In current climes of increased monthly mortgage repayments, unfavourable exchange rates and money just being harder to come by, experience suggests that a number of you are considering renting your Spanish property on a long-term let so as to keep the baying wolf from the door. If you are contemplating such, I advise that you tread extremely carefully as many a pitfall awaits prospective landlords who do not enter the woods with their eyes wide open.
In Spain landlord and tenant law seemingly favours the tenant’s rights over the landlord’s to a degree that for the uninitiated is, quite simply, mind boggling and almost beyond rational comprehension. By way of example, tenants renting for a year or more enjoy the automatic right to extend the contract for a year, every year, for a further four years. So, in real terms, a year contract might as well be for five years.
A further issue is the speed, or lack of speed, at which the wheels of Spanish justice turn. The law states that an application for eviction ought to be dealt with and disposed of by the courts within 3-4 months of your filing the claim. However, securing an order for eviction can be a prolonged and protracted affair and more often than not will take 12 months and beyond.
Necessarily, until your application for eviction is resolved or concluded, the tenant can continue living in your property at no expense to himself and at somewhat greater cost (and stress) to yourself. So if you thinking of selling your house during those five years, forget it!
To safeguard your position, you ought to have a comprehensive contract drawn up by a competent lawyer. Among other things, the contract will detail the parties’ particulars i.e. the landlord and tenant’s full names etc, the address of the property, the rental cost, when such is to be paid, how such is to be paid and how much deposit (fianza) is to be paid. Typically, the deposit is a month’s rental and will be held by the landlord. However, if parties are unable to agree who is to hold the deposit (and I have to say that if I were a tenant I would not be happy for the landlord to hold it), it can be lodged with the Consejería de la Vivienda, the regional government’s housing department.
You are also strongly advised to ensure that the contract contains a conditional clause stipulating that the tenant is to obtain an ‘aval bancario’ (bank guarantee) and swear the same before a notary. Only by so insisting can you, as the landlord, be sure that you will receive your rental monies throughout the term of the contract. If a tenant has sworn an aval and thereafter defaults on paying the rent, you can sleep safe in the knowledge that the bank will pick up the slack and make the payments as agreed.
Further, you should prepare an inventory of items in the property. The contract should state clearly that the inventory, which is also to be signed by both parties upon checking in and checking out, is annexed to and forms part of the contract.
It is worth noting that when signing the contract, it ought to be signed by all parties on each and every page. Further, by way of an aside, many of you will be familiar with having to sign formal documents in black ink – in
Spain however, the prevailing custom is to sign documents in blue ink so that one can easily tell whether a document is the original or a photocopy.
Further, I would advise that you only let to people you know or failing that, insist on references from reliable sources so as to allow you to gauge the tenant’s character. Although somewhat an unusual practice in Spain.
In matters such as this, I am always tempted to err on the side of caution as I have heard of too many examples of defaulting tenants, a fair number of whom never had the slightest intention of paying more than the first month’s rent. In fact, given how well the law insulates the tenant, it is probably fair to say that in Spain
there is a whole stratum of professional tenants who cause landlords no end of stress and lawyers no end of work.
As stated, if your tenants refuse to pay the rent, getting them to pay or getting them out is a tortuous and Byzantine process. It is also quite costly. You will need to swear a Power of Attorney so that your lawyer can instruct a ‘procurador’ (court lawyer) to submit your claim to the court. Among other things, the claim will state that you wish the tenant to pay all monies as are owed and that you want them evicted from the property.
If the tenant pays what he owes, believe it or not, he can then continue to rent your property and extend the contract until the end of the fifth year. If he refuses to pay, then the court will order eviction and he will be (eventually) booted out. However, it is worth noting that even if the court orders your erstwhile tenant to pay your legal costs, if he is a so called ‘professional tenant’ it is unlikely, indeed improbable, that you will ever actually get him to pay up – meaning you’ll be out of pocket (yet again).
By way of a final word, it is correct to say that the majority of rental agreements pass without problem ergo it is also correct to say that a minority of rental agreements do give rise to some problems. By being aware of the inherent risks and following the above pointers, you ought to be able to make an informed decision and ensure that you (or your lawyer) minimise and manage the potential for what can go wrong. As was ever the case, prevention is less stressful and cheaper than cure.
If you wish more information on this particular topic or would like to discuss any matter raised therein, contact
Reyes Gomez Llorente, De Cotta McKenna y Santafe, on 952 527 014. Offices in Mijas Costa, Coín, Nerja, Granada & Tenerife.
De Cotta McKenna y Santafé
Calle Diputación, 6-2º-A
29780 Nerja
Málaga
Spain
Tel.: (+34) 952 52 70 14
Fax: (+34) 952 52 34 28
website: www.decottalaw.com
De Cotta McKenna & Santafé’s Nerja Office of English Solicitors and Spanish Abogados, Costa del Sol.
De Cotta McKenna & Santafé, English solicitors, and lawyers, and Spanish Abogados, in Marbella, Andalusia, Spain