Spain Rental Act 2013

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Spanish Urban Renting Act 2013 SUMMARY - TITLE I. Scope of the Law [Art. 1 to 5] -

Article Article Article Article Article

1.

2.

3.

4.

5.

Scope of Application Renting of Housing Renting for use other than housing Applicable Regime Excluded renting

- TITLE II. Renting of Housing [arts. 6 to 28] - CHAPTER I. General rules [arts. 6 to 8] - Article 6. Nature of the rules - Article 7. Condition and effects in front of third parties of the renting of housing - Article 8. Transfer of the contract and subtenancy - CHAPTER II. Duration of the contract [Art. 9 to 16] - Article 9. Minimum time - Article 10. Extension of contract - Article 11. Withdrawal of the contract - Article 12. Withdrawal and expiry in case of marriage or living together of the tenant - Article 13. Termination of the landlord´s right - Article 14. Alienation of the rented housing - Article 15. Separation, divorce or annulment of the tenant’s marriage - Article 16. Death of tenant - CHAPTER III. About the rent [arts. 17 to 20] -

Article Article Article Article

17.

18.

19.

20.

Determination of the rent Updating of the rent Increase of the rent because of improvements General and individual services expenses

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- CHAPTER IV. About rights and obligations of the parties [arts. 21 to 25] -

Article Article Article Article Article

21.

22.

23.

24.

25.

Housing Conservation Improvement Works Works of the Tenant Tenants with Disabilities Right of preferential purchase option

- CHAPTER V. About suspension, resolution and termination of the contract [arts. 26 to 28] - Article 26. Habitability of the housing - Article 27. Breach of obligations - Article 28. Termination of the renting -TITLE III. About renting for use other than housing [arts. 29 to 35] -

Article Article Article Article Article Article Article

29.

30.

31.

32.

33.

34.

35.

Alienation of the rented property Conservation, improvement and works of the tenant Right of preferential purchase . Transfer of contract and subtenancy Death of tenant Compensation to the tenant Automatic resolution

- TITLE IV. Common orders [Arts. 36 to 37] - Article 36. Guarantee Deposit - Article 37. Entering of the renting

- TITLE V. Renting processes [arts. 38 to 40] - Article 38. Jurisdiction - Article 39. Procedure - Article 40. Accumulation of actions

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- ADDITIONAL PROVISIONS - First. Regime of public housing rent - Second. Modification of the Mortgage Law - Third. Deposit of guarantee deposits - Fourth. Helps for access to housing -

Fifth. Modification of the Civil Procedure Act - Sixth. Census of urban renting - Seventh. . Modification Act 36/1988, of December 5, on Arbitration - Eighth. Right of return - Ninth. Declaration of the disability status - Tenth. Prescription - TRANSITIONAL PROVISIONS - First. . Contracts signed after May 9, 1985 - Second. Housing renting contracts signed before May 9, 1985

- Third. Business premises renting contracts, executed before May 9, 1985 - Fourth. Assimilated renting contracts executed before May 9, 1985 -

Fifth. Public housings renting - Sixth. Court Proceedings

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- DEROGATING PROVISION. - Single. Derogating provisions

- FINAL PROVISIONS - First. Nature of the Law - Second. Entry into force - Third. Publication by the Government of the Consumer Price Indices referred to in this Act - Fourth. Via fiscal compensations

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TITLE I. Scope of the Law Article 1. Scope of Application This Act establishes the legal regime applicable to renting of urban properties intended for housing or uses other than housing Article 2. Renting of Housing 1. It is considered renting of housing the one that falls on an habitable building which main purpose is to satisfy the permanent need of housing of the tenant 2. The rules governing the renting of housing will be also applied to furniture, storage, garages and any other rooms, rented spaces or services transferred as accessories of the property by the landlord.

Article 3. Renting for use other than housing 1. It is considered renting for use other than housing the one that falling on a building, has as main destination other than the established one in the previous article.

2. Specially, it will have this consideration the renting of urban buildings held for a season, summer or any other one , and those held to carry out an industrial, commercial, craft, professional, recreational, assistance , cultural or teaching activity in the property whoever are the people carrying them out Article 4. Applicable Regime 1. The renting regulated in this Act will be subject in an imperative way to the provisions of Titles I and IV of this Act and to those ones written in the following sections of this article.

2. Respecting the provisions of the preceding paragraph, the renting of housing will be governed by the agreements, clauses and conditions decided by the will of the parties, under the provisions of title II of this Act and, complementarily , by the provisions of the Civil Code.

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3. Without prejudice to paragraph 1, renting for use other than housing are governed by the will of the parties, failing that, by the provisions of Title III of this Act and, complementarily , by the provisions of the Civil Code.

4. The exclusion of the application of the precepts of this law, whenever possible, must be done expressly with respect to each one of them.

5. The parties will be able to agree the submission to mediation or arbitration of those disputes which because of their nature can be solved by these forms of conflicts solution, in accordance with the provisions of the legislation governing the mediation in civil and commercial matters and arbitration.

6. The parties will be allowed to indicate an email address for the purpose of making notifications under this law, as long as it is guaranteed the authenticity of the communication and its contents and it remains reliable evidence of the whole remittance and receipt and of the moment when they were done.

Article 5. Excluded renting Excluded from the scope of this Act: a) The use of the housings that doormen, guards, salaried employees, employees and civil servants, are assigned on the basis of the position they hold or the service they provide. b) The use of military housings, regardless of their qualification and regime, which will be governed by the provisions of its specific legislation. c) The contracts in which, renting a property with house-room, it is the agricultural, livestock or forestry use of the land, the main purpose of the renting. These contracts will be governed by the provisions of the law applicable on rural renting. d) The use of university housings, when they have been expressly qualified as such by the University, owner or responsible of them, Costa Luz Lawyers C/ Ancha 30, 3º - 11201 Algeciras - (t) +34 956.092.687 - (f) +34 956.092.697 mldecastro@costaluzlawyers.es – marialuisa@costaluzlawyers.es

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that are assigned to students enrolled in the University and to the teaching and administrative staff and services dependent of it, because of the link established between each of them and the respective University, to which will correspond in each case to establish the rules to which their use will be subject. e) The temporary transfer of use of the whole housing furnished and equipped for immediate use, marketed or promoted in touristic offer channels and carried out for profit, when it is subject to a specific regime, derived from its sectorial regulations.

TITLE II. Renting of Housing CHAPTER I. General rules Article 6. Nature of the rules The stipulations that modify in detriment of the tenant or subtenant the rules of this Title, except where the very rules expressly authorize, are void, and will be considered as not written Article 7. Condition and effects in front of third parties of the renting of housing.

1.The renting of housing will not lose this status although the tenant has not in its rented property his permanent housing, provided that, his non-separated legally or de facto spouse, or his dependent children dwell in it 2. In any case, so that the renting agreed on urban properties, takes effect in front of third parties who have registered their rights, such renting will have to be registered in the Land Registry.

Article 8. Transfer of the contract and subtenancy 1.The contract will not be allowed to be transferred by the tenant without the written consent of the landlord. In case of transfer, the transferee will subrogate in the position of the transferor in front of the landlord.

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2. The rented housing will only be allowed to be subleased partially and with the previous written consent of the landlord.

The sublease will be governed by the provisions of this Title for the renting when the part of the subleased property is intended by the subtenant for the purpose indicated in Article 2.1. If this were not provided, it will be governed by the agreement between the parties.

The right of the subtenant will expire, in any case, when it does the tenant’s who subleased.

The price of the sublease will not exceed, in any case, that of the renting.

CHAPTER II. Duration of the contract Article 9. Minimum time 1.The duration of the renting will be freely agreed between the parties. If this were less than three years, when the day of expiry of the contract arrives, it will be obligatorily extended for annual periods until the lease reaches a minimum duration of three years, unless the tenant expresses to the landlord, a minimum of thirty days before the date of termination of the contract or any of the extensions, his will of not to renew it.

The term will start the date of the contract or when the property is available to the tenant if it were later. It will be the tenant's duty to prove the date of the availability.

2. Renting which duration had not been stipulated or it is indefinite, will be considered held for one year, without prejudice to the right of annual extension for the tenant, in the terms of the previous section.

3. There will be no mandatory extension of the contract if, after the first year of duration, the landlord notifies the tenant he needs the rented housing to use it for permanent housing for himself or his relatives in the first degree of consanguinity or because of adoption or for his spouse in the event of a judgment of separation, divorce or annulment.

