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Do you know how you should act concerning all the rental procedures?

Traditionally, Spain has always been a country of owners. This is corroborated, for example, by the data extracted from “housing market in-depth study 2016-2017” published by the real estate portal Fotocasa, which indicates that 8 of every 10 Spaniards live in the ownership regime compared to 2 who rent. In the specific case of Catalonia, the percentage is a bit lower, with 74% of homes being owned and 26% in the rental regime.

However, we find that in recent times the real estate profile of Spaniards is changing. At present 30% of the population is in favor of renting compared to 37% who prefer the purchase of a home.

Whether it is due to a change in mentality of the society, greater geographic mobility, the emergence of the “millennials” in the real estate market, the few options of young people to purchase a home or other circumstances derived from the crisis that the economy has experienced in the last few years, there is an increasing number of people in favor of residential renting.

Along this line, the real estate portal Idealista has published different reports in which it confirms that the demand for rental homes widely exceeds the offer in large cities such as Barcelona and Madrid. For this reason, and given the dynamism of this market, apartments and houses take an average of 3 months to be rented. Even in some cities, such as Barcelona, this time is reduced considerably. At Alting “we have had homes for rent in the portfolio for only 48 hours”, as the  Responsable de Residencial, Gloria Colomer, comments to us.

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BUT, WHEN WE FIND THE PERFECT DWELLING DO WE KNOW WHAT A LEASE CONTRACT IS AND WHAT TYPES EXIST?

Article 1543 of the Spanish Civil Code defines a lease contract as that in which the lessor (or owner) assigns the use and enjoyment of a certain property for a certain time, in exchange for rent. The one who enjoys the use of said property, the tenant, receives the name of lessee.

One must distinguish, nonetheless, between different types of lease contracts:

  1. Contracts subjected to the LAU (Ley 29/1994, of 24 November, on Urban Leases) with its successive modifications:
    – Of usual and permanent dwelling.
    – o Of use other than a dwelling (business establishment/office or seasonal leasing).
    The seasonal lease is that in which it does not respond to a need for a permanent and usual dwelling, but rather it has other purposes such as vacations, studies, temporary relocations…
  2. Contracts not subjected to the LAU and regulated by the civil code or by the sectorial tourist regulations.The lease for tourist use (with license) is that in which dwellings assigned by the owners are rented to sporadic tenants, directly or indirectly, through agencies, in exchange for economic consideration and for a stay equal to or less than 31 days.

In the real estate sector, the contracts are mainly in writting, although an oral contract is also perfectly valid but it is not usual because it can generate problems of proof.

 

WHAT IS THE CONTENT OF A REAL ESTATE CONTRACT?

If we go deeper into this, it is very important that the lease contract of any property contains the following information:

  • Identification of the parties of the contract (lessor and lessee).
  • Identification of the object of the contract (dwelling, annexes, business premises…).
  • Term. In the case of dwellings, the minimum period by the LAU is 3 years.
  • Minimum obligatory term. In dwellings, the maximum period is 6 months.
  • Conditions of advance notice for the end of the contractual relationship.
  • Rent and other expenses and payment method.
  • Clause for updating the rent.
  • Reciprocal obligations. The most important are, on the part of the owner, maintaining the peaceful use of the object of the contract for the tenant and on the part of the lessee, the payment of the rent.
  • Deposit. 1 month’s deposit in the case of dwellings and 2 months for business premises and offices. The deposit avoids possible extra expenses or imperfections for the owner that could derive from the use of the property.
  • Other guarantees (additional deposits, guarantees…).
  • In the dwellings the LAU will always prevail and obligations cannot be agreed to the detriment of the tenant.

Other usual clauses that are included in a real estate lease contract are:

  • Subletting or transfer rights. Normally the tenant has to give up their rights or the way of exercising them and the possible increase in rent in these cases.
  • Rights of preferred acquisition.
  • Construction permission.
  • Discounts and/or grace period.
  • Obligations of preservation and/or improvements.

 

WHAT DOCUMENTATION MUST WE TAKE INTO ACCOUNT?

In order to be able to draw up and formalize a lease contract, the following documentation will be required:

  • On the dwelling:
    • Certificate of fitness for occupation.
    • Certificate of energy efficiency (CEE).
  • On the owner:
    • DNI in case of natural persons or Tax Identification Code (CIF) and public instruments in case of companies.
    • Property deeds or extract from the registry that accredits the ownership of the property.
  • On the tenant:
    • DNI in case of natural persons or CIF and public instruments in case of companies.
    • Proof of solvency: payroll slips, employment contracts, income tax returns, corporate tax returns, commercial reports…

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WHO HAS TO PAY WHAT?

For the owners as well as for the tenants, it is very important to know the obligations, payments and expenses that correspond to each of the parties. Knowing this beforehand will avoid misunderstandings and will allow the rapid solution of possible conflicts.

Unless the corresponding contracts indicates the contrary, it will be the lessee’s or tenant’s responsibility to make the following payments:

  • Tax on Property Conveyance (ITP-acronym in Spanish).
  • 1 month’s rent in advance.
  • 1 month’s deposit in case of dwellings; 2 months if it deals with commercial premises or offices (These are guarantees that are provided and that, at the end of the contract, if there is not non-compliance, will be returned to the lessee).
  • Registration and charges of the necessary supplies (electricity, water, gas, telephone…).
  • Agency fees (in case there is intermediation by a professional real estate consultant).

And the owner, or lessor, in turn, must take care of the payment of:

  • Subsidiary civil liability insurance.
  • Insurance on the dwelling.
  • Property Tax (IBI).
  • Municipal levies and taxes.
  • Expenses of the co-owner’s association.
  • Fees of the agency, where applicable.
  • Capital gain in declaring the taxes (Individual Income Tax or Corporate Income Tax).

In addition, it is mandatory for the owner to enter the deposit in  Incasòl and register the contract, if it is deemed advisable.

At Alting Real Estate Agency  we are specialists in the search and marketing of luxury apartments for sale and for rent in the High District and in the center of Barcelona. If you want to rent your property or if you are looking for a new home, our consultants will work together to find the best solution for your needs. They will accompany you during the entire process of the transaction and will offer you a global range of real estate services to achieve the best result in the least time possible.

Furthermore, at Alting we have an expert team in Asset Management who will facilitate property management with the management of renting your dwelling with all the guarantees, and who will oversee compliance with the acquired commitments in each lease contract.

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