Frequently asked questions

Get your questions answered before signing any contract.

homeRental Contract

Minimum duration under the LAU

For standard residential rental contracts signed by individuals, the Urban Leases Law (Law 29/1994, as amended by Law 12/2023) guarantees a minimum duration of five years. If the landlord is a legal entity (company or corporation), the minimum term extends to seven years.

After that minimum period, the contract automatically renews annually for up to three additional years (tacit renewal), unless either party communicates their intent not to renew with the legally required notice.

Notice periods are asymmetric: the tenant must communicate their departure at least 30 days before the end of the term, while the landlord must give at least four months' notice if they don't want to renew at the end of the mandatory period, or two months if the contract is already in tacit renewal.

Deposit: how much can they charge you

The LAU establishes that the mandatory legal deposit is one month's rent for primary residences. This amount must be deposited with the corresponding regional authority. Any clause that attempts to pass this cost to the tenant or that waives the deposit receipt is null and void.

In addition to the legal deposit, the landlord may require additional guarantees (bank guarantee, additional deposit), but these are capped at a maximum of two months' rent for contracts up to five years. Exceeding this limit is a legal violation. The total legal maximum between deposit and additional guarantees is therefore three months' rent.

Rent update: goodbye CPI, hello IRAV

Since May 2023, Law 12/2023 establishes that residential rental contracts must use the Housing Rental Reference Index (IRAV) or similar capped indexes for rent updates, replacing the CPI, depending on the signing year and whether the landlord is a large property owner.

Warning: if your contract is recent and updates rent using the CPI without applying current legal caps (3% in 2024, new index in 2025), or imposes fixed percentages higher than the law allows, it might contain an unfair clause. We recommend obtaining legal review to confirm the regime applicable to your contract.

Frequently asked questions

handshakeArras Contract

The three types of arras: confirmatory, penitential, and penalty

The Civil Code (art. 1454 CC) recognizes three types of arras. Confirmatory arras are the most common in notarial practice: they serve as an advance payment on the price, but they don't allow either party to withdraw freely — breach leads to a damages claim. Penitential arras are those covered by art. 1454 CC with its well-known 'double or nothing' regime: the buyer loses the delivered amount if they withdraw, and the seller must return double if they are the one who breaches.

Penalty arras are a less common variant that combines the advance payment function (confirmatory) with a specific agreed penalty for breach. For arras to be considered penitential, the contract must expressly state so in writing. If it doesn't, current Spanish case law tends to interpret them as confirmatory, meaning neither party can withdraw simply by 'losing' or 'returning double' — they would have to go to court.

That's why it's essential that your contract clearly specifies the type of arras agreed. It's one of the first things our tool analyzes.

The mortgage denial clause: the most important one they usually forget

If the bank denies your mortgage and your arras contract doesn't include a financing condition precedent clause, you'll lose all the money you handed over. This clause establishes that if you don't obtain bank financing under agreed conditions (amount, term, maximum interest rate), the contract becomes void and you recover the arras in full. It's your main financial safeguard.

A properly drafted clause must specify: the maximum mortgage amount requested, the bank's maximum response period (usually 30-45 days), and what constitutes 'denial' (including unacceptable conditions, not just formal rejection). If your contract doesn't have this clause or it's vaguely worded, it's a critical red flag.

Deed signing deadline: how much time you need

The deed signing deadline is the maximum time the parties have to formalize the sale before a notary. If that deadline passes without a deed being signed, it may be considered the buyer's breach, resulting in the loss of the arras. 30-day deadlines are common in standard contracts but are dangerously short.

Getting a bank valuation and formal mortgage approval usually takes between 30 and 60 days under normal conditions, and longer if there are complications. A 60-90 day period is reasonable to give the bank time without pressing the seller. If your contract sets 30 days or less, negotiate to extend it before signing — our tool will automatically flag this as high risk.

Frequently asked questions