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The said notice must be given to the tenant at least two months before the date on which the housing is going to be needed and the tenant will have to deliver the rented property within that period if the parties do not reach a different agreement.

If three months after the termination of the contract or, in its case, after the evacuation of the housing, the landlord or their relatives in the first degree of consanguinity or because of adoption or his spouse in the event of a judgment of separation, divorce or annulment had not occupied it, according to the cases, the tenant will be allowed to choose, within thirty days, between being restored to the use and enjoyment of the rented property for a new period of until three years, respecting ,in the rest , the contractual conditions existing at the time of termination , with compensation of costs since the housing evacuation until the reoccupation, or be compensated by an amount equivalent to one month for each year remaining until completing three, except that the occupation had not taken place due to force majeure.

4. In the case of an unregistered property, it will also last three years the renting of housing that the tenant has agreed in good faith with the person appearing to be the owner under a state of affairs whose creation is attributable to the true owner, without prejudice to the power of non-renewal referred to in paragraph 1 of this Article. If the landlord transferred the rented housing, he will be subject to the provisions of Article 1571 of the Civil Code. If he were won in a trial by the true owner, it will be done as provided in the said Article 1571 of the Civil Code, as well as indemnifying the damages.

Article 10. Extension of the contract 1.If the date of termination of the contract arrives, after a period of at least three years party has notified to the other at least thirty his will of not to renew it , the contract will for another year.

or any of its extension of duration of it, and no days prior to such date, be necessarily extended

2. Once the rented contract has been registered, the right of extension established in Article 9, as well as the one year extension referred to in the preceding paragraph, will be imposed in relation to

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third parties purchasers who have the conditions of Article 34 of the Mortgage Act. 3. To the extended contract, it will go on being applied the legal and conventional regime to which it is subject.

Article 11. Withdrawal of the contract The tenant will be allowed to withdraw the renting contract, once it has passed at least six months, provided that it informs the landlord with a minimum of thirty days. The parties will be allowed to agree in the contract that, in case of withdrawal, the tenant has to indemnify the landlord with an amount equivalent to one month of the rent in force for each year of the contract that still remains until being terminated. The periods less than one year will lead to the proportional part of the compensation.

Article 12. Withdrawal and expiry in case of marriage or living together of the tenant 1.If the tenant states his will of not to renew the contract or to withdraw from it, without the consent of the spouse who was living with such tenant, the renting will be allowed to continue for the benefit of the spouse.

2. For this purpose, the landlord may request the spouse of the tenant to state her will on the matter.

After doing the request, the renting will terminate if the spouse does not respond within fifteen days after it. The spouse will have to pay the remaining rent until the termination of the contract, if it had not been paid yet.

3. If the tenant left the apartment without express statement of withdrawal or non-renewal, the renting will be allowed to continue for the benefit of the spouse who was living with him provided that within one month of such abandoning, the landlord receives written notice of the spouse stating her will to be a tenant.

If the contract is extinguished for lack of notice, the spouse will have the obligation of paying the rent of that month.

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4.The provisions of the preceding paragraphs will also have to be applied in favor of the person who had been living with the tenant permanently in a similar relationship to that of a spouse, regardless of the sexual orientation, for, at least, two years prior to withdrawal or abandoning, unless they have had children in common, in which case the mere coexistence will be enough.

Article 13. Termination of the landlord´s right 1.If during the duration of the contract the right of the landlord were terminated by the exercise of a conventional right of repurchase, the opening of a trust substitution, the forced alienation resulting from a foreclosure or a judicial sentence or the exercise of a right of option of purchase, the renting will be terminated.

As provided in the second paragraph of Article 7 and Article 14, the cases in which the renting contract had gained access to the Land Registry prior to the rights that determine the termination of the landlord´s right are excepted. In this case, the renting will go on for the agreed duration.

In the case of a renting on an unregistered property the duration will be the one established in paragraph 4 of Article 9.

2. Renting granted by usufructuary, superficiary and all those who have a similar right of enjoyment of the property, will terminate at the end of the right of the landlord, as well as because of the other causes of termination as a result of the provisions of this Act.

Article 14. Alienation of the rented housing 1.The purchaser of a property registered in the Land Registry, rented as housing in whole or in part, that meets the requirements of Article 34 of the Mortgage Act, only will be subrogated in the rights and obligations of the landlord if the renting were registered, as provided

by Articles 7 and 10 of this Act, before the transfer of the property.

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2.If the property is not registered in the Land Registry, the provisions of the first paragraph of Article 1571 of the Civil Code will be applied.

If the purchaser uses the right recognized by the aforementioned article, the tenant may require to be let go on for three months, since the purchaser notifies him irrefutably his purpose, during which he will have to pay the rent and other generated amounts to the purchaser.

He will also be allowed to require to the seller to compensate him for damages caused to him

Article 15. Separation, divorce or annulment of the tenant’s marriage 1.In cases of nullity of marriage, legal separation or divorce of the tenant, the non-tenant spouse will be allowed to continue using the rented housing when it is given to her in accordance with the provisions of the civil law that is applicable. The spouse who has been entitled to use the rented housing permanently or during a period superior to the remaining one to fulfill the renting contract, will become the holder of the contract.

2. The spouse´s will to continue in the use of the housing will have to be communicated to the landlord within two months after it was notified the corresponding judicial sentence, enclosing a copy of that juridical sentence or the part of it that affects the use of housing.

Article 16. Death of the tenant 1. In case of death of the tenant, it will be allowed to subrogate to the contract: a) The spouse of the tenant that in the time of his death was living with him. b) The person who has been living with the tenant permanently in a similar relationship to that of a spouse, regardless of his, her sexual orientation, for at least, two years before the time of his death, unless they had had children in common, in which case the mere coexistence will suffice.

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c) The descendants of the tenant who at the time of his death were subject to his parental authority or tutorship, or had usually lived with him for the two preceding years. d) The tenant's ancestors who had lived habitually with him during the two years preceding his death. e) The tenant´s brothers, sisters in whom the situation referred in the previous letter coincides f) The persons other than those mentioned in the previous letters who suffer a disability equal to or superior to 65%, provided they have a family relationship until the third collateral degree with the tenant and have lived with him for the two years before his death.

If at the time of the tenant´s death no such person exists, the renting will be terminated.

2.If there are several of the above mentioned persons, in the absence of unanimous agreement on who of them will be the beneficiary of subrogation, it will govern the order of preference established in the previous section, except that it will be preferred septuagenarian parents to descendants. Between the descendants and the ancestors, it will have preference the nearest one in degree, and among brothers and sisters, the one with double bond over the half brother or sister.

The cases of equality will be solved in favor of who had a disability equal to or superior to 65%, in default of this situation, in favor of who had the biggest family responsibilities and, ultimately, in favor of the youngest descendant, the oldest ancestor or the youngest brother, sister.

3. The renting will terminate if within three months since the death of the tenant the landlord does not receive written notice of the fact of his death, with death registration certificate, and of the identity of the subrogated, stating his relationship with the deceased person and offering, in his case, a prima facie evidence that meets the legal requirements for subrogation. If the termination occurs, all those who Costa Luz Lawyers C/ Ancha 30, 3º - 11201 Algeciras - (t) +34 956.092.687 - (f) +34 956.092.697 mldecastro@costaluzlawyers.es – marialuisa@costaluzlawyers.es

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could succeed the tenant, except those who give up their option by written notice to the landlord within the month following the death, will be jointly liable to pay the rent of those three months.

If the landlord received in time and form several notifications whose senders hold as beneficiaries of the subrogation, the landlord will be allowed to consider them as joint debtors of the obligations of the tenant, while maintaining their claim of subrogation.

4. In renting which initial duration exceeds three years, the parties will be allowed to agree that there is no right of subrogation in the case of death of the tenant, when it takes place after the first three years of the renting, or that the renting terminates in three years when the death had occurred previously.

CHAPTER III. About the Rent Article 17. Determination of the rent 1.The rent will be the one freely decided by the parties 2. Unless there is an opposite agreement, the payment of the rent will have to be done monthly during the first seven days of the month. In no case the landlord will be allowed to require the prepayment of more than one month's rent.

3.The payment will be done at the place and by the procedure agreed by the parties or, failing it , in cash and in the rented housing.

4. The landlord is obliged to give to the tenant a receipt of the payment, unless it was agreed that it is carried out by proceedings that prove the effective fulfillment of the payment obligation by the tenant.

The receipt or proving document that replaces it will have to contain separately the amounts paid by the different items that form the entire payment and, specifically, the rent in force.

