In addition to rights in rem (such as the mortgage), the lease agreement can also be entered in the Spanish land register as a relationship under the law of obligations. This gives it publicity and allows the tenant to protect himself in the event that the rented property is sold.
Why is registration useful?
Spanish rental law (LAU - ley de arrendamientos urbanos) differentiates between residential rental and commercial rental. These two forms of rental must also be distinguished with regard to the question of registration of the rental agreement in the land register.
a) Residential rent
In the case of a residential tenancy, the lease agreement existing between the tenant and the seller generally also continues to exist with the purchaser after the sale of the rented property. The purchaser assumes the rights and obligations under the lease, although certain restrictions must be observed.
It follows from Art. 14 I LAU that the acquirer is bound by the lease only for the first five years or for the first seven years if the acquirer is a legal entity. This applies even if the acquirer has assured himself by looking at the land register that there is no encumbrance by a lease agreement.
In the case of longer contract terms, the acquirer is subrogated under Art. 14 II LAU for the entire agreed term if he does not meet the requirements of Article 34 of the Mortgage Law (LH - ley hipotecaria). Art. 14 LH provides for the protection of good faith. The binding effect on an existing residential tenancy depends on whether the purchaser could see the tenancy agreement in the land register. If the tenancy between the vendor and the tenant has been entered in the land register, it continues to exist with the purchaser even if the term of the contract is longer (than five or seven years). The registration of a Spanish tenancy in the land register is therefore of decisive importance at this point.
b) Commercial space rent
In the case of a tenancy for commercial space, the purchaser also generally enters into the tenancy existing at the time of the sale, whereby an entry in the land register may also become relevant here.
The acquirer is not bound by the existing commercial lease if he had no knowledge of it and the agreement was not entered in the land register. A commercial tenant is therefore only comprehensively protected against termination of his commercial lease by the acquirer if the latter has been entered in the land register.
How does the registration take place?
For the registration of a Spanish lease in the land register, the participation of a notary is required, since only public deeds can be registered in the property register.
There are two options available for this: Either the rental agreement is concluded directly before a Spanish notary in a public deed or an already concluded rental agreement under private law is subsequently publicly notarized.
The article was provided by Porta & Associates in Palma de Mallorca.
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