Commercial Disclosures in Madrid

Governed primarily by the Ley de Arrendamientos Urbanos (LAU), which has been effective since 1 January 1995, understanding the intricacies of commercial required disclosures in Madrid is essential for maintaining statutory compliance and ensuring the validity of lease agreements.

Essential Disclosure Obligations in Madrid

Transparency is the cornerstone of a secure commercial lease in Madrid. Under Spanish law, landlords have an obligation of "buena fe" (good faith) during negotiations, which translates into specific disclosure requirements. While the Ley de Arrendamientos Urbanos (LAU) is less prescriptive than residential law regarding disclosures, the Spanish Civil Code and various administrative regulations fill the gaps to ensure the tenant is fully informed about the property’s legal and physical status before committing to a lease.

One of the most critical disclosures is the Certificado de Eficiencia Energética (Energy Performance Certificate). Pursuant to Royal Decree 390/2021, landlords must show this certificate to prospective tenants and provide a copy once the lease is signed. Failure to do so can result in administrative fines from the Community of Madrid ranging from 300 to 6,000 euros. Additionally, the landlord must include the property’s referencia catastral—a mandatory alphanumeric identifier assigned by the General Directorate of the Cadastre—in the lease contract and all official documentation. The deposit of the 'fianza' (security deposit) is mandatory and must be placed with the Madrid Social Housing Agency (Agencia de Vivienda Social, formerly IVIMA) within 30 working days of signing, an obligation regulated by Ley 12/1997. Since the lease contract is required for the fianza deposit, the cadastral reference is indirectly necessary for the deposit process.

Liens, Encumbrances, and Technical Compliance

Furthermore, the landlord should disclose any "cargas o gravámenes" (liens or encumbrances) that might affect the tenant’s quiet enjoyment of the property. For example, if the building is subject to a mortgage with a clause restricting leases, this must be made clear. In the context of the Madrid municipality, the landlord should also confirm that the premises possess or are eligible for the necessary licenses, often handled via a "declaración responsable" for commercial activities. If a property is leased for a specific business use but cannot obtain the required license due to structural issues or zoning restrictions, the landlord may be held liable for damages or the contract may be rescinded. Disputes arising from these disclosures fall under the jurisdiction of the Juzgados de Primera Instancia de Madrid. Providing a clear "inventario" of fixtures and fittings is also a standard disclosure that protects both parties during the final handover of the premises.