10 Tips When Renting Or Leasing Long Term in Spain
For many years the standard trend in the property market for us Brits has been to purchase our own homes. But with the spiralling cost of home ownership, and the slowdown in the world economy and people's earnings, the trend is now changing to long-term renting and leasing rather than outright purchase via a mortgage.
The Spanish economy in particular is at present is one of the worst in Europe, a major factor being the collapse of the housing market. Whilst this collapse is great news for prospective buyers, the other side of the coin is that it is near disastrous for anyone wishing to sell, as prices have fallen to rock bottom with as much as 50% being wiped off house prices. Given that buying a house here in Spain is no longer considered such a great investment, (it is likely to take somewhere between 10 and 20 years for the housing market to recover), many people are taking an alternative route and are looking to rent or let on a long-term basis. The cost of renting or letting is in cheaper than buying via a mortgage, and whilst it is true that your money buys you nothing except putting a roof over your head in the short term, there is no danger of losing money, as has happened to homeowners over the last 3 to 4 years.
If you are one of the many considering the rent/let option here in Spain, you would do well to familiarise yourself with the rules and regulations; so we're going to list 10 tips to increase your awareness of the rent/let marketplace.
Tip 1 - The Rent/Lease Contract
The first thing you must do is to ensure that you sign a rent/lease agreement or contract. This is advantageous not only from the property owner's point of view, but also protects your rights too. The agreement or contract should show full personal details of both landlord and tenant. It should also carry a full description of the property, describe the term, or length of the contract, the amount of the rent, and the intervals at which it should be paid, and any other legal agreements that both parties have entered into.
Tip 2 - Short or Long Term Contract?
Spanish law differentiates between short and long-term contracts in as much as tenant's rights are considerably less under a short term contract than a long-term contract. The longest term of a short term contract is normally no more than one year, and these types of contract are typically issued to holidaymakers. At the end of the agreed contract term, the tenants must vacate the property.
Tip 3 - The Deposit
A deposit will be required upon signing of the agreement. This deposit is normally one-month's rent, and will be held by the landlord until the contract has expired, at which point in time it should be returned to the tenants, providing that the property is left in good order.
Tip 4 - The Rent
The agreed amount of the rent or lease (as shown in the contract), is normally to be paid within the first seven days of each calendar month. You should be aware that the landlord is not entitled to ask you for more than one month's rent in advance. Ensure that you always get a receipt acknowledging receipt of each payment. You should also be aware that during the first five years the rent/lease may only be increased or decreased in direct proportion with the official consumer price index (ndice de Precios al Consumo - IPC).
Tip 5 - Do it By the Book
In order to protect your own interests, you should also ask a Spanish lawyer or notary to review the contract or agreement before you sign it, because once signed, you will then be bound to it.
Tip 6 - Keeping up to Date with Payments
It is important that rent agreement, payments are made on time. As a tenant you should be aware that failure to make your payments on time can result in instant eviction.
Tip 7 - Repairs and Maintenance
It is the landlord's responsibility to ensure that the property is maintained in proper order. In the case of emergencies (for example a burst water pipe), then the tenant is entitled to affect an immediate repair and seek recompense from the landlord.
Tip 8 - The Tenant's rights of Pre-emption
Should the landlord decide to sell the property during the term of an existing rent/lease contract, the tenants must be given the right of pre-emption; in other words he/she must be given the first opportunity to buy in priority to any other buyer.
Tip 9 - Sub-letting
Sub- letting can only take place with the consent of the landlord, so if this is something that you may wish to do, you should have it written into your agreement/contract. The financial amount of any subletting rental must be less than the original rental amount.
Tip 10 - Reasons for Cancellation of Contract
There are a number of reasons whereby a contract or agreement may be terminated in advance of term completion. To avoid such an occurrence, you should be aware these reasons are:
Obtaining somewhere to live by long-term rent or lease is becoming more popular in Spain due to the economic climate. Given the poor state of the housing market, there are some excellent deals to be struck. However it is important from your own point of view to insure that you study and agree the contract details, (letting a Spanish lawyer check cheque and over too), before you put pen to paper.
The Spanish economy in particular is at present is one of the worst in Europe, a major factor being the collapse of the housing market. Whilst this collapse is great news for prospective buyers, the other side of the coin is that it is near disastrous for anyone wishing to sell, as prices have fallen to rock bottom with as much as 50% being wiped off house prices. Given that buying a house here in Spain is no longer considered such a great investment, (it is likely to take somewhere between 10 and 20 years for the housing market to recover), many people are taking an alternative route and are looking to rent or let on a long-term basis. The cost of renting or letting is in cheaper than buying via a mortgage, and whilst it is true that your money buys you nothing except putting a roof over your head in the short term, there is no danger of losing money, as has happened to homeowners over the last 3 to 4 years.
If you are one of the many considering the rent/let option here in Spain, you would do well to familiarise yourself with the rules and regulations; so we're going to list 10 tips to increase your awareness of the rent/let marketplace.
Tip 1 - The Rent/Lease Contract
The first thing you must do is to ensure that you sign a rent/lease agreement or contract. This is advantageous not only from the property owner's point of view, but also protects your rights too. The agreement or contract should show full personal details of both landlord and tenant. It should also carry a full description of the property, describe the term, or length of the contract, the amount of the rent, and the intervals at which it should be paid, and any other legal agreements that both parties have entered into.
Tip 2 - Short or Long Term Contract?
Spanish law differentiates between short and long-term contracts in as much as tenant's rights are considerably less under a short term contract than a long-term contract. The longest term of a short term contract is normally no more than one year, and these types of contract are typically issued to holidaymakers. At the end of the agreed contract term, the tenants must vacate the property.
Tip 3 - The Deposit
A deposit will be required upon signing of the agreement. This deposit is normally one-month's rent, and will be held by the landlord until the contract has expired, at which point in time it should be returned to the tenants, providing that the property is left in good order.
Tip 4 - The Rent
The agreed amount of the rent or lease (as shown in the contract), is normally to be paid within the first seven days of each calendar month. You should be aware that the landlord is not entitled to ask you for more than one month's rent in advance. Ensure that you always get a receipt acknowledging receipt of each payment. You should also be aware that during the first five years the rent/lease may only be increased or decreased in direct proportion with the official consumer price index (ndice de Precios al Consumo - IPC).
Tip 5 - Do it By the Book
In order to protect your own interests, you should also ask a Spanish lawyer or notary to review the contract or agreement before you sign it, because once signed, you will then be bound to it.
Tip 6 - Keeping up to Date with Payments
It is important that rent agreement, payments are made on time. As a tenant you should be aware that failure to make your payments on time can result in instant eviction.
Tip 7 - Repairs and Maintenance
It is the landlord's responsibility to ensure that the property is maintained in proper order. In the case of emergencies (for example a burst water pipe), then the tenant is entitled to affect an immediate repair and seek recompense from the landlord.
Tip 8 - The Tenant's rights of Pre-emption
Should the landlord decide to sell the property during the term of an existing rent/lease contract, the tenants must be given the right of pre-emption; in other words he/she must be given the first opportunity to buy in priority to any other buyer.
Tip 9 - Sub-letting
Sub- letting can only take place with the consent of the landlord, so if this is something that you may wish to do, you should have it written into your agreement/contract. The financial amount of any subletting rental must be less than the original rental amount.
Tip 10 - Reasons for Cancellation of Contract
There are a number of reasons whereby a contract or agreement may be terminated in advance of term completion. To avoid such an occurrence, you should be aware these reasons are:
- Non-payment of rent or deposit
- Sub-letting without landlord consent, unless stipulated in the contract
- Causing deliberate damage to the fabric of the property
- Completing modifications or repairs to the property without the landlord's prior consent
- Causing a serious disturbance to immediate neighbours
Obtaining somewhere to live by long-term rent or lease is becoming more popular in Spain due to the economic climate. Given the poor state of the housing market, there are some excellent deals to be struck. However it is important from your own point of view to insure that you study and agree the contract details, (letting a Spanish lawyer check cheque and over too), before you put pen to paper.
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