How to Sell a Rented Apartment: Step-by-Step Guide Without Legal Problems
Did you know that selling a rented apartment is a completely legal and viable operation in Spain?
In fact, many owners are choosing to sell their rented apartments, especially to investors looking for properties with tenants. However, it is essential to know that since 2019, the Urban Leasing Law (LAU) establishes specific protections: minimum contracts of 5 years for individual owners and 7 years for companies.
Furthermore, the process requires considering several important legal aspects, such as the tenant's right of first refusal and the obligation to notify the sale at least 30 days in advance. In this guide, we will explain step by step how to sell a rented apartment safely and without legal problems, respecting both your rights as an owner and those of the tenant.
Basic Legal Aspects of the Sale
The Urban Leasing Law (LAU) establishes the legal framework for the sale of rented properties in Spain. Let's analyze the fundamental aspects we must consider.
Can a rented apartment be sold?
Indeed, the sale of a property with a current lease agreement is a common practice in the Spanish real estate market. Article 14 of the LAU, modified by Royal Decree-Law 7/2019, establishes that the lease will continue even after the sale.
However, it is essential to understand that, although the apartment is rented, the right of ownership allows its sale. This situation can be especially attractive for investors looking for properties with tenants, as it guarantees a constant flow of income from day one.
Tenant's rights
Tenants enjoy specific protections during the sales process:
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Right of permanence: The tenant can continue in the dwelling until the contract ends, even after the sale. The new owner must respect all the agreed conditions.
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Preferential acquisition right: Composed of:
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Right of first refusal: 30 calendar days to match the purchase offer
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Right of withdrawal: Applicable if the sale was not properly notified
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Furthermore, the owner cannot force the tenant to leave the property until the contract expires. The new owner must maintain the same rental conditions, including the price and duration of the contract.
Necessary documentation
To carry out a successful sale of a rented apartment, the following is required:
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Formal notification: Document that communicates to the tenant the intention to sell, including:
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Exact price and payment method
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Essential conditions of the sale
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Prior encumbrances of the property
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Lease agreement: Must be up to date and specify if there is a waiver of the right of first refusal and withdrawal
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Security deposit documentation: The buyer will need:
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Proof of deposit at INCASOL
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Documents for updating ownership
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Consequently, although the process may seem complex, by following these legal requirements and respecting the rights of all parties involved, the sale of a rented apartment can be carried out successfully and without legal setbacks.
Preparing the Apartment for Sale
The proper preparation of a rented apartment for sale requires a strategic approach that maximizes its value in the market.
Evaluation of the current state
Before starting the sales process, it is essential to conduct a detailed inspection of the property. During this evaluation, we must consider that the valuation of the apartment will be affected by its rented condition.
To obtain an accurate appraisal, we will need:
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The current lease agreement
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The last rent payment receipt
It is important to note that the valuation of a rented dwelling is calculated mainly based on the income generated during the established period for its use. Therefore, the higher the rental profitability, the better valuation the property will obtain in the market.
Profitable improvements
When considering improvements, we must distinguish between two types of works according to the Treasury:
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Improvement works: Those that increase the value of the dwelling
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Installation of air conditioning
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Improvements in insulation
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Replacement of elements with superior versions
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Maintenance works: Intended to repair deteriorated elements
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Painting
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Basic repairs
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Replacement of damaged elements
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Improvement works can be deducted when selling the house, while maintenance expenses cannot. Consequently, it is strategic to prioritize improvements that increase the value of the property.
For potential investors, aspects such as the current tenant's payment history and the existence of a non-payment insurance without open claims can positively influence the sale value. Likewise, the remaining time of the lease agreement also affects the valuation: the shorter this period, the higher the value, as it will allow the investor to establish new conditions.
In the case of properties intended for investors, they will pay special attention to current expenses such as IBI and community fees. For example, the presence of services such as concierge, although it could be attractive to individual buyers, can penalize the sale price due to its impact on net profitability.
Communication with the Tenant
Effective communication with the tenant makes the difference between a successful sale and a problematic process.
How to notify the sale
The first fundamental step is to formally notify the tenant of the intention to sell. This communication must be made by burofax or certified mail, with a minimum of 30 days before the planned date of sale.
The notification must include:
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Established sale price
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Essential conditions of the transfer
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Planned date for formalization
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Registration status of the property
Furthermore, it is advisable to keep the tenant informed about the progress in the negotiations. This transparency generates an environment of trust and facilitates the sales process.
Negotiation of visits
Although the owner has the right to sell, they cannot access the dwelling without the tenant's authorization. Therefore, the coordination of visits requires a prior agreement, unless there is a specific clause in the lease agreement that allows it.
To manage visits effectively:
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Establish a schedule that respects the tenant's hours
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Agree on the duration and frequency of visits
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Notify each scheduled visit in advance
Management of purchase offers
During the sales process, it is essential to maintain fluid communication with both the tenant and potential buyers. The seller must:
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Inform the buyer about the existence of the current lease agreement
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Provide details about:
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Tenant's payment history
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Current contract conditions
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Remaining lease duration
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Likewise, when a formal offer is received, the owner must notify the tenant of the exact conditions, allowing them to exercise their right of first refusal if they so wish. This right expires 180 calendar days from the notification.
The professional management of these communications minimizes conflicts and facilitates a satisfactory transaction for all parties involved.
Step-by-Step Sales Process
The sales process of a rented apartment requires a meticulous strategy to guarantee the success of the operation.
Price setting
To establish a competitive price, we must consider the current rental profitability. The basic formula to calculate net profitability is:
Profitability = (Annual rent - Annual expenses) / Housing price
For example, with a monthly rent of 900 euros (10,800 annually) and expenses of 3,000 euros annually, an attractive price for investors would be around 156,000 euros, generating a profitability of 5%.
Furthermore, the remaining time of the lease agreement significantly influences the valuation. A shorter period is usually more attractive to buyers, as it allows them to establish new conditions.
Specific marketing
The marketing of a rented apartment differs from a traditional sale. Mainly, there are two approaches:
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Direct sale: Personal management of marketing and negotiations
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Real estate agency: Professionals who handle the entire process, including:
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Specialized promotion
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Document management
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Communication with tenants
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The average sales time ranges between 3 and 6 months, depending on factors such as local demand and market conditions.
Closing the operation
During the final phase, it is essential to:
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Verify that the tenant has formally waived their preferential purchase right before a notary
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Ensure that the purchase agreement includes specific clauses about the current lease
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Document the transfer of the security deposit and update the ownership in the corresponding registries
If the final price differs from the one initially communicated to the tenant, we must notify them again, granting them another 30-day period to exercise their purchase right. Likewise, the purchase deed must prove that the sale has been duly communicated to the tenant.
Finally, the effects of the sale notification expire 180 calendar days. If the operation is not completed within this period, we must restart the notification process.
Conclusion
The sale of a rented apartment represents a completely viable operation when executed following the correct steps. The rights of both the owner and the tenant are protected by the Urban Leasing Law, establishing a clear legal framework for these transactions.
Certainly, the success of the sale depends on several key factors: transparent communication with the tenant, proper valuation of the property considering its rented condition, and rigorous compliance with the established legal deadlines. Accurate documentation and timely notifications are fundamental elements to avoid subsequent complications.
The current market offers significant opportunities for this type of operation, especially among investors looking for properties with established tenants. However, it is essential to maintain a balance between commercial interests and legal obligations towards the tenant.
Finally, let's remember that each step of the process, from the initial evaluation to the closing of the operation, must be executed with attention to detail and respect for the rights of all parties involved. This will guarantee a successful and legally trouble-free transaction.
FAQs
Is it possible to sell an apartment that is rented? Yes, it is completely legal to sell a rented apartment in Spain. However, it is important to notify the tenant at least 30 days in advance and respect their rights, such as the right of preferential acquisition.
What rights does the tenant have when the apartment is sold? The tenant has the right to remain in the dwelling until their contract ends, even after the sale. They also have the right of first refusal and withdrawal, which means they can match the purchase offer within 30 calendar days.
How should the tenant be notified of the intention to sell? The notification must be made formally by burofax or certified mail, including the sale price, the essential conditions of the transfer, the planned date for formalization, and the registration status of the property.
How does the rent affect the sale price of the apartment? The sale price of a rented apartment is influenced by factors such as the current rental profitability, the remaining time of the contract, and the expenses associated with the property. Generally, the higher the profitability and the shorter the remaining contract time, the more attractive it will be to investors.
What documentation is necessary to sell a rented apartment? The updated lease agreement, the security deposit documentation, a formal notification of the intention to sell to the tenant, and in the final phase, the tenant's formal waiver of their preferential purchase right before a notary are required.
