What Type of Contract Should Landlords Use to Rent Out their Spanish Property?

When it comes to renting out property in Spain, the law is quite complex and can be interpreted in a number of ways. Landlords have to be very careful when deciding on the type of contract they want to use when they find a tenant for their property as the long term consequences could cost them dearly.

In Spain, there are two types of rental contract: The Arrendamiento de Vivienda (Residential Lets) and the Alquiler de Temporada (Seasonal Let). If a tenant wishes to rent out a property as a permanent residence, then a Residential Rental contract should be used. The problem with this is that in Spain, Residential tenants have the right to stay in the property for a minimum of 5 years! (Yes, you read that right, FIVE years!)

Now, most landlords and agencies (La Costa included) use the “famous” 11 month contracts for long term rentals on the Costa del Sol. The reason they are used is that their duration is less than one year and they are therefore technically regarded as Seasonal Rents. This would mean that landlords do not have to worry about their tenants staying for 5 years- well, not exactly. This is where landlords have to be very careful.  If a tenant can prove that the rental property is their permanent residence –  it doesn’t matter if the contract is for 11 months or 2 years – it will be regarded as a residential rental and providing they keep paying the rent, the tenants can stay for up to 5 years.

So if you had plans to rent out your property for 11 months and then sell it, you might find that you cannot do this if your tenant wants to stay on and has proof that its’ his main residence.

The only real way to avoid the minimum period of 5 years is if you stipulate in the Residential Contract (not the 11 months) that the landlord will need to use the property as a permanent residence at the end of the initial contract period. In this case the landlord will be able to take possession of the house legally.

We would recommend you consult with a Spanish Lawyer or a reputable Real Estate Agent before renting out your property. They will explain all the pros and cons to you and you can then decide the best course of action to take.

This entry was posted on Tuesday, October 27th, 2009 at 8:02 pm You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.