SPAIN Law and Practice Contributed by: Marta González-Llera, Toni Barios, Jorge del Castillo and Rafael Baena, Cases & Lacambra
sometimes, auditing be carried out. These requirements depend on the type of entity. An SL and an SA are obliged to keep accounting records of their business activities. In this regard, entities should register their annual accounts before the Commercial Registry. It is mandatory for some capital companies to audit their annual accounts when they exceed the regulatory limits. 6. Commercial Leases 6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time Some rights established in the Spanish regula - tion allow the use of a property without owner - ship: • A lease ( arrendamiento ) – one of the parties, the landlord, undertakes to provide to the other, the tenant, the use of a property for a certain period of time and price. The law dis - tinguishes between urban leases, which may be dwelling or residential leases (“dwelling- use lease”) and non-dwelling or commercial leases (“commercial lease”), and rural leases. Furthermore, seasonal lease agreements are expressly excluded as urban leases and gov - erned by regional and local specific legisla - tion. • Right of usufruct ( usufructo ) – entitles the beneficiary to use and obtain benefit of a property owned by a third party, the bare owner, in exchange for a price and for a lim - ited time. • Use and habitation ( uso y habitación ) – enti - tles a person to receive and use a property belonging to a third person.
• Surface right ( derecho de superficie ) – like common law, separates land ownership from the right over the construction. The right entitles its owner to build on third parties’ land, taking ownership of what has been built for a certain period (which may not exceed 99 years). 6.2 Types of Commercial Leases In a commercial lease, a landlord rents a proper - ty to a tenant to perform a business or economic activity. The leases are governed by the principle of freedom of contract, with the exception that the rent guarantee shall be at least equal to two months’ rent. In the absence of an agreement, the leases are governed by the Title II of the Urban Lease Act and, subsidiarily, by the Spanish Civil Code. 6.3 Regulation of Rents or Lease Terms In general, parties may freely agree on the rent and terms of lease agreements. However, the Urban Lease Act establishes a few mandatory provisions. Urban Lease Act Residential leases’ minimum period For residential leases entered after March 2019, the landlord must allow the lease to be extended for up to a minimum of five years if the landlord is an individual, or seven years if it is a legal entity. The parties may freely agree on the duration of a commercial lease. Rental guarantee It is compulsory to require and provide a cash deposit equivalent to one month’s rent for resi - dential leases and two months’ rent for com - mercial leases.
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