If the landlord fails to deliver the receipt, all expenses done by the tenant to prove the payment, will be paid by the landlord.

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5. In the renting contracts it will be allowed to be freely agreed by the parties that, during a specified period, the obligation of the payment of the rent can be replaced wholly or partially by the tenant’s commitment to reform or rehabilitate the property under the terms and conditions agreed.

At the end of the renting, the tenant will not be allowed to ask for in any case an additional compensation for the cost of the works done in the building.

The breach by the tenant of the fulfillment of the work under the terms and conditions agreed will be allowed to be a cause for termination of the renting and it will be applicable the provisions of paragraph 2 of Article 23.

Article 18. Updating of the rent 1.During the validity of the contract, the rent will be allowed to be updated by the landlord or the tenant after every period of one year, under the terms agreed by the parties.

In the absence of an express agreement, the contract will be updated applying to the preceding annual rent the percentage change of the national general index of the system of indices of consuming prices in a period of twelve months immediately previous to the date of each update, taking as reference month for the first update the one corresponding to the last index that was published at the date of the conclusion of the contract, and successively ,the one that corresponds to the last one applied.

2.. The updated rent will be required to the tenant since the month after the one in which the interested party notifies it to the other party by writing, stating the percentage of applied change and accompanying it , if the tenant so requires, with the appropriate certification from the National Institute of Statistics. It will be valid the notification done by a note in the monthly receipt of the previous payment.

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Article 19. Increase of the rent because of improvements 1.The carrying out by the landlord of improvement works, within three years of the contract will entitle him, unless there is an opposite agreement, to increase the annual rent in the amount that results from applying the capital invested in the improving work, the legal interest rate of the money at the time of the end of works plus three points, without exceeding the increase twenty percent of the current rent at that time.

For the calculation of the invested capital, the public subsidies obtained for the realization of the work will have to be discounted 2.When the improvement affects to several properties of a building in horizontal property regime, the landlord will have to distribute proportionally among them all the invested capital, applying , for this purpose, the installments of participation that corresponds to each one of them. In the case of buildings that are not in horizontal property regime, the invested capital will be distributed proportionally among the affected properties by agreement between landlord and tenant. In the absence of agreement, it will be distributed proportionally according to the surface of the rented property.

3.The increase of the rent will take place since the month following to that in which, the works already finished, the landlord notifies by writing to the tenant the amount of it, detailing the calculations leading to its determination and providing copies of documents from which the cost of the works can be confirmed Article 20. General and individual services expenses 1.The parties will be allowed to agree that the general expenses for the proper maintenance of the property, its services, taxes, charges and liabilities that cannot be individually allocated and correspond to the renting housing or its accessories, are paid by the tenant.

In buildings under horizontal property regime such expenses will be those corresponding to the renting property based on its share of participation

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In buildings that are not under horizontal property regime, such costs will be those assigned to the rented property based on its surface.

To be valid, this agreement will have to be written and to determine the annual amount of such expenses to the date of the contract. The agreement that refers to taxes will not affect the Administration.

2. During the first three years of validity of the contract, the amount that the tenant has to pay for the item referred to in the previous section, with the exception of taxes, it will only be allowed to be increased by an agreement of the parties, annually, and never in a percentage superior to double than that in which the rent can be increased as provided in paragraph 1 of Article 18.

3. The expenses because of services that the rented property has, individualized by using counters equipments, will be paid in all cases by the tenant.

4. The payment of the expenses referred to in this Article, will be proved as provided in Article 17.4.

CHAPTER IV. About rights and obligations of the parties Article 21. Housing Conservation 1.The landlord is obliged to carry out, without the right to increase the rent , all the repairs needed to keep the house in the conditions of habitability to serve for the agreed usage, unless the damage that has to be repaired is attributable to the tenant according to Articles 1563 and 1564 of the Civil Code.

The obligation to repair is limited by the destruction of the housing for reasons not attributable to the landlord. In this case, it will be done what it is written in Article 28.

2. When the carrying out of a conservation work can not reasonably be deferred until the conclusion of the renting, the tenant is obliged to bear it, even if it is very annoying for him or he is deprived of a part of the housing during it.

If the work lasted more than twenty days, the rent will have to be decreased in proportion to the part of the house from which the tenant is deprived.

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3. The tenant will have to inform the landlord, in the shortest possible time, about the need for repairs provided for in paragraph 1 of this Article, and for this only purpose he will have to provide the direct verification, by himself or by technicians who he designates, of the state of the housing.

At all times, and after notifying the landlord, he will be allowed to do the urgent ones in order to prevent an imminent harm or a serious discomfort, and immediately demand the amount to the landlord.

The small repairs required by the wear and tear of the housing will be paid by the tenant.

Article 22. Improvement Works 1.The tenant is obliged to bear the carrying out of works by the landlord which execution can not reasonably be deferred until the conclusion of the renting.

2. The landlord who decides to carry out one of such works will have to give written notice to the tenant at least three months in advance, about its nature, its beginning, its duration, and its estimated cost.

During the period of one month since such notice, the tenant will be allowed to terminate the contract, except if the works don´t affect or affect in an irrelevant way to the rented property.

The renting will expire two months after the withdrawal, during which the works will not be allowed to begin.

3. The tenant who bears the works will be entitled to a reduction of the rent in proportion to the part of the housing from which he is deprived because of them, as well as to a compensation for the expenses that the works oblige him to do.

Article 23. Works of the tenant 1.The tenant will not be allowed to do works that alter the configuration of the housing or of the accessories referred to in paragraph 2 of Article 2 without the landlord's consent, expressed by writing.

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In no case, the tenant will be allowed to carry out works that cause a decrease in the stability or safety of the housing.

2. Without prejudice to the right to terminate the contract, the landlord who has not authorized the carrying out of the works will be allowed to require, at the conclusion of the contract, that the tenant puts back all things to the previous state or retain the modification with no right by the tenant to claim for any compensation .

If, in spite of what it is established in paragraph 1 of this Article, the tenant has made works that have caused a decrease in the stability of the building or the security of the housing or its accessories, the landlord will be allowed to require immediately to the tenant the replacement of the things to the previous state.

Article 24. Tenants with Disabilities 1. The tenant, after written notice to the landlord, will be allowed to do inside the housing those works or actions necessary so that it can be used adequately and according to the disability or to the age of over seventy years, both of the tenant and of his spouse, of the person who lives continuously in a similar relationship, regardless of his sexual orientation or of his relatives who live with them permanently, provided they do not affect to common elements or building services or cause a decrease in its stability or security.

The tenant will be obliged, at the end of the contract, to restore the previous state of the housing, if required by the landlord.

Article 25. Right of preferential purchase option 1.In case of sale of the rented property, the tenant will have a right of preferential purchase option on it, as provided in the following sections.

2. The tenant will be allowed to exercise a right of first refusal on the rented property within thirty calendar days since the day after he is notified by an irrefutable notice the decision to sell the rented property, the price and the other essential terms of transfer.

The effects of the notification prevented in the preceding paragraph will expire one hundred and eighty calendar days after it has been done.

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3. In the case referred to in the previous section, the tenant will be allowed to exercise the right of repurchase, subject to the provisions of Article 1518 of the Civil Code, when he had not received any notification or it had been omitted from it any of the requirements as well as when the cash price of the purchase were lower or the other essential conditions less onerous.

The right of repurchase will expire thirty calendar days since the day after the notification that the purchaser will have to give to the tenant about the essential conditions in which the purchase was done, by the delivery of a copy of the deed or of the document in which it was formalized.

4. The tenant´s right of first refusal or repurchase will have preference over any other similar right, except the right recognized to the co-owner of the housing or the conventional one registered in the Land Registry when the rental contract was done.

5. To register the sales titles of renting housings in the Land Registry it will have to be justified that the notifications prevented in the previous sections, with the requirements demanded in them have taken place in their respective cases.

When the housing that has been sold was not rented, so that the purchase may be registered, the seller will have to state so in the deed, under penalty of forgery of public documents.

6. When the sale falls, as well as on the rented housing, on the other objects rented as accessories of the housing by the very landlord referred to in Article 3, the tenant will not be allowed to exercise his right of preferential purchase option only on housing.

7. There will be no pre-emptive rights when the rented housing is sold together with the other housings or properties belonging to the landlord and being part of the same building neither when all the floors and properties of the building are sold jointly to the same buyer by different owners. If in the property exists only one housing, the tenant will have the pre-emptive rights provided in this article.

