PROTECTION OF THE TENANT FROM MORTGAGE EXECUTION
If the owner of a property does not pay the mortgage, the bank has the right to execute the mortgage, which usually entails the public sales of the property. A common situation is that the house is rented out to a third party. The tenant has nothing to do with the payment obligation of the owner but is caught in the dispute between the bank and the owner, in which the tenant may still pay the price and lose the rental protection.
As a solution to this problem, the Spanish legislator made a legislative change in 2019 (RD-ley 7/2019, de 1 de marzo), which applies to all leases signed on or after March 6, 2019. Prior to this change of law, tenants were not protected from being evicted during the mortgage execution. When the bank publicly sold the house, the new owners (mostly the bank) could force the tenants to leave the property. With the public sale of the property, the tenant lost the rental protection and the lease was terminated. This is still the case for the leases that are valid today and signed before March 6, 2019.
Today, all lease contracts signed on or after March 6, 2019 are protected by the legislator for the duration of the contract.
This means that the contract must be honored for five years – or seven years when the landlord is a company – from the time the lease is signed. Until the end of this period, only the tenant may unilaterally terminate the rent. It does not matter whether the contract is signed for one or two years. The five – or seven – year term specified in law is both a minimum and a maximum.
When the house is transferred to the bank or to a third party, the tenant must continue to pay the rent, as stipulated in the contract. In the first instance, the landlord must be paid until the new owner reveals himself and indicates that the tenant must pay him from that moment on.
Selena Escandell Beutick