Duration and Penalties of Housing Contracts (Balearics)

Formalizing a primary residence contract in the Balearic Islands subjects you to the strict tenant protection guidelines of the Spanish Urban Leases Act (LAU). Any attempt by a landlord to limit these rights through abusive clauses will result in their judicial nullity (the clause is considered "unwritten").

1. Tenant Protection: Mandatory Extensions (5 and 7 Years)

For primary residence leases in the archipelago, the law establishes a system of mandatory extensions that prevents the landlord from reclaiming the property at will during the initial years:

• Even if you sign a lease for only "12 months," the tenant has the right to extend it annually.
• 5-Year Minimum: If the landlord is an individual (persona física), the tenant can stay in the property for up to 5 years.
• 7-Year Minimum: If the landlord is a corporate entity (persona jurídica), the mandatory protection period increases to 7 years.
• Tacit Renewal: After the 5 or 7 years, if neither party notifies the other of their intention not to renew, the contract is automatically extended for another 3 years. To prevent this, the landlord must give the tenant 4 months' notice before the end of the term.

2. Premature Termination: The Right to Withdraw

The LAU protects the tenant's right to leave the property before the agreed term ends, subject to the following conditions:

• Right of Withdrawal: The tenant can withdraw from the contract after the first 6 months, provided they give the landlord at least 30 days' notice.
• Permitted Penalty: The only compensation a landlord can legally demand (and only if explicitly stated in the contract) is one month's rent for each remaining year of the contract. Periods shorter than a year result in a pro-rated penalty. If the contract does not explicitly include this penalty clause, the tenant can leave after 6 months without paying any compensation.

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