HELP! - New to renting out a property

Hi all,

I am new to this site and new to renting out a property in Spain and am hoping that some of you with much more expereince than me can help me with a few things.

I am looking at renting long term, but on a temporary contract. I hope to deal with the rental myself and have people close by that can help with meeting tenants, cleaning maintenenance etc but there are some legal aspects that I want to clarify:

1. What references should I obtain and are guarantees possible in Spain?

2. Can credit checks be performed in Spain and if so how? What is the minimum personal information I can request from a tenant?

3. Can I hold the security deposit in my own bank account or must it be deposited elsewhere?

4. How long do I have to carry out any repairs to the property and can the tenant withold the rent until the repairs are done?

5. Is there a maximum period for a long term let on a temporary contract?

6. If I am unfortunate to have problematic tenants how do I go about evicting them?

7. Is there a time period for me to return a security deposit at the end of a tenancy and is there a procedure for deductions e.g do both parties need to agree on deductions being made? what if both parties do not agree?

8. I have heard that changing bills into tenants names can be difficult, time consuming and sometimes costs. What is the best procedure with regards to bills - should I pay them and get reimbursed or should I take the effort to change the holder?

9. Finally the contract - does this have to be in Spanish? Ideally I would like it in Spanish with an english translation. Does anyone know where I could get