement may freely regulate the terms of the agreement and the consequences of its non-fulfilment by the tenant (the most common would be the application of a penalty, for example, equal to the sum of all the monthly instalments until the end of the compulsory length for the tenant, without prejudice of the possibility of a later moderation by the judge, as the case may be).
For residential leases, the Urban Lease Act provides that, in case of early termination by the tenant – once the first six months of the lease lenght have elapsed – a compensation for the landlord consisting of one month’s rent per each pending year of the length agreed by the parties at the execution of the lease agreement.
In the case of both non-residential and residential leases, if the landlord does not comply with its obligations concerning the term agreed for the lease agreement, the tenant will be entitled to demand its duly fulfilment.
1.5 Any other security of tenure provisions available to a tenant that would frustrate possession or prevent receipt of market rents?
For example, in respect of residential leases, should the landlord decide to carry out any improvements in the leased dwelling, a prior notification to the tenant with, at least, three months in advance must be done. Then, within a period of one month from said notification, the tenant will be entitled to early terminate the lease agreement except where the works do not affect or hardly affect the dwelling. If that is not the case, the tenant may demand a reduction in rent.
On the other hand, in case of loss of the landlord’s right on the dwelling or even in case of transfer of its ownership, the lease agreement will be terminated unless it has been previously entered into the Real Estate Registry.
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