In the Spanish real estate market, one of the most frequent doubts for both landlords and tenants is to identify which type of rental contract is more appropriate: the seasonal rental contract or the habitual residence (long-term) rental contract. Although both are regulated by the Ley de Arrendamientos Urbanos (LAU), their purpose, duration, obligations and legal consequences differ significantly. Understanding these differences is essential to avoid legal conflicts and to ensure that the contract is in line with the actual use of the property.
1. What is a tenancy agreement for a permanent dwelling?
A long-term lease, also known as a tenancy agreement, is a lease whose primary purpose is to provide the tenant with a permanent residence. It is the most common type of lease in residential rental and is designed to protect the stability of the tenant. According to the LAU, this contract applies when the property is used as a habitual residence, regardless of the name given to it by the parties.
2. What is a seasonal rental contract?
The seasonal lease is intended to cover a temporary and specific need of the tenant, whether for work, education, health or holiday purposes. The key is that the property is not going to be used as a habitual residence. The duration is freely agreed by the parties, but there must always be a reason that justifies the temporary nature of the lease.
3. Key difference: the purpose of the contract
The essential distinction between the two contracts lies in the purpose of the lease. It is not the title of the contract that matters, but the actual use of the property. If the property serves as the tenant's habitual residence, the contract will be subject to the housing regime of the LAU, even if the parties have called it 'seasonal'. This can have important legal consequences, especially with regard to the mandatory minimum duration.
4. Duration: freedom versus legal limits
In habitual residence contracts, the LAU imposes a mandatory minimum duration of five years if the lessor is a natural person or seven years if the lessor is a legal entity. In addition, the contract is automatically extended at the end of the term if the tenant so wishes. In the case of seasonal leases, the parties are free to agree on the duration, without mandatory extensions. At the end of the term, the contract terminates automatically.
5. Actual use of the dwelling: reality prevails over the contract
In seasonal contracts, the actual use must be consistent with the temporary purpose. This includes preventing the tenant from registering in the dwelling, using the property for permanent use or lacking clear justification for the temporary purpose. If a use incompatible with the temporary use is detected, the contract could be reclassified as a tenancy for permanent residence.
6. Rent, prices and updates
In regular housing contracts, the rent is freely fixed, but its annual update is only valid if agreed in writing, usually according to the CPI or other official index. In seasonal contracts, there is greater price flexibility, especially in areas of high tourist demand or in cities with labour and student mobility.
7. Expenses and supplies: how they are managed in each contract
In regular housing contracts, utilities are usually paid by the tenant, unless otherwise agreed. On the other hand, in seasonal contracts, it is common for utilities to be included in the rent or a fixed rate is established, in order to facilitate management and avoid oversights in short-term stays.
8. Deposit and additional guarantees
The LAU establishes that in habitual residence contracts the legal deposit is one month's rent, and also limits additional guarantees to a maximum of two months' rent when the lessor is an individual. On the other hand, in seasonal contracts, the minimum legal deposit is two monthly payments and there is no limit for additional guarantees, allowing greater flexibility for landlords to cover risks.
9. Recovery of the property by the owner
In regular housing contracts, the owner can repossess the property before the end of the contract only if certain legal conditions are met, such as the need to use the property for their own or their immediate family's home. In the case of a seasonal contract, there are no such limitations: at the end of the agreed term, the property must be handed over without further justification.
10. Risks of misuse of a seasonal contract
Using a seasonal contract as a disguise for a regular rental property can lead to serious legal problems. If the tenant proves that he/she uses the property as his/her main residence, he/she could demand the mandatory extensions of the LAU and stay for up to five or seven years, depending on the type of landlord. It is therefore essential that the contract is consistent with the purpose and actual use of the property.
11. How to draft each type of contract correctly
A regular housing contract must include all the clauses stipulated in the LAU, including those relating to duration, updating of rent and extensions. On the other hand, a seasonal contract should clearly detail the temporary reason and provide, whenever possible, supporting documentation. Precise drafting helps to avoid conflicts and ensures that each party understands its obligations.
Conclusion
Making the right choice between a seasonal and a permanent rental contract is essential to avoid legal problems and to ensure legal certainty. The purpose of use of the property is the determining factor. For landlords and tenants, knowing these differences not only avoids conflicts, but also ensures that the contract accurately reflects the reality of the rental. Professional advice can be key to drawing up a contract adapted to the real needs of each case.
Contact our team at PALMER LEGAL to clarify any doubts you may have on this subject.
