The concept of a “large property holder” has gained popularity in Spain in recent years, primarily due to the increasing regulation of the rental housing market. This term refers to individuals or entities that own a significant number of properties intended for rent. It plays a central role in housing policies, as it aims to balance property owners’ rights with tenant protections and access to housing.

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With the approval of the Housing Law in 2023, new definitions have been established, along with a specific framework of rights and obligations for large property holders. In this article, we explain what it means to be a large property holder in Spain, how this category is determined, and the responsibilities it entails.

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What is a Large Property Holder?

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According to current legislation in Spain, a large property holder is defined as a natural or legal person who owns ten or more urban properties intended for rent, excluding garages and storage units. This definition also includes those who own over 1,500 square meters of residentially purposed constructed area. However, in some designated high-demand areas, individuals or entities with more than five properties in the same area are also considered large property holders.

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Rights of Large Property Holders

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1. Right to set rental prices. Although the Housing Law applies in some areas designated as “high-demand zones” to regulate rental prices, large property holders retain the right to set prices, provided they comply with the limits established by the law.

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2. Right to recover property. Large property holders may recover their properties upon the expiration of the lease agreement, provided the legal and contractual terms are respected.

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3. Right to receive compensation. In cases of exceptional regulations that restrict their rights, such as rental caps in high-demand areas, large property holders may request financial compensation from the state or relevant autonomous communities.

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Obligations of Large Property Holders

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1. Compliance with lease agreements. Large property holders must ensure that lease agreements are formalized in accordance with current legislation, including minimum terms and the conditions outlined in the Urban Lease Law (LAU).

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2. Offer of social housing in cases of vulnerability. In eviction situations due to non-payment, large property holders are required to offer social housing to individuals in vulnerable situations, provided they meet the legal requirements. In some regions, such as Catalonia, this obligation is explicitly established in regulations like Law 24/2015, which mandates that large property holders provide social housing before initiating eviction proceedings.

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3. Information and transparency. Large property holders are required to register and keep updated information about their properties, including rental conditions, in official state records.

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4. Compliance with regulations in high-demand zones. In designated “high-demand zones,” large property holders must adjust rental prices to the established limits and collaborate with local authorities to improve access to housing.

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Penalties for Non-Compliance

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Failure to comply with the established obligations can result in significant financial penalties. Fines for violations, such as the refusal to offer social housing when required, can reach substantial amounts depending on the severity of the infraction.

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The role of large property holders in Spain represents a key player in the rental housing market. Alongside their rights come responsibilities aimed at ensuring stability and accessibility in the housing market. Understanding these obligations not only allows large property holders to operate within the legal framework but also contributes to the development of a more equitable and sustainable market for all stakeholders involved.

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Additionally, thanks to digitalization and advancements in technology, large property holders now have access to tools that make property management easier, helping them oversee payments, resolve issues, and maintain direct communication with tenants efficiently.

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