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purchase. In cases where such renunciation has been agreed, the landlord will have to notify the tenant his intention to sell the housing at least thirty days before the date when he enters the sale contract.

CHAPTER V. About suspension, resolution and termination of the contract Article 26. Habitability of the housing When the execution in the rented housing of conservation works or works approved by a competent authority make it uninhabitable, the tenant will have the option to suspend the contract or to withdraw from it with no compensation.

The suspension of the contract will mean, until the end of the works, the stop of the term of the contract and the suspension of the obligation to pay rent.

Article 27. Breach of obligations 1.The breach by any of the parties of his obligations resulting from the contract will entitle the party who has fulfilled his to require the obligation or to take the necessary steps for the termination of the contract in accordance with Article 1124 of the Civil Code.

2.Besides, the landlord will be allowed to terminate the contract for the following reasons: a) The non-payment of the rent or, in its case, of any of the amounts which payment the tenant had accepted or belongs to him. b) The non-payment of the guarantee deposit or of its update.

c) The subtenancy or the transfer without the required consent. d) The execution of damages intentionally done in the property or of works without consent of the landlord when this is necessary.

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e) When annoying, unhealthy, noxious, dangerous or illegal activities take place in the housing f) When the housing is no longer set aside for satisfying mainly the permanent need of housing of the tenant or of the person who was occupying it effectively according to the provisions of Article 7.

3. In the same way, the tenant will be allowed to terminate the contract because of the following reasons: a) The non-execution by the landlord of the repairs referred to in Article 21. b) The disruption by fact or law done by the landlord in the use of the housing.

4.In case of renting of urban property registered in the Land Registry, if it had been stipulated in the contract that the renting will be terminated for non-payment of the rent and that in this case the property had to be returned immediately to the landlord, the termination will take place automatically once the landlord has requested the tenant by court or public notary at the address designated for that purpose in the registration, urging the payment or the fulfillment , and he had not replied to the request within ten working days, or he replies accepting the termination automatically , all of it by the same judge or notary who did the request.

The title provided to the register procedure, together with the copy of the request, from which it results the notification and which has not been answered by the request of payment or that has been answered accepting the resolution automatically, will be a sufficient title to get the cancellation of the renting in the Land Registry.

If there were later loads that fall on the renting, it will also be necessary for its cancellation to justify the irrefutable notification to the holders of them, in the address appearing in the Registry, and to prove the consignment in his favor before the same notary, of the guarantee deposit given by the tenant.

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Article 28. Termination of the renting The renting will terminate, as well as by the other causes referred to in this Title, because of the following ones: a) For the loss of the rented property for reason not attributable to the landlord. b) For the firm statement of ruin agreed by the competent authority.

TITLE III. About renting for use other than housing.

Article 29. Alienation of the rented property The purchaser of the rented property will be subrogated to the rights and obligations of the tenant, unless the requirements of Article 34 of the Mortgage Law coincide in the purchaser.

Article 30. Conservation, improvement and works of the tenant.

The provisions of Articles 21, 22, 23 and 26 of this Law will also be applicable to the renting regulated by this Title. The provisions of Article 19, will also be applicable since the beginning of the renting.

Article 31. Right of preferential purchase.

The provisions of Article 25 of this Act will also be applicable to renting governed by this title.

Article 32. Transfer of contract and subtenancy When in the rented property a business or professional activity is done, the tenant will be allowed to sublet the property or transfer the renting contract without the consent of the landlord.

2.The landlord is entitled to a rent increase of ten percent of the rent in force in the case of a partial subtenancy, and of twenty per cent in the case of the transfer of the contract or the total subtenancy of the rented property.

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3.It will not be considered as a transfer the change in the person of the tenant as a consequence of the merger, the transformation or demerger of the tenant society, but the landlord will be entitled to increase the rent referred to in the preceding paragraph.

4. Both the transfer and the subtenancy will have to be notified in an irrefutable way to the landlord within one month since they were agreed Article 33. Death of the tenant In case of death of the tenant, when a business or professional activity is carried out in the property, the heir or legatee who continues the practice of the activity will be allowed to subrogate in the rights and obligations of the tenant until the expiry of the contract.

The subrogation will have to be notified by writing to the landlord within two months after the date of the death of the tenant.

Article 34. Compensation to the tenant The termination by the passing of the conventional term of the renting of a property in which during the last five years a commercial activity of retail sale has been practiced, will entitle the tenant to a compensation by the landlord, provided that the tenant has stated four months before the end of the term his will to renew the contract for a minimum of five years and for a market rent.

It will be considered as a market rent the one agreed by the parties; in the absence of agreement, the one decided by the arbitrator designated by the parties.

The amount of the compensation will be decided as follows: 1.If the tenant began in the same municipality, within six months after the termination of the renting, the practice of the same activity to which he was devoted, the compensation will include the cost of the move and the damages resulting from the loss of customers

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comparing the new quantity in the six first months with the previous one 2. If the tenant initiated within six months after the termination of the renting a different activity or didn´t start any, and the landlord or a third party carries out in the property within the same period the same activity or one related with the one carried out by the tenant, the compensation will be a monthly payment for every year of duration of the contract , with a maximum of eighteen monthly payments.

It will be considered as a similar activity the one typically suitable to profit, though only part of the customers gained by the activity practiced by the tenant.

In case of disagreement between the parties on the amount of compensation, it will be decided by the arbitrator appointed by them.

Article 35. Automatic resolution The landlord will be allowed to terminate the contract automatically for the reasons specified in points a), b), d) and e) of paragraph 2 of Article 27 and for the transfer or subtenancy of the property defaulting what it is written in Article 32.

TITLE IV. Common orders Article 36 .Guarantee Deposit 1.At the execution of the contract the requirement and providing of the guarantee deposit equivalent to one monthly rent in the renting of the housing and two ones in the renting for use other than housing, will be obligatory. During the first three years of the contract, the guarantee deposit is not subject to update.

But every time the renting is extended, the landlord will be allowed to require its increase, or the tenant its decrease, until being equal to one or two monthly payments of the rent in force, at the time of the extension.

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2. The update of the guarantee deposit during the period of time in which the term agreed for the renting exceeds three years, will be governed by the agreement of the parties.

In the absence of specific agreement, what it has been agreed about the update of the rent it will mean also that it is what they want for the update of the guarantee deposit.

3. The balance of the guarantee deposit that must be returned to the tenant at the end of the renting, will accrue the legal interest, one month after the delivery of the keys by him if this refund had failed 4.The parties will be allowed to agree any guarantee of compliance by the tenant of his obligations in addition to the cash guarantee deposit.

5. The General Administration of the State, The Administrations of the Autonomous Communities and the entities that make up the Local Administration , the autonomous agencies, the business public bodies and other public bodies related or dependent on them, and the Benefit Society of Work Accidents and Occupational Diseases of the Social Security in its public function of cooperation in the management of the Social Security and its Pooled Centers and Institutions, when the rent must be in charge of their budgets are excluded from the obligation to provide guarantee deposit Article 37. Entering of the renting The parties will be allowed to compel each other to the written entering of the renting contract. In this case, it will appear the identity of the parties, the identification of the rented property, the agreed duration, the initial rent of the contract and the other clauses that the parties had freely agreed.

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TITLE V. Renting Judicial Processes Article 38. Jurisdiction The judgment of the disputes about renting governed by this Act will be done by the Judge of First Instance of the place in which the property is without application of the rules about express or tacit submission of Section II of Title II of Book I of the Civil Procedure Act. Article 39. Procedure 1.The judicial proceedings about the disputes on contracts ruled by this Act will be governed by the common procedural rules with the modifications resulting from the provisions therein.

2. Such disputes will be substantiated by the rules of the declaratory proceeding, with the exceptions of paragraphs 3 and 4 of this article.

3.The claims that are presented because of a precarious state, the end of the renting term or the termination of the renting for non-payment of the amounts referred to in the first cause of paragraph 2 of Article 27 of this Law ,will be processed by the procedure established for the eviction judgment in Articles 1570 and the following ones of the Civil Procedure Act. 4.When exclusively sues to determine rents or amounts that, in accordance with this Act must be paid by the tenant are brought, it will be decided in oral proceeding, never mind the amount under dispute.

5.The parties will be allowed to agree the submission of the disputes to the Courts of Arbitration, in accordance with the provisions of Law 36/1988, of December 5.

6. When any of the contracting parties has not his domicile within the judicial district where the property is, a domicile located in it for the purpose of receiving any notice related to the rights and obligations recognized in this Act will be allowed to be designated.

