Renting a Property

In Gibraltar, the law relating to lettings can be found in two enactments. Business tenancies are covered by the Landlord & Tenant Act, and residential lettings come under the Housing Act.

Both Acts seek to provide a level playing field, but can sometimes create traps for the unwary.

Thus, where a residential property was built before the 1st of January 1945, tenants are entitled to certain protections including security of tenure for themselves and their family. Landlords will not be able to charge more than the "statutory rent" for such premises, and these will invariably be much lower than current market rents.

Before entering into a letting arrangement, landlords must ensure that they do not inadvertently give away the value of their property. There are ways in which this can be avoided, and your lawyer will advise you accordingly, depending on the age and configuration of the property.

Part V of the Housing Act provides a scheme for the levying of reasonable service charges for the maintenance of residential buildings.

When it comes to dwellings built after the 1st January, 1945, landlords must still be careful to use tenancy agreements which are drafted to ensure that tenants properly maintain their apartments and that they can be recovered as quickly as possible in the event of a failure to pay rent or other defaults.

Commercial / business tenants are entitled to security of tenure, which means that even after the termination of a lease they will be entitled to remain on the premises, paying the then current market rent.

Commercial landlords (and this includes the owners of shops and offices) will only be able to recover possession if they are able to establish that the tenant has been in breach or that the landlords need the premises back for their own business, or for redevelopment.

Even in these two cases, a tenant will be entitled to an extended term of tenancy and to compensation.

The legislation also imposes restrictions on landlords who have owned a property for less than five years. Tenants will be able to sign business tenancies with the consent of their landlords, not to be unreasonably withheld, but on payment of a premium, which could be as much as the equivalent of two years rent.

A properly drafted commercial lease will include provisions for rent review after, say every three years, to keep up with market conditions.

Over the last 30 years the market for both commercial and residential accommodation in Gibraltar has been very buoyant. However, the legal intricacies require great care to be taken in drafting documentation before committing to a tenancy.