Renovations in lieu of rent in Spanish tenancy law

AuthorRosa M. Garcia-Teruel
Publication Date09 Jul 2018
Renovations in lieu of rent in
Spanish tenancy law
Rosa M. Garcia-Teruel
Department of Private, Procedural and Tax Law, UNESCO Housing Chair,
Universitat Rovira i Virgili, Tarragona, Spain
Purpose In the context of difcultiesin access to housing, the Spanish Act 4/2013 introduced a new article
17.5 into the Act on Urban Leases 1994 (LAU). This paper regulatesthe so-called renovations in lieu of rent
on por renta), that is to say, a tenancy contractin which the tenant does not pay the rent in money
but by performing renovationworks in the same rented dwelling. The purpose of this paper is to analysethe
legal regimeof renovations in lieu of rent and how this schemeworks.
Design/methodology/approach Renovations in lieu of rent, by its own nature,allow a tenant with
building skills to access affordable housing. However, due to the new regulation of this tenancy contract,
which is onlyincluded in Paragraph 5 of art. 17 LAU, some problemsmay arise from a legal perspective.
Findings This paper approachesthe compatibility of this scheme with the LAU, detectsits problems and
proposeslegal improvements.
Originality/value This paper explores the application of renovations in lieu of rent and determines
whether this new scheme,according to the current regulation, may representa true residential alternative for
vulnerablepeople or if legislative reform is needed to promote its use.
Keywords Housing, Spain, Renovations, Construction, Tenancy, Tenures
Paper type Research paper
1. Introduction
Ten years after the housing bubbleburst and the housing crisis, which began in 2007, access
to affordable housing is still a concern for many that, in that period, lost their dwellings[1],
and for those (predominantly young people) that currently have signicant difculties
gaining access to housing.
Rented housing is not yet a real alternative to homeownership in Spain, representing,
even today, the form of housing tenure held by only 13.8 per cent of the population
(Eurostat, 2016a).Two of the main reasons that contribute to this are the following:
(1) The average rent is more expensive than the average mortgage instalment (but, in
this last case, savings are needed, which is not possible for all households)[2], and
rental prices have been constantly increasing over recent years (more than 9 per
cent in the period 2016-2017[3]). Thus, the rental market is not affordable enough
for low-income households, who, at the same time, cannot access social housing
due to its scarcity (Lambea, 2016).
(2) Rented housing is generally in worst condition than homes available for sale
(Kemp, 2011). Apart from that, the Spanish housing stock is not in proper state of
repair and, as a consequence, there is a lack of available and suitable properties.
This paper was made possible owing to the participation of the author in the Project of the Spanish
Ministry of Economy Reforming housing tenures(DER2014-55033-C3-1-O) and to the position
granted by the Agency for Management of University and Research Grants under call FI-DGR 2015.
Received16 February 2018
Revised30 April 2018
Accepted9 May 2018
Journalof Property, Planning and
Vol.10 No. 2, 2018
pp. 140-153
© Emerald Publishing Limited
DOI 10.1108/JPPEL-02-2018-0006
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