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Article 40. Accumulation of actions 1. The claimant will be allowed to accumulate the actions that assist him against various tenants of a property, even if they are so by different contracts, provided that they are based on facts common to all the defendants. In the same way, the various tenants of a property will be allowed to accumulate the actions that assist them against the same landlord, provided that they are based on common facts.

The provisions of the preceding paragraph will not be applied to the eviction trials.

2. The landlord, in the cases of termination of the contract for nonpayment, will be allowed to bring in an accumulated and simultaneous manner the action of termination of the contract and the claim of the owed amounts. The processing of these processes will be done according to the rules governing the declaratory proceeding.

ADDITIONAL PROVISIONS. First. Regime of public housing rent 1. The term of the legal regime of the public housings, which are qualified for renting since the entry into force of this Act, will conclude when the period specified in the applicable regulations for the amortization of the qualified loan obtained for its promotion finishes totally or, in the absence of the loan, after twenty five years since the date of the corresponding final rating.

2. The initial maximum rent per useful square meter of the public housings referred to in the previous section, will be the percentage of the maximum selling price which corresponds in accordance with the applicable state or regional regulations.

3. In any case, the revision of the rent of public housings, whatever the legislation under which they are regulated, will be allowed to be done annually based on the percentage changes of the General National Index of the System of Consumer Price Indices.

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4. In addition to the initial or revised rents, the landlord will be allowed to receive the real cost of the services enjoyed by the tenant and which are paid by the landlord.

5. Without prejudice to the administrative sanctions that may proceed, the clauses and provisions that establish rents exceeding the maximum ones permitted by the law applicable to the public housing will be null.

6. The provisions of the preceding paragraphs will not be allowed to be applied to public housings promotion regulated by Royal DecreeLaw 31/1978.

7. The provisions of the preceding paragraphs will be of general application in the absence of specific legislation of the Autonomous Communities with authority in this matter.

8. The renting of public socially protected housings will be governed by their special rules according to the duration of the contract, the changes of the rent, the limits of repercussion of amounts because of damages and improvements, and the provisions concerning the transfer and subrogation in the renting, and in those issues not regulated by them in this Act, which will be fully applied when the renting ceases to be subject to those provisions.

The exception will not reach the questions of authority and procedure in which will entirely be applied the provisions of this Act. Second. Modification of the Mortgage Law 1. Article 2, number 5 of the Mortgage Act, approved by Decree of February 8, 1946, will be written as follows: "5th The renting contracts of real estate, and the sub-renting, transfers and subrogations of them."

2. Within nine months since the entry into force of this Act the access requirements of urban renting to the Land Registry will be established.

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Third. Deposit of guarantee deposits The Autonomous Communities will be allowed to establish the obligation for landlords of urban property subject to this Act to deposit the amount of the guarantee deposit governed by Article 36.1 of this Law, without accrual of interest, available to the Autonomous Authority or the designated public body until the termination of the corresponding contract.

If after one month since the end of the contract, the Autonomous Administration or the authorized public body does not proceed to the refund of the deposited amount, this one will accrue the corresponding legal interest.

Fourth. Aids for access to housing The persons who, in application of what it is established in the second transitional provision of this Act, are deprived of the right of subrogation "mortis causa" recognized to them by the recast text of the Urban Renting Act, approved by Decree 4104/1964, December 24, will be preferential individual of the programs of public aids for the access to housing, provided they meet the requirements regarding maximum incomes that are established in those programs.

Fifth. Modification of the Civil Procedure Act 1. Article 1563 of the Civil Procedure Act will be written this way: 1st.- The eviction for non-payment of rents, of similar amounts or of quantities which payment had been assumed by the tenant in the renting of housings or in the renting of an habitable urban property where professional, trade or industrial activities are practiced , will be allowed to be enervated by the tenant if at any time before the day appointed for the trial, he pays to the claimant or makes available for him in the Court or by notary the sum of the amounts in which ineffectiveness the claim is based and those ones which he owes in that moment.

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2nd This enervation will take place neither if there had been another one before, nor when the landlord had required, by any means that can demonstrate its certainty, to pay to the tenant four months prior to the presentation of the claim and the tenant had not paid the amounts due at the time of such presentation.

3rd In any case, it must be indicated in the notice of appeal the contributory circumstances that may allow or not the enervation.

When this is appropriate, the Court will indicate in the citation the duty of paying or earmarking the amount before the trial. " 4th The appeals against judgments in the matters referred to in Article 38, will have preferential processing both before the Provincial Courts, and the High Courts.

In proceedings with eviction, appeals and cassation will not be accepted to the defendant, when appropriate, if he does not prove when he brings them to have met the due rents and those which according to the contract must be paid in advance , or if he does not earmark them judicially or by notary .

If the tenant does not comply with the abovementioned duty, the judgment will be deemed as definitive and the execution will be done, providing that required by the Judge or the Court who judges them he does not fulfill his obligation of paying or earmarking within five days.

It will also be deemed as null and void the cassation or appeal brought by the tenant, whichever it is its state, if whilst it is substantiated he fails to pay the installments that fall due or those he must pay in advance. However, the tenant will be allowed to preventively advance or consign the payment of several unexpired terms, which will be subject to liquidation once the sentence is definitive. In any case, the payment of such amounts will not be deemed as contractual novation.

Article 1687.3 of the Civil Procedure Act, will be written this way: "The sentences pronounced by the High Courts in the judgments of eviction with have no special regulation, except those pronounced in trials of eviction for nonpayment of rent, those pronounced in proceedings of urban renting followed by the processes of declaratory proceeding (in this latter case when not in accordance with the one pronounced in first instance) and those in trials of right of Costa Luz Lawyers C/ Ancha 30, 3º - 11201 Algeciras - (t) +34 956.092.687 - (f) +34 956.092.697 mldecastro@costaluzlawyers.es – marialuisa@costaluzlawyers.es

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repurchase, when in all cases they reach the amount required for this kind of appeals in the ordinary declarations. However, in the case of renting of housing it will be sufficient if the amount exceeds 1,500,000 pesetas. The sentence of appeal and the one of first instance will be deemed to be in order though they differ regarding the adjudication of costs. " Sixth. Census of urban renting 1. The Government will proceed, by the Ministry of Public Works, Transport and Environment, within one year since the entry into force of this Act, to do a census of the contracts of housing renting subject to this Act surviving to its entry into force.

2. This census will include identifying data of the landlord and the tenant, of the rent of the contract, of the existence or not of revision clauses, of its duration and of the date of the contract.

3. For this purpose, the landlords will have to send, to the Ministry of Public Works, Transport and Environment, within three months since the entry into force of the Act, the data of the contract referred to in the above paragraph.

4. The tenants will have the right to request the inclusion of their contracts in the census referred to in this provision, giving notice by writing to the landlord of the data he has sent.

5. The breach of the obligation under paragraph 3 will deprive the landlord who had breached it of the right to tax benefits referred to in the fourth final provision of this Act. Seventh. Modification Act 36/1988, of December 5, on Arbitration It is added to Article 30 of Law 36/1988, of December 5, on Arbitration, a number 3, which content will be the following one: "In the arbitration proceedings which bring cause of contracts subject to the legal regime of the Urban Renting Act, absent an express agreement of the parties, the arbitrators will have to pronounce the

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award within a period of three months, as provided in number 1 of this Article. ' Eighth. Right of return The right of return regulated in the Fourth 3rd additional provision of the Consolidated Version of the Act about the Regime of the Land and Urban Planning, approved by Royal Legislative Decree 1/1992, of June 26 will be governed by the provisions of this order and, failing it, by the rules of the Consolidated Version of the Urban Renting Act 1964.

When in the non-expropriating isolated urban actions required by the urban planning, it were necessary to proceed to the total demolition or the comprehensive rehabilitation with conservation of facade or of a building structure, in which there are urban rented housing whichever it be the date of the renting , the tenant will have the right that the landlord of that property provides him a new housing of a surface not inferior to fifty percent of the previous one, provided that it has at least ninety square meters, or not inferior to the one he had, if it had not that surface, with similar characteristics to that one and that it is located in the same site or in the vicinity of the demolished or rehabilitated building.

Nineth. Declaration of the disability status For the purposes stated in this Act, the status of disability and its degree will have to be declared, according to the current regulations, by the centers and services of the competent Public Administrations.

Tenth. Prescription All the rights, obligations and actions resulting from the renting contracts covered by this Act, including the surviving ones when the entry into force of it, will prescribe, when there is no provided specific period of prescription, in accordance with the provisions of the general regime contained in the Civil Code.

