Foreclosure and lease of housing after the Royal Decrees Laws 21/2018 and 7/2019

Abstract

There are currently six different special legal regimes on urban leases, apart from the supplementary regime of the Civil Code. Although both the Urban Leases Act of 1964, and the Urban Leases Act of 1994 established an exception to the public registry faith for the benefit of unregistered housing leases, and the subsistence of the same, even produced the resolution of the landlord’s right as a result of a foreclosure (at least during a period of minimum legal validity), Law 4/2013, which reformed the Urban Leases Act of 1994, subjected housing leases to the general regime of registry advertising, so that, In case of voluntary alienation of the leased housing (art. 14 LAU) the lease registered prior to the transfer of the property was opposable to any third party (including the mortgage third party of article 34 of the Mortgage Law) and the non-registered lease no it hurt the latter. While the buyer was not a third party mortgage of articles 32 and 34 Mortgage Law, should be subrogated in the lease not registered for the period of mandatory legal extension. As for the resolution of the right of the lessor as a result of a foreclosure (art. 13 LAU), it determined the extinction of the lease, unless it was registered before the mortgage. As for the lease prior to the mortgage and not registered, the subsistence or not of the same depended on the qualification of it according to the purely formal principle of registry priority (art. 13 LAU and 17 LH), and the material principle of public registration faith (arts. 32 and 34 LH). The Royal Decree - Law 21/2018, not validated by the Congress of Deputies, and in force from December 19, 2018 until January 23, 2019, did not modify articles 13 and 14 of the Urban Leases Act of 1994, although it extends the period of compulsory legal extension (five years, or seven years if the lessor was a legal person) and of tacit extension (three years). The lease, therefore, remained subject to the general registry advertising regime. The Royal Decree - Law 7/2019 that was validated by the Permanent Delegation recovered the exception to the public faith of the registry in articles 13 and 14 of the Law of Urban Leases of 1994, so that the buyer or the buyer of the foreclosure backs the lease for the period of mandatory legal extension (five years, or seven years if the lessor is a legal person), thus providing greater stability to the lessee of non-luxurius homes.