The API association of real estate agents in the Balearics says that property owners are becoming increasingly concerned that they might rent out to 'tenant-squatters', people who pay a couple of months' rent and then stop paying it. The association's Natalia Bueno points out that these people are taking advantage of a situation permitted by Spain's housing law.
This is despite the fact that some legal opinion argues that a fraud under the Penal Code is being committed. Rental contracts now being drawn up, explains Bueno, include a clause stating that the landlord reserves the right to pursue relevant legal actions if the tenant stops paying the rent.
The possibility of this situation arising is a reason why owners, if they rent out at all, are opting for seasonal rents, e.g. a few months over the summer to workers in Mallorca temporarily.
They are also taking out insurance against the risks of non-payment and squatting. Or they simply decide to sell the property.
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Whilst this is absolutely true, it leaves you feeling equally sad for legal renters and landlords alike. The law protects squatters and the gangs that use them to ‘take possession’ of properties, so that they can benefit from ‘removing’ the squatter issue … for a tidy sum. A child could have worked out the consequence of the law. But here’s an idea - reform it??? It will benefit the legal folk, while removing the protection for criminals. Oh, and it will easy the problem of lack of rental properties on the island. Not exactly rocket science.
Hand all the occupation rights in law to tenants and naturally landlords are going to retreat and retrench from the market. It's not rocket science. This is why socialist governments should never get involved in laws and regulations for commercial markets since they don't have the first clue of how they work or what they need to thrive. Now the law has to be repealed and maybe some landlords will re-enter the market. But it's a long shot as many will be nervous that another change of mind could hand their tenants all the rights again, overnight. Many landlords just won't take the risk. The damage has been done and it will take a very long time to turn this tanker around. BTW, I was told (and haven't verified this) that there is actually a handbook in circulation which instructs would-be tenants how to recognise properties suitable for squatting and then how to enforce their rights (!!!) as a squatter. Apparently the book was written with "official" cooperation! I wouldn't be surprised.