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TRANSITIONAL PROVISIONS. First. Contracts signed after May 9, 1985 1. The contracts of renting of housing signed after May 9, 1985 surviving at the date of entry into force of this Act, will go on being governed by the provisions of Article 9 of Royal Decree-Law 2/1985, of 30 April on Economic Policy Measures, and by provisions for the contract of tenancy in the Consolidated Tenancies Act, approved by Decree 4104/1964 of 24 December.

It will be applicable to such contracts paragraphs 2 and 3 of the second transitional provision.

The tacit renewal of the rent provided in Article 1566 of the Civil Code will be for a term of three years, without prejudice to the right of nonrenewal provided in Article 9 of this Law . The renewed renting will be governed by the provisions of this Act for renting of housing .

2.The renting contracts of commercial property signed since May 9, 1985, surviving in the date of entry into force of this Act, will go on being governed by the provisions of Article 9 of Royal Decree-Law 2/1985, of April 30, and the provisions of the Consolidated Urban Tenancies Act 1964.

In the case of tacit renewal of the rent as provided in Article 1566 of the Civil Code, the renewed renting will be governed by the provisions of this Act relating to renting for non-residential use.

The provisions of the preceding paragraph will be applicable to the renting contracts assimilated to the tenancy ones and to those of commercial properties which were signed since May 9, 1985 and still existing at the date of entry into force of this Act. Second. Housing renting contracts signed before May 9, 1985 A) Applicable regulatory regime.

1.The housing renting contracts signed before May 9, 1985 surviving in the date of entry into force of this Act, will go on being governed by the rules relating to the contract of tenancy of the Consolidated

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Urban Tenancies Act 1964, except the modifications contained in the following sections of this transitional provision.

2.It will be applicable to these contracts the provisions of Articles 12, 15 and 24 of this law.

3.It will stop been applicable the provisions of paragraph 1 of Article 24 of the consolidated Urban Renting Act 1964.

There will be right of first refusal and repurchase, regulated in Chapter VI of the consolidated Urban Renting Act 1964, neither in the cases of allocation of housing as a consequence of division of common thing when the renting contracts have been granted after the constitution of the community on the thing, nor in the cases of division and allocation of common thing acquired by inheritance or bequest.

A)Termination and subrogation.

1. Since the entry into force of this Act, the subrogation referred to in Article 58 of the consolidated Urban Renting Act 1964 will only be allowed to take place in favor of the tenant's spouse not separated legally or in fact, or failing it , of the children who lived together with him during the two years before his death; in the absence of the abovementioned , the ancestors of the tenant who were in his charge and lived with him three years, at least, before the date of his death will be allowed to subrogate.

The contract will terminate on the death of the subrogated person , unless he were a child of the tenant not affected by a disability equal to or superior to 65 per 100, in which case it will terminate two years later or in the date that the surrogated person reaches the age of twenty-five years , if this were later.

However, if the subrogate person was the spouse and at the time of his death there were children of the tenant who lived together with him, it will be allowed another subrogation.

In this case, the contract will terminate within two years or when the child reaches the age of twenty five years if this date is later, or because of his death if he is affected by the disability mentioned in the previous paragraph.

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2.After the death of the person who, under the provisions of Articles 24.1 and 58 of the consolidated Urban Renting Act 1964, had subrogated in the position of the tenant before the entry into force of this Act, the only person who will be allowed to subrogate will be his spouse not legally or de facto separated and, failing it, the children of the tenant who were dwelling in the rented housing and had lived with him during the two years prior to his death.

The agreement will terminate on the death of the subrogated person, unless he was a child of the tenant not affected by a disability equal to or superior to 65 per 100, in which case it will terminate two years afterwards or when the child reaches the age of twenty five years if this date is later.

No further subrogation are authorized.

3.When it takes place the death of the person who according to Article 59 of the consolidated Urban Renting Act 1964 occupied the housing by second subrogation, further subrogations are not allowed.

4.The rights recognized in paragraphs 4 and 5 of this provision to the spouse of the tenant, will also be applicable in respect of the person who had been living with the tenant permanently in a similar relationship to that of spouse, regardless of his sexual orientation for, at least, the two years prior to the time of his death, unless they have had children in common, in which case the mere coexistence will suffice.

5.During the ten years after the entry into force of the Act, if the subrogation provided for in the abovementioned paragraphs 4 and 5 had occurred in favor of children older than sixty-five years or who received public benefits for retirement or permanent disability in degree of permanent absolute disability or severe disability, the agreement will terminate when the death of the surrogated child takes place.

6.The persons who exercise the subrogation under paragraphs 4, 5 and 7 of this provision must prove the condition of living together with the deceased tenant that is appropriate for each case.

The condition of living together with the deceased tenant must be habitual and necessarily in the rented housing.

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It will be applicable to the subrogation for death cause regulated in paragraphs 4-7, the rules on procedure and order of priority established in Article 16 of this Law. In no case the beneficiaries of a subrogation will be allowed to renounce to it in favor of another one with a different degree of priority. a)Other rights of the landlord.

1.For the annuities of the contract beginning after the entry into force of this Act, the tenant will have the following rights: 1.1. In the Property Tax, the value of the rented property will be calculated by capitalization 4 per 100 of the accrued rent, provided that the result is inferior to that resulting from the application of the rules of valuation of real estate under the Act of Property Tax. 1.2 He will be allowed to require the tenant the full amount of the installment of the Property Tax that corresponds to the rented property.

When the installment was not individualized it will be divided in proportion to the area of each housing.

1.3 It will be allowed that the amount of repairs needed to maintain the housing useful for the agreed use affects to the tenant, in the terms of Article 108 of the consolidated Urban Renting Act 1964 or in accordance with the following rules: 1st When the repair has been requested by the tenant or agreed by firm judicial or administrative decision.

In case of several affected tenants, the request must have been done by the majority of the affected tenants or, in its case, by tenants who represent the majority of the shares of participation corresponding to the affected flats.

2nd From the capital invested in the incurred costs, it will be deducted the state aids received by the owner.

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3rd To the invested capital it will be summed the amount of the legal interest of the money corresponding to the capital calculated for a period of five years.

4th The tenant will pay annually an amount equal to 10 per 100 of the amount referred to in the previous rule, until its full payment.

In the case of several affected tenants, the amount referred to in the abovementioned rule will be divided among them according to the criteria established in paragraph 2 of Article 19 of this Law. 5th The annual amount paid by the tenant will not be allowed to exceed the smallest of the following amounts: five times his current rent plus the amounts assimilated to it or the amount of the minimum wage, both of them estimated in its annual calculation.

If the landlord had chosen to do the charge in accordance with the abovementioned Article 108, the charge will be done in proportion to the surface of the affected building.

The amount of the cost of the services and supplies produced since the entry into force of the Law will be allowed to be charged in the tenant.

An exception is the case in which by express agreement between the parties all of these costs are on account of the landlord.

A)Rent updating .

The rent of the contract may be updated at the request of the landlord prior certified request to the tenant.

This request may be done on the date on which, since the entry into force of the law, expires an annuity of the contract.

Once this request has been done, in each of the years in which this update is applied, the landlord will have to notify the tenant the amount of the update, accompanying certification from the National Institute of Statistics that states the indices that causes the notified amount.

The update will be carried out according to the following rules: 1st The rent initially agreed in the contract that gave rise to the renting will have to maintain, during each of the annuities in which the update is carried out, with the updated rent, the same proportion that the National General Index of the System of Indices of Consumer Prices or that the National General Index or the General Urban Index

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of the System of the Life Costs of the month preceding the date of the contract with respect to the Index of the month prior to the update.

In the renting of housings covered by Article 6.2 of the consolidated Urban Renting Act 1964 executed before May 12, 1956, it will be estimated as initial rent the revalued one referred to in Article 96.10 of the aforementioned consolidated text, never mind if it was required or not by the landlord, and, as the date of the contract, the month of June 1964.

In the renting of the housings not covered by Article 6.2 of the aforementioned consolidated text executed before May 12, 1956, it will be taken as initial rent the one being received in the month of July 1954 and as the date of the contract, March 1954.

2nd From the updated rent corresponding to each annual period calculated under the provisions of the abovementioned rule or the 5th one, it will only be required to the tenant the percentage resulting from the provisions of the following rules provided that this amount is superior to the rent that the tenant was paying at that time increased in the amounts assimilated to the rent.

