ANDORRA Law and Practice Contributed by: Elena Redondo, Albert Hinojosa and Marc Ambrós, Cases & Lacambra
action for more than six months during the year; • subleases or transfers totally or partially the leased asset without prior consent from the landlord; • causes harm to the leased asset due to wilful misconduct or gross negligence, or carries out construction works that alter the struc - tural configuration of the leased asset or its common elements; • breaches the essential conditions of the lease agreement (or breaches the conditions spe - cifically determined as being essential in the lease agreement); or • carries out notoriously immoral, dangerous, annoying or insalubrious activities within the leased asset or when such activities affect the leased asset’s common elements. Furthermore, any activity other than residential use shall require correspondent authorisation from the competent authority ( Comú ). 6.13 Tenant’s Ability to Alter and Improve Real Estate Within limits provided for in 6.12 Restrictions on the Use of Real Estate , the tenant may alter or improve the leased asset by carrying out repairs needed due to deterioration through normal or abnormal use. The Urban Rents Law of 30 June 1999 ( Llei d’arrendaments de finques urbanes ) does not thoroughly regulate the introduction of improve - ments to the leased asset by the tenant. Thus, there is no obstacle to the tenant introducing improvements to the leased asset, usually sub - ject to the landlord’s consent. Upon the termination of the lease agreement, the tenant is entitled to revert the improvement
works introduced to the leased asset if it can do so without causing harm to the asset. The minimum legal term for commercial leases is four years. However, if the tenant carries out improvement works that result in a cost exceed - ing the equivalent of three years’ rent, they have the right to require an extended lease term of up to seven years. In this situation, the landlord is obliged to accept this extension. 6.14 Specific Regulations There are no specific regulations and/or laws that apply to leases of particular categories of real estate, such as residential, industrial, offic - es, retail or hotels, other than the Urban Rents Law, which provides the common regime for residential and commercial leases. 6.15 Effect of the Tenant’s Insolvency The Urban Rents Law does not expressly pro - vide for insolvency as a termination cause for lease agreements but states that a default in rent payment by the tenant constitutes a termination cause in favour of the landlord. However, a declaration of insolvency is not suf - ficient in itself as a termination cause for the specific lease agreement in case the insolvency situation of the tenant is rapidly reversed. Gener - ally, Andorran courts may refuse to uphold the termination of a contract based on a breach of obligations, undertakings or covenants, or on a change in circumstances that is merely acces - sory or complementary to the main undertak - ings, or based on an unreasonable, inequitable or bad faith interpretation of one of the events of default or changes in circumstance.
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