All about leases

You want to rent an apartment or a villa in Spain. A new law has been in force since March 2019. So what do you need to know about the new long-term rental contracts in Spain?

All you need to know about new leases in Spain, and a little more…

Do not hesitate to contact us! Send us an email at spainpurchase@yahoo.com

LEGAL DURATION OF RENTAL: 5 YEARS

A NEW LAW SINCE MARCH 2019
A new Long Term Rentals Act came into force on March 6, 2019. In particular, it changes the term of the contract from 3 to 5 years. It guarantees the longevity of the rental. The law removes the ITP paid by the tenants. It also provides a barometer of rents, to measure the evolution of rents in each neighborhood.

If the renter is a legal person, the legal duration of rental is 7 years. This is 3 years renewable by agreement.

However, if after a year, the owner wants to recover the housing to make his main residence (for him, his spouse or children) and if he warned you two months before, then you must leave the house.

Attention, this possibility must be expressly mentioned in the contract otherwise the owner will not be able to take advantage of it. This measure is obviously not valid for a legal person.

THE MOST FREQUENT ABUSE CLAUSES

Before signing the contract, check that some of its clauses are not abusive, in particular by limiting the rights of the tenant. The most common are:

Contract duration limited to 10 or 11 months; not legal rental period is 60 months (5 years), except for temporary rentals.

  • contract term limited to 10 or 11 months; no, the legal rental period is 60 months (5 years), except for temporary rentals
  • duration of 1 year contract, renewable after agreement of both parties; no, again, this clause is illegal
  • more than one month’s rent to pay in advance; the landlord can not demand more than one month’s rent in advance, and he can not in any case evict a tenant under this pretext
  • maintenance work on the property; the owner must carry out the necessary work to maintain the rented housing, this may concern for example an old water heater to change, or a defective water evacuation system, or a completely defective thermal insulation.
  • access of the owner to the dwelling; the tenant alone is entitled to let the owner enter the dwelling.
  • six-monthly rent review; the rent can only be revised annually and is based on the IPC index
  • annual review of the bond; the deposit can not be valued before the maturity of 5 years
  • payment of IBI, condominium fees, garbage tax, or home insurance; all these charges must be paid by the landlord and not the tenant
LEGAL CLAUSES OF LEASE CONTRACTS
  • The transfer or partial subletting is possible but with the prior agreement of the owner, and if the price of the sublease does not exceed the price of the rent
  • Financial compensation in case of exit of the tenant; in all cases, the tenant has the obligation to pay the first 6 months of rent; after 6 months of rental, the tenant can leave if he has given his owner 30 days notice, with compensation that corresponds to 1 month of rent per year of contract remaining to be made (in case of a partial year, this calculation will be done at prorated the rest of the year)
  • The work in the housing can be done by the tenant but with the prior consent of the owner
  • The owner can ask for 1 to 3 months deposit (1 month deposit + 2 months warranty)
  • The monthly payment deadline for the current month is normally set before the 7th of the month
  • If the owner does heavy work, he can increase the rent up to a limit of 20% (unless otherwise stated in the contract)
  • Taking an inventory at the entrance and exit of the tenant onthecondition of the property
  • The presence of animals are prohibited
  • Rehabilitation of housing at the exit of the tenant (and in particular painting work)
  • The deposit can not be used to pay the last rents
PAYMENT OF ITP ON RENTS

The property transfer tax (“Impuesto sobre Transmisiones Patrimoniales” or ITP) on rents has existed since 1993 but hundreds of thousands of tenants (and landlords) did not know about it until Madrid, Catalonia, Asturias and Andalusia begin to demand payment. Not paying this tax is liable to fines of up to 75% of the value of the tax. This tax is payable only once within a maximum of one month after the signing of the rental agreement. Depending on the region, count 150 to 200 € for a rent of 1000 €, 300 to 400 € for a rent of 2000 € and 450 to 600 € for a rent of 3000 €.

This tax is still valid for contracts signed before March 2019, but it no longer exists for new leases.

A WRITTEN AGREEMENT AT THE END OF THE RENTAL AGREEMENT

When you leave the accommodation, it is safer to have a written agreement with the landlord, in particular:

  • mark the final rental and delivery date of the unit to the owner,
  • append the housing inventory to the exit, specify the remaining obligations (eg electricity bills remainder),
  • and establish the terms of repayment of the deposit (net of any costs).
  • Attention, the owner has a period of one month for the refund of all or part of the deposit. After this period, he will have to pay a legal interest to the tenant.
AND IF THE OWNER SELLS HIS HOUSING WHEN YOU OCCUPY IT?

The owner has the right to sell his home even if you occupy it. In this case, the rental must be registered in the property register (“Registro de la Propiedad”) before the sale, and this for the good continuity of the rental. If the registration is not made, the new owner may demand the end of the lease and the tenant will still have the right to stay in the house for a maximum of three months.

A MODEST RENT CAN BE VERY EXPENSIVE!

Be careful, even an attractive rent can be very expensive! Because you will have to pay before entering the housing rent in advance, the deposit, agency fees and taxes.

For example, you have flashed on this apartment of 60 m2 in the center of Barcelona in good condition at a reasonable rental price of 800 €. Yes but here you have to pay, before you get the keys, a month’s rent (800 euros) + three months deposit and guarantee (2.400) + agency fees (12 months rent divided by 10 = 9600 / 10 = 960 €) + the corresponding VAT (202 €) + the contract fees (300 €), ie in total … 4662 € !!!

Do not talk about this apartment of 150 m2 to 2000 € which will require you to pay more than 10.000 €!

If the owner is a legal person, the contract costs are at his expense.

OTHER RECOMMENDATIONS
  • You can include in the leases the meter readings of water, electricity and gas. This can prevent you from any surprises.
  • Always ask for a rent receipt even if you pay in cash.
  • Take a picture of the different rooms of the apartment before you move in and attach them to the rental agreement.
AND OTHER FORMS OF RENTAL: TEMPORARY AND TOURIST

There are two other forms of rental possible in Spain, temporary rentals, usually from 1 month to 12 months, and tourist rental (less than a month).

Temporary Rental

Temporary rental (“alquiler de temporada” in Spanish) is often used by some clients: employees to be accommodated for a few months, students from September to June, people undergoing medical treatment, etc.

To be acceptable, temporary rentals must comply with a number of legal conditions:

  • The temporary rental apartment can not be the main residence of the tenant; the habitual residence of the tenant must also be specified in clear in the lease agreement
  • There must be a valid reason not to rent the dwelling under the normal lease; for example, workers who need housing for the time of a construction site, students who take courses, people in need of medical treatment or their escorts, etc. This reason must be clearly stated in the rental agreement.
  • As a result of the foregoing, a termination date must be agreed and recorded in the contract. It can not be extended and must coincide with the aforementioned parameters: work to be done, school year, medical treatment, etc. Rental times are generally between 3 and 15 months.
  • The title of the contract must be: “Contrato de arrendamiento de uso distinto a vivienda”
  • The deposit is two months.

The lease is valid for the duration determined in the contract. Neither the owner nor the tenant can change this duration. A tenant who would like to leave before the end of the contract will have to pay all rents until the end of the contract. An owner can not recover his home before the end of the contract.

The energy certificate is mandatory to rent a property for a period longer than 4 months.

The temporary lease is not governed by any law, but by the clauses agreed between the tenant and the lessor (owner) in the lease. So before renting, be very careful with the drafting of the contract.

Tourist rental

83 million tourists stayed in Spain in 2018, a new historical record. And they spent 90 billion euros! They do not all stay in hotels or campsites. Far from it, since since 2016, the capacity of reception of the tourist hirings of Airbnb and others in Spain is superior to the hotel capacity. For two years, municipalities have responded by limiting the proliferation of “pisos turisticos“, but about 400,000 tourist beds are offered in apartments or villas. And if you are a owner in Spain, you are certainly one of those who rent their villa or apartment on sunny days.

The most popular tourist rental destinations are in descending order of importance: Barcelona, ​​Madrid, Valencia, Malaga, Seville, Palma, Granada, Alicante, San Sebastián and Marbella.

The duration of a tourist rental can not exceed 31 days.

The rented apartment or villa must have a tourist license. It is a guarantee of service and hospitality. Obtaining this license has become more complex. We must now fulfill conditions related to urban planning rules (direct access from the street for example), facilities (wifi or air conditioning), services offered (availability of tourist information on the area, presence of a notebook claims) or condominium licenses. Not to mention the reception of the customers, the cleaning of the premises, the availability in the event of problems, the management of advertisements on Internet, etc.

If needed, you can use or refer to this standard rental agreement.

For a lease with an option to buy, here is the contract

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With more than 20 years of experience in real estate acquisition procedures in Spain, we are at your disposal to assist you with all the necessary steps from the search for a property to services offered after the acquisition. When you are buying a home in Spain we help with organizing the visits of properties, the legal verification of the properties, the obtaining of a mortgage, the administrative procedures and the signature of the different notarized documents.
Do not hesitate to contact us!
Send an email to spainpurchase@yahoo.com.
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