Required Disclosures for Madrid Landlords

Since the commencement of the Spanish Urban Leases Act (Ley de Arrendamientos Urbanos - LAU) on 1 January 1995, landlords in Madrid have been required to adhere to strict transparency standards regarding property condition and costs. Understanding these Required Disclosures is vital for maintaining legal compliance in the Community of Madrid.

The Legal Landscape of Madrid

In the Community of Madrid, transparency in the rental process is mandated by a combination of national laws (like the LAU) and specific regional administrative requirements. Landlords are legally obligated to provide a specific set of disclosures and certifications to tenants before or at the time of signing the lease agreement. The most prominent of these is the Energy Performance Certificate (Certificado de Eficiencia Energética - CEE), as required by Royal Decree 390/2021. Under Article 17, landlords must include the energy label in any property advertisement and provide a copy of the valid certificate to the tenant upon signing the lease. This document informs the tenant of the property’s energy consumption and CO2 emission levels. Failure to provide a valid CEE is a serious administrative infraction and can result in significant fines.

Furthermore, following the enactment of the Ley 12/2023 por el Derecho a la Vivienda, landlords must navigate new rules regarding their status as a "Large Property Owner" (Gran Tenedor). While Ley 12/2023 amended the LAU, the specific disclosure obligations regarding 'Gran Tenedor' status—defined as owning more than 10 residential properties (or 5 or more in stressed zones if designated by the regional government)—affect rent indexation caps and mandate mediation before certain legal actions.

Another essential disclosure in Madrid involves the transparency of operating expenses passed to the tenant. Under Article 20.1 of the LAU, if the landlord intends to charge the tenant for the IBI (Impuesto sobre Bienes Inmuebles) or Community Fees, these must be explicitly detailed in the written contract, including their exact annual amounts at the date of signing. Additionally, per Article 20.1 of the LAU (as amended by Ley 12/2023), real estate management and contract formalization fees are strictly the responsibility of the landlord in residential leases. Finally, landlords in Madrid must provide proof of the mandatory security deposit registration with the Agencia de Vivienda Social de la Comunidad de Madrid within 30 business days of signing, as required by Ley 12/1997. This receipt is essential for the tenant’s personal income tax deductions and serves as primary evidence of administrative compliance.