SPAIN Law and Practice Contributed by: Marta González-Llera, Toni Barios, Jorge del Castillo and Rafael Baena, Cases & Lacambra
1. General 1.1 Main Sources of Law The main sources of real estate law in Spain include: • the Spanish Civil Code or equivalent regional legislation ( legislación foral ); • Act 49/1960, of 21 July, on Horizontal Division (special condominium regime applicable to buildings); • Act 29/1994, of 24 November, on Urban Leases; • Decree of 8 February 1946, on the Mortgage Act; • Decree of 14 February 1947, on Mortgage Regulation; • Royal Legislative Decree 7/2015, of 30 Octo - ber, on the Land Act; • Act 38/1999, of 5 November, on Building Development (LOE); and • Act 12/2023, of 24 May, on the Right to Hous - ing. The autonomous regions have competencies in territorial and urban planning, as well as housing. Zoning, however, falls under the jurisdiction of the municipalities. 1.2 Main Market Trends and Deals For the real estate market, after a 2022 marked by strong growth in residential property prices, 2023 has seen a slowdown in activity, with a decline in the number of transactions and an increase in prices overall. In addition, the real estate market has grown strongly on the back of development in the hospitality and logistics sectors, as a complement to residential assets. Some of the most relevant transactions execut - ed during 2023 were:
• the sale and purchase of a 17-hotel portfolio owned by Equity Inmuebles, SL to the Abu Dhabi Investment Authority – EUR600 million; • the sale and purchase of a 70-building port - folio owned by WP Carey to the Junta de Andalucia – EUR328 million; and • the sale and purchase of the hotels and club branded as “Pacha” in Ibiza owned by Trilantic Capital Partners to Five Holdings – EUR320 million. The economic repercussions of the conflict in Ukraine, such as increased interest rates, infla - tion, rising construction and energy costs, etc, have prompted significant regulatory activity in Spain’s real estate market throughout 2023, par - ticularly regarding residential rental properties. Of particular note in this regard are: • the restriction on annual rent adjustments for residential rental contracts, which remained in effect throughout 2023 as per the provi - sions of Royal Decree-Law 6/2022, dated 29 March; and • Act 12/2023, which passed on 24 May, concerning the right to housing, and which introduces several interventionist measures in the rental market aimed at curbing residential rent in Spain. Several additional trends have been observed in the Spanish real estate market: • Property repurposing – in response to chang - ing market demands, underutilised commer - cial office spaces has been repurposed into residential properties, mixed-use develop - ments or co-living spaces, reflecting evolving lifestyle preferences and work dynamics. • Financial diversification – the real estate market has expanded beyond traditional bank financing to explore a range of alternative
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