In this article
Some of the most attractive prices on the market belong to properties that come with a complication: a sitting tenant, an occupant without a contract, or debts that follow the property. Buying property with tenants in Spain or with outstanding charges is not necessarily a bad decision, but you must understand the legal consequences before paying a deposit.
Buying a property with a tenant
The lease continues
Under the Spanish Urban Leases Act (LAU), a residential tenant with a valid contract generally keeps their rights when the property is sold. The buyer steps into the landlord’s position and must respect the lease until it ends, including the legal extension periods for primary residences.
The tenant’s right of first refusal
Residential tenants often have a right of first refusal (*derecho de tanteo*) and a right of redemption (*derecho de retracto*). If they are not properly notified of the sale and its conditions, they may be entitled to buy the property for the same price after completion. Some contracts waive this right, so the lease must be reviewed carefully.
What your lawyer checks
- The lease agreement, its duration and extensions.
- The rent, the deposit held and any debts of the tenant.
- Whether the right of first refusal was waived or must be offered.
- Whether the tenant intends to leave and on what terms.
Buying a property with occupants (squatters)
Illegally occupied properties, sometimes advertised at a large discount, carry a different risk. The buyer acquires the property with the occupants inside and must then start eviction proceedings, which can take months. Costs, time and the condition of the property must be priced in. Never pay a deposit for an occupied property without a clear legal plan.
Buying a property with debts
Mortgages and seizures
Registered mortgages and seizures appear in the Land Registry. They must be cancelled at completion, usually by paying the lender directly from the purchase price at the notary.
Community of owners fees
Community debts for the current year and the previous three years are attached to the property. The seller must provide a certificate from the community showing the debt position, and the notary will normally request it.
IBI (property tax)
Unpaid IBI can be claimed against the property. Your lawyer should check the latest receipts and the municipal tax records.
Utilities
Utility debts generally belong to the previous owner, but they can delay connecting services in your name.
Protecting yourself in the contract
- Make the deposit refundable if the property is not delivered free of tenants and occupants, unless you agree otherwise.
- Retain part of the price to cover any debts found.
- Require the seller to provide certificates of no debt from the community and the town hall.
- Set a clear delivery date for keys.
Our real estate lawyers negotiate these clauses routinely. Where disputes with tenants or occupants arise, our civil law team handles the proceedings.
Frequently asked questions
Can I evict the tenant once I buy?
Only if the lease has ended or a legal ground exists. Buying the property does not automatically terminate the lease.
Are bank-owned occupied properties a good deal?
They can be, but you must factor in eviction time and costs. Legal advice before bidding is essential.
What if a debt appears after completion?
If it was not disclosed, you may have a claim against the seller. Retentions agreed in the contract make recovery much easier.
Conclusion
Tenants, occupants and debts are not always deal-breakers, but they change the value and timing of a purchase. A clear legal assessment before the deposit lets you negotiate from a position of strength. Castell.law advises buyers across the Balearic Islands in English, German and Spanish.
