After the Spanish Civil War (1936-1939), under Francisco Franco’s dictatorship, housing protection became a key political issue for ideological and economic reasons. Measures were taken in favor of tenants’ interests. In particular, the 1939 Housing Protection Act7 (Ley de protection de vivienda, 1939) and the 1946 Urban Tenancy Act instituted the blocking of rents and made eviction process difficult.8 While inflation rose, these rents progressively turned out to be insufficient to ensure the maintenance of the houses, and contracts established under this regulation became unprofitable for landlords. As a consequence, construction-related investments sharply decreased and the existing buildings deteriorated. In 1954, the Low Cost Housing Act (Ley de Vivienda de Renta Limitada) was a first attempt to incentivize private investments in housing construction. However, it failed in preventing housing shortage, which resulted from intense migration flows from rural to urban areas. In order to prevent the buildings from further deterioration and to stimulate the rental market, legal measures were taken in the 50’s, which allowed permanent tenants to purchase at somewhat interesting prices the dwellings they were renting.10 After a period of sales under those conditions, the 1960 Horizontal Property Act11 (Ley de Propiedad Horizontal) set the legal scene for investments in new buildings to be sold by separate flats and apartments.

In conjunction with a set of other reasons (such as rural exodus, laxity in urban regulations, bursting inflation that made mortgages easier to pay), this period marked the beginning of a home ownership trend in Spanish society that would only intensify afterwards. The Urban Tenancy Act12 of 1964 introduced limited changes to the legal system as regards renting and it mostly maintained the protection of tenants’ interests. Limited increases in rent were authorized, but the latter remained somehow very low. Many disputes were caused by indefinite lease renewals13 and by the tenancy transfer possibility (both inter vivo and mortis causa). Rental agreements had no renewal limits and tenant’s heirs could succeed tenant’s rights. In those conditions, rental offer remained low, and there were few new opportunities for tenants to rent an appropriate dwelling. It should be noted that with the Spanish Constitution of 1978, the Spanish society witnessed the beginning of a democratic period, hence article 47 states that “All Spaniards have the right to enjoy decent and adequate housing. The public authorities shall promote the conditions necessary and establish the pertinent norms to make this right effective, regulating the use of land in accordance with the general interest to prevent speculation. The community shall share in the increased values generated by urban activities of public bodies.

Nowadays, in Spain, three different situations co-exist as far as private tenancy contracts are concerned. The first situation corresponds to contracts established before the 1985 Boyer Decree. They are characterized by low rents – and even “anti-economic” rents for contracts concluded before 1964, because rents were blocked. These contracts mainly concern retired elderly people with relatively low incomes, although in some cases heirs have benefited from the contract via delegation of rights, and have maintained them on the basis of the indefinite lease renewal allowed by the 1964 Act. It should be noted that blocked rents and indefinite lease renewal issues are taken into account by the 1994 Act, which contemplates their progressive adaptation to the current legislative framework, always ensuring an appropriate and differentiated treatment to the concerned tenants.24 The second category of tenancy contracts corresponds to the ones concluded after the 1985 Boyer Decree, and is characterized by relatively high rents. Finally, the third category includes all tenancy contracts established under the 1994 Act. The central rules are detailed in part B of the introduction.