In the event that applying the appropriate percentage table proves that the rent he was paying at that time is superior to the amount corresponding to the application of such tables, it would be applied the next superior rate, or in its case the next one or ones that correspond, until the required amount of the updated rent is superior to the one he was paying.

3rd The updated rent will absorb the amounts assimilated to the rent since the first annuity of the revision.

It will be considered as amounts assimilated to the rent for these exclusive effects, the repercussion on the tenant of the increase of cost of the services and supplies referred to in Article 102 of the consolidated Urban Renting Act and the repercussion of the cost of the works referred to in Article 107 of the aforementioned Legal Text.

4th Since the year in which it is reached the one hundred percent of update, the rent that must be paid will be allowed to be updated by the landlord or the tenant according to the percentage change of the previous twelve months in accordance with the General Index of the System of Indices of Consumer Prices, unless the contract contains expressly another system of updating, in which case this one will be applied.

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5th When the updated rent calculated in accordance with the provisions of the 1st rule is superior to the one resulting from applying the provisions of the following paragraph, this last one will be considered as the revised rent.

For these purposes the rent will be calculated by applying on the cadastral value of the rented property in force in 1994, the following percentages: - 12 %, when the cadastral value derived from a revision that had produced effects after 1989.

- 24% for the rest of the cases.

For properties located in the Basque Country it will be applied to the cadastral value the percentage of 24%, for properties located in Navarra it will be applied to the cadastral value the percentage of 12%.

6th The tenant will be allowed to oppose to the update of the rent communicating it irrefutably to the landlord within thirty calendar days after the receipt of his request, in which case the rent that the tenant was paying at that moment, increased with the assimilated amounts, will only be allowed to be updated annually according to the variation in the National General Index of the System of Indices Consumer Prices in the twelve months immediately preceding the date of each update.

The renting contracts for which the tenant exercises the option referred to in this rule will be terminated within eight years, even when there is a subrogation, counting that period since the date of the landlord's irrefutable requirement.

7th It will not be legal the update of the rent written in this paragraph if the sum of the total incomes received by the tenant and the persons usually living with him in the rented housing, do not exceed the following limits:

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Number of persons living together in the rented housing

Limit in number of times the minimum wage

1 or 2

2,5

3 or 4

3

More than 4

3,5

The incomes will be those obtained during the tax year preceding that in which the landlord decides to update the rent.

In the absence of accreditation by the tenant of the incomes received by all persons living together in the rented housing, the expected update will be legal.

8th In the cases in which the update is not legal, the rent that the tenant is paying, plus the assimilated amounts, will be allowed to be updated annually on the basis of the variation in the General Index of Consumer Prices in the twelve months immediately preceding the date of each update.

9th The update of the rent, when it is appropriate, will be done in the following periods of time: a) In ten years, when the sum of the total incomes received by the tenant and the persons usually living with him in the rented property does not exceed 5.5 times the minimum wage.

In this case, the required percentages of the updated rent will be: Annual period of updating since the entry into force of the Act

Required percentage of the required rent

1º

10

2º

20

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3º

30

4º

40

5º

50

6º

60

7º

70

8º

80

9º

90

10º

100

b) In five years, when the sum is equal or superior to 5.5 times the minimum wage.

In this case, the required percentages of the updated rent will be the double ones of those indicated in letter a).

10th What is written in this paragraph will replace the provisions for the renting of housings in numbers 1 and 4 of Article 100 of the consolidated Urban Renting Act 1964.

Third. Business premises renting contracts, executed before May 9, 1985 A) Applicable regulatory regime.

1.Contracts of renting of business premises, executed before May 9, 1985 surviving in the date of entry into force of this Act, will go on being governed by the rules of the consolidated Urban Renting Act 1964 relating to the contract of renting of business premises, except the modifications contained in the following sections of this transitional provision.

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B) Termination and subrogation.

Those contracts that in the date of entry into force of this Act are in a situation of legal extension, will terminate in accordance with paragraphs 3-4.

The renting whose tenant is a natural person it will terminate because of his retirement or death, except if his spouse is subrogated and continues the same activity carried out in the premises.

In the absence of a surviving spouse who continues the activity or if she had subrogated after his retirement or death, if at that time it had not passed twenty years since the approval of the law, a descendant of the tenant who continues the activity in the premises will be allowed to subrogate in the contract. In this case, the contract will last for a sufficient number of years until completing twenty years after the entry into force of the law.

The first subrogation provided in the preceding paragraphs will not be allowed to take place when it had already existed in the renting two transmissions in accordance with the provisions of Article 60 of the consolidated Urban Renting Act. The second subrogation will not be allowed to take place when it had already occurred in the renting a transmission as provided in Article 60.

The current tenant and his spouse, if he had subrogated, will be allowed to transfer the business premises as provided in Article 32 of the consolidated Urban Renting Act. This transfer will allow the continuation of the renting for a minimum of ten years since its execution or the number of years remaining since the time when the transfer is carried out until summing twenty years since the approval of the law.

When in the ten years prior to the entry into force of the Act it had occurred the transfer of the business premises, the deadlines provided in this section will be increased five years.

It will be deemed as the date of the transfer, for the purposes of this paragraph, the one of the writing referred to in Article 32 of the consolidated Urban Renting Act 1964.

The renting of business premises whose tenant is a legal person will terminate in accordance with the following rules: 1st The renting of premises in which commercial activities are carried out, in twenty years.

Commercial activities are considered for this purpose those included in Division 6 of the rate of Tax on Economic Activities.

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The premises with an area exceeding 2500 square meters are excepted.

In this case, the termination will occur in five years.

2nd The renting of premises in which activities other than those referred to in the 1st rule in which are applied fees according to the rates of Tax on Economic Activities are carried out: -Less than 85,000 ptas., in twenty years, -Between 85,001 and 130,000 ptas., in fifteen years, -Between 130,001 and 190,000 ptas., in ten years, -Over 190,000 pesetas., in five years.

The fees that must be taken into account for the purposes provided in this section are the municipal minimum fees or minimum fees according to rate, which include, when appropriate, the complement of area in 1994. In those activities in which is appropriate a discount in the fee of Tax on Economic Activities, that discount will be applied to the municipal minimum fee or minimum fee according to rate with the purpose of determining the due amount.

The periods of time mentioned in the previous rules will be counted since the entry into force of this Law. When in the ten years prior to the entry into force would have been executed the transfer of the business premises, the deadline of the contracts will be increased five years. It will be deemed as the date of transfer the one of the writing referred to in Article 32 of the consolidated Urban Renting Act. When in a premises, activities to which are applied different rates are carried out, it will only be taken into account for the purposes of this section the main one.

It is the tenant who must prove the fee that is appropriate for the activity carried out in the rented premises. In the absence of proof, the renting will be the minimum of the durations provided for in the first paragraph.

The contracts in which, in the date of entry into force of this Act, it has not ended yet the specified period of time agreed in the contract, will last for the time remaining for the expiration of that period. When this period of time is inferior to that resulting from the application of the rules of paragraph 4, the tenant will be allowed to make last the renting the period of time resulting from the application of these rules.

In the cases provided for in this section and in section 4, the tacit extension will be governed by the provisions of Article 1566 of the Civil Code, and the provisions of this Act relating to renting of urban properties for use other than housing will be applicable to the renewed renting.

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A)Rent updating Since the entry into force of this Act, in the date of annual expiration of the contract, the rent of the renting of business premises will be allowed to be updated, at the request of the landlord, after irrefutable requirement to the tenant according to the following rules: 1st The rent initially agreed in the contract that gave rise to the renting will have to maintain with the updated rent the same proportion as the National General Index of the System of Indices of Consumer Prices or as the National General Index or Urban General Index of the System of the Indices of Costs of Life of the month preceding the date of the contract with respect to the Index of the month preceding the date of each update.

In the contracts executed before May 12, 1956, it will be deemed as initial rent the revalued one referred to in Article 96.10 of the abovementioned Consolidated Text, never mind if it was or not required by the landlord, and as an index for the date of the contract, June 1964 2nd From the updated rent corresponding to each annual period calculated in accordance with the provisions of the abovementioned rule, it will only be required to the tenant the percentage resulting from the tables of percentages under the following rules depending on the update period that corresponds, provided that this amount is bigger than the rent that the tenant is paying to the landlord at that time increased by the amounts assimilated to the rent.

In the event that applying the appropriate percentage table proves that the rent he was collecting at that time is superior to the amount corresponding to the application of these tables, it would be applied the next superior rate, or in its case the next or next ones which are appropriate, until the required amount of the updated rent is superior to the collected one without updating.

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3rd In the renting to which it corresponds, in accordance with paragraph 4, a termination period of 5 or 10 years, the revision of the rent will be done in accordance with the following table: Updating since the entry into force of the Act

Required percentage of the updated rent

1st

10

2nd

20

3rd

35

4th

60

5th

100

4th In the renting included in paragraph 3, and in those in which it is appropriate, in accordance with the provisions of paragraph 4, a period of termination of 15 to 20 years, a revision of rent will be done according to the percentages and periods specified in Rule 9th a) of section 11 of the second transitional provision.

5th The updated rent will absorb the amounts assimilated to the rent since the first annuity of the revision.

It will be deemed as assimilated amounts to the rent to these exclusive effects the repercussion to the tenant of the increase of the costs of the services and supplies referred to in Article 102 of the consolidated Urban Renting Act and the repercussion of the cost of the works referred to in Article 107 of the abovementioned Legal Text.

6th Since the year in which it is reached 100% of updating, the rent that must be paid will be allowed to be updated by the landlord or the tenant according to the percentage change that has taken place in the previous twelve months by the General Index of the System of Indices of Consumer Prices, except when the contract contains expressly another system of updating, in which case this one will be applicable.

7th What is written in this paragraph will replace the provisions for renting of business premises in number 1 of Article 100 of consolidated Urban Renting Act 1964.

8th In order to determine the date of execution of the contract, it be paid attention to the one when it was signed, regardless

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the the will the

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current tenant is the original one or the person subrogated in his position.

The tenant will be allowed to revise the rent according to the provisions of the rules 1st, 5th and 6th of the previous section in the first rent that must be paid, since the requirement of revision done by the landlord or on his own initiative.

In this case, the minimum term specified in paragraph 3 and the periods specified in paragraph 4 will increase five years.

The provisions of the preceding paragraph will also be applied in the event that the rent that was being paid at the time of entry into force of the law was bigger than that resulting from the updating under section 7.

The revision of rent prepared for the contracts referred to in paragraph 3 and for those referred to in paragraph 4 which have fixed a period of termination of fifteen or twenty years, will not have to be applied if the tenant chooses not to apply it.

To do so, the tenant must notify the landlord by writing his will within thirty calendar days after receiving his requirement for the revision of the rent.

The contracts of renting in which the tenant does not exercise the option of not revising the rent, will terminate when the fifth annuity expires counting since the entry into force of this Act. A)Other tenant’s rights.

For annuities of the contract beginning after the entry into force of this Act, and until it reaches its termination, it will also be applied to such contracts what it is written in paragraph 10 of the second transitional provision.

B)Other landlord’s rights .

The landlord will be entitled to a compensation of an amount equal to eighteen installments of the current rent at the time of termination of the renting if before one year since its termination, any person begins to practice in the premises the same activity or an activity akin to the one practiced. It will be considered as akin activities those that are typically suitable to benefit, though it is only partly, from the customers attracted by the activity practiced by the tenant.

After the termination of the renting contract as provided in the preceding paragraphs, the tenant will have preferential right to continue in the rented premises if the landlord wanted to execute a Costa Luz Lawyers C/ Ancha 30, 3º - 11201 Algeciras - (t) +34 956.092.687 - (f) +34 956.092.697 mldecastro@costaluzlawyers.es – marialuisa@costaluzlawyers.es

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new contract with a different tenant within one year since the legal termination of the renting.

For this purpose, the landlord will have to irrefutably notify the tenant its intention to enter into a new renting contract, the offered rent, the essential conditions of the contract and the name, address and circumstances of the new tenant.

The preferential right to continue in the rented premises in accordance with the offered terms will have to be exercised by the tenant within thirty calendar days since the day following the notification, proceeding in this period of time to the signing of the contract.

The landlord, after thirty calendar days since the notification without the signing by the tenant of the proposed renting contract, will have to execute the new renting contract within one hundred and twenty calendar days since the notification to the tenant whose contract was terminated.

If the landlord had not done the notification or omitted in it any of the requirements or it was different the agreed rent, the person of the new tenant or other essential conditions of the contract, the tenant whose contract is terminated is entitled to subrogation, by law, in the new renting contract within sixty calendar days since the landlord irrefutably sent him a certified copy of the new contract, being entitled to bring suit for eviction by the procedure established for the prosecution of the right of repurchase action.

The landlord will have to send to the tenant whose contract had been terminated, a copy of the new contract executed one year after its termination, within fifteen days since its execution.

The exercise of this preferential right is incompatible with the reception of the compensation provided in the previous section.

The tenant will be allowed to choose between both of them.

This transitional provision will be applied to the renting contracts of pharmacy premises signed before May 9, 1985 and still surviving December 31, 1999.

Fourth. Assimilated renting contracts executed before May 9, 1985 1.The renting contracts assimilated to those of tenancy referred to in Article 4.2 of the consolidated Urban Renting Act 1964 and those assimilated to those of business premises referred to in Article 5.2 of the same law, executed before May 9, 1985 and still surviving in the entry into force of this Act, will go on being governed by the rules of Costa Luz Lawyers C/ Ancha 30, 3º - 11201 Algeciras - (t) +34 956.092.687 - (f) +34 956.092.697 mldecastro@costaluzlawyers.es – marialuisa@costaluzlawyers.es

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the abovementioned Consolidated Text that are applicable to them, except the modifications contained in the following sections of this transitional provision.

2. The renting assimilated to tenancy will be governed by the provisions of the third transitional provision. For this purpose, the contracts executed by the Catholic Church and by nonprofit organizations, will be compared to those mentioned in the 2nd rule paragraph 4 with a termination period of fifteen years. The rest will be compared to those mentioned in the 2nd rule with a termination period of ten years.

3. The renting assimilated to those of business premises will be governed by the provisions of the third transitional provision for the renting of premises referred to in rule 2nd paragraph 4 to which it corresponds a fee superior to 190,000 pesetas.

4. The renting of urban properties in which professional activities are carried out will be governed by the provisions of the preceding paragraph.

Fifth. Public housings renting Public housings Renting surviving at the entry into force of this Act will go on being governed by the rules under which they were being governed.

Sixth. Court Proceedings 1.Title V of this Act will be applicable to lawsuits relating to renting of urban property surviving at the date of entry into force of this Act. 2. It is excepted what it is established about the value of the claim and the consent of the sentences, which it will be immediately applicable to appeals in the lawsuits about renting contracts of business premises in which the Provincial Court judgment has been pronounced after the entry into force of this Act.

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DEROGATING PROVISION. Single. Derogating provisions Without prejudice to the transitional provisions of this Act, Decree 4104/1964 of 24 December, by which it is approved the Consolidated Text of the Urban Renting Act 1964, Articles 8 and 9 of the Royal Decree-Law 2/1985, April 30, on Economic Policy measures, and any other provision of equal or lower rank that opposes to the provisions of this Act are derogated.

It is also derogated the Decree of March 11, 1949. This derogation will produce its effect in the geographical limits of every Autonomous Community when the provisions referred to in the third additional provision of this Act are enacted.

FINAL PROVISIONS. First. Nature of the Law This Act is enacted under Article 149.1.8 of the Constitution.

Second. Entry into force This Act will enter into force in January 1, 1995.

Paragraph 3 of the second transitional provision will enter into force the day following the publication of this Law in the "Official Gazette of the State".

The transfers of business premises carried out since the date specified in the preceding paragraph will be deemed carried out since the entry into force of the Law. Third. Publication by the Government of the Consumer Price Indices referred to in this Act The Government, within one month since the entry into force of this Act, will publish in the "Official Gazette of the State" a list of the Consumer Price Indices since 1954 until the entry into force of it.

Once the list referred to in the preceding paragraph is published, the National Statistics Institute, when announcing monthly the successive Costa Luz Lawyers C/ Ancha 30, 3º - 11201 Algeciras - (t) +34 956.092.687 - (f) +34 956.092.697 mldecastro@costaluzlawyers.es – marialuisa@costaluzlawyers.es

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modifications of the Consumer Price Index, will also certify the variation of the proportion with 1954 base index.

Fourth. Via fiscal compensations The Government, one year after the entry into force of the Act, will present a bill to the Parliament about a system of tax benefits to compensate the landlords, in those contracts executed before May 9, 1985 surviving in the entry into force of the Act, whilst the contract remains into force, when such landlords are not entitled to a revision of the contract rent because of application of the 7th rule paragraph 11 of the second transitional provision of this Act.

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