We recommend that all of our clients read through these guidelines before renting their property in Spain.
The tenant will be required to give a copy of their passport/ID card and if they are going to be working in Spain you will be required to apply for a NIE number (Tax Identification number for foreigners). The tenant will also be asked for some references such as an employment contract, pay slips or other references, to show their ability to be a good tenant and to qualify their financial status and ability to cover the rent payments.
By law, on the day of signing, the tenant is obliged to give the owner a minimum cash deposit of one month's rent.
This deposit (or "fianza") is to insure against any possible damage to the apartment.
The deposit is returned after the tenancy agreement is terminated and the owner has 30 days to verify that everything is in a good state, except for normal wear and tear.
If the deposit is not returned when the contract is terminated, the tenant can claim not only the return of the amount but also the interest it has generated.
However, it is very common that landlords ask tenants for different deposit amounts or additional guarantees. This is perfectly legal and should be negotiated between the tenant and landlord.
Types of contracts
In Spain, there are four types of rental contracts:
- Short term rental contracts less than 3 months,
- Temporary rental contracts of more than 3 months, but less than 1 year (11 months is normal),
- Long term rental contracts: 1 year minimum obligatory with the right to stay up to 3 years. After the first year, if the tenant wishes to terminate the contract they need to give two months notice to the owner and send a written notification,
- Luxury properties ("vivienda suntuaria"): For properties more than 300 square meters or over 43.000 euros per year.
We would strongly recommend that owners take out a buildings insurance policy to cover any possible damages in the apartment. In any case, the tenant should also be advised to take out a contents insurance.
Max Adams Homes Agency fees payable by the Landlord
- For short term rentals: Up to 3 months: 20% + IVA of the total amount,
- 3 month's minimum up to 10 months: 15 % + IVA (21%) of the total amount,
- Long term rentals: 1 year 10% of the yearly rent + IVA (21%),
- Renewals: 5% of the yearly rent + IVA (21%).
The agency fees must be paid in full on the day of signing of the rental contract.
Many problems can be traced to the fact that landlords remain largely unaware of the legal implications of renting out a property in Spain.
Entering a Property
What renting entails is actually losing possession of the property for a certain pre-agreed period of time in exchange of perceiving a regular income. This means you can no longer enter the property for the duration of the rental if it is not with the express permission, preferably in writing, of your tenant, regardless if he's up-to-date or not with the rental; that is not an issue.
Landlords cannot enter their own property even if it's just for "inspection" purposes without the said permission.
Non Paying Tenants
Most of the blunders made by landlords are related to their tenants becoming non-paying tenants. This can understandably exert great pressure on landlords, especially if they are relying on the rent to offset it against their mortgage repayments, which can easily lead them to take rash decisions that may come back to haunt them later on in life.
Shutting off utilities (water & electricity). Landlords often feel the urge of doing this on their tenant missing out on their rental. If you happen to do this your tenant can report you to the police. Doing this may be labelled as either coercion or harassment or even both. Your tenant can prosecute you criminally on doing this. So you may want to think twice before doing this.
Changing the locks. Same as above, it may be regarded as either coercion or harassment or both and you may be prosecuted criminally for this.
Entering the property to perform a "routine check". Although it may be highly tempting to take a quick peak. You simply need their permission following Spain's Tenancy Act regardless if they are paying the rent or not.