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You can sell a Mallorca property with a sitting tenant, but the lease goes with it. Under Spain's Urban Leases Act, the buyer steps into your shoes as landlord, and in most cases the tenant must first be offered the chance to buy at the same price and on the same terms, with 30 calendar days to decide.
It is a situation we see more often than people expect. An owner let the apartment while working abroad, or bought a second home as an investment, and now wants to sell while a long-term tenant is still living there. Nothing about the tenant stops the sale, but it changes who will buy, how the paperwork runs and, often, the price. Here is how it works in practice.
Which Rules Apply
This article is about long-term residential lets, where the tenant lives in the property as their home. These are governed by the Ley de Arrendamientos Urbanos (LAU), the Urban Leases Act of 1994, as reformed in 2013 and again in March 2019.
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Holiday lets to tourists are a different matter. Short tourist stays are excluded from the LAU and regulated separately under tourism law, so a property let to holidaymakers can be sold without any of the tenant rights described below. If your property is let month by month to the same person who lives there, it is almost certainly a residential lease, whatever the contract is called.
What Happens to the Lease When You Sell
Article 14 of the LAU is clear: the buyer of a let home takes over the landlord's rights and obligations. For leases signed since 6 March 2019, the buyer is bound for at least the first five years of the contract, or seven years if the original landlord was a company. This applies even if the lease was never recorded at the Land Registry.
In practical terms, that means:
- The tenant stays, on the same rent and the same terms.
- The buyer collects the rent from completion and becomes responsible for repairs, the deposit and everything else a landlord handles.
- The sale does not end the lease, and the tenant does not have to sign anything to allow it.
Leases signed under earlier versions of the law follow slightly different rules on duration and on protection for the buyer, so the date of your contract matters. Your lawyer will check this first.
The Tenant's Right to Buy: Tanteo and Retracto
Article 25 of the LAU gives a residential tenant a preferential right to buy the home they rent. It works in two stages.
- Tanteo, the right of first refusal. Before selling, you must formally notify the tenant of your decision to sell, the price and the main conditions. The tenant then has 30 calendar days from the day after notification to say they will buy on those terms. The notification has to be made in a way that can be proved, typically by burofax or through a notary.
- Retracto, the right to step in afterwards. If you did not notify the tenant, left out important conditions, or sold for less or on better terms than you notified, the tenant can buy the property from the new owner at the price actually paid. They have 30 calendar days from when the buyer notifies them of the completed sale.
The notification is not open-ended. Its effects expire 180 calendar days after it is made, so if your sale takes longer than six months to agree, you notify again. The right applies to sales, not to gifts within a family, for example.
Can the Tenant Have Waived the Right?
Yes. For leases signed since 6 June 2013, the LAU allows the tenant to give up the right to buy in the contract itself, and many modern leases include exactly that clause. Check yours. If the waiver is there, you still have one obligation: you must tell the tenant of your intention to sell at least 30 days before signing the sale.
The Paperwork at the Notary
The deed of sale must state whether the property is let or vacant. If it is let, the Land Registry will not record the buyer as owner unless the notifications to the tenant have been properly made and can be shown. That is why the notary and your lawyer will ask for the burofax or notarial notification, or for the lease showing the waiver, well before completion. Our guide to what the notary checks explains the rest of the signing.
Make sure the buyer also receives a copy of the lease, the latest rent receipts, details of the deposit and any guarantees, and the utility arrangements. A tidy file reassures buyers and speeds things up.
How a Tenant Affects the Price
This is the question most sellers really want answered. A sitting tenant changes who your buyers are.
- Investors are often happy to buy with a tenant in place, because the property earns from day one. They will value it largely on the rent, the remaining term of the lease and how reliable the tenant has been.
- Buyers who want to live in the home, who are most of the market in the southwest, usually want vacant possession. Many will not consider a let property at all.
Because the second group is larger, a property sold vacant usually reaches more buyers. That is why many owners talk to the tenant before going to market. Sometimes the tenant wants to buy. Sometimes they are happy to leave early by mutual agreement, often with help towards moving costs. In other cases the lease is close to its end and waiting a few months makes sense. If your contract expressly allowed you to recover the home for your own or a close relative's use, that is another route, but it is limited by law and needs careful handling.
Our article on how property valuation works in Mallorca explains how we set an asking price, with or without a tenant.
Tax Points to Remember
The sale is taxed in the usual way, with capital gains tax on any profit and the municipal plusvalía tax, covered in our guide to the plusvalía tax. A let property is not your main home, so the main-home reliefs do not apply. Rental income up to the date of sale must also be declared, as explained in our article on how rental income is taxed. Always confirm your own position with a tax adviser.
How We Help
We have been selling homes in Calvià since 1985, including many with tenants in place. We can value the property both ways, let and vacant, talk you through the options with the tenant, and work with your lawyer on the notifications so the sale runs cleanly. Start with a free, no-obligation valuation, or browse our current homes in Santa Ponsa and Nova Santa Ponsa and across Mallorca.
Call us on +34 971 692 434, message us on WhatsApp, or email help@imperial-properties.com.
