Property Law

Is it legal to put 1 year as a term in a rental contract?

Rent a property

Yes, it is. Lack of knowledge of the law and the complexity of rental contracts often mean that tenants are unclear about important details such as the minimum and maximum duration of their lease. The answer varies depending on the type of tenant and the purpose of the property.

Minimum duration and extensions
The duration of the lease is freely agreed by the parties. However, according to the Urban Leases Law (LAU), the lessor is obliged to extend the contract for a minimum of five years in annual installments in the case of a natural person, and seven years in the case of a legal entity. After this time, if neither of the parties has notified the other of its intention not to renew it, the contract will be extended by annual installments up to a maximum of three more years.

The landlord must give at least four months’ notice prior to the expiration date before the automatic extension of this maximum of three additional years applies, and the tenant must give at least two months’ notice. However, from the first to the fifth or seventh year, the tenant may stop these automatic extensions if, one month prior to the expiration date of any of the annuities, the tenant expresses its will not to renew the lease.

Maximum duration and minimum term:

Contrary to the minimum duration, the law does not set a maximum term. In the case of the minimum permanence, the LAU establishes that the minimum permanence of the tenant must be six months. If the contract has a clause indicating a longer period (generally one year), it will be considered null and void. The law states that the tenant can terminate the contract after six months by giving 30 days’ notice and not 60 (two months), as some contracts stipulate.

As we can see, the extension is mandatory, so before signing a rental contract it is highly recommended that you come to our office for advice, whether you are the owner or the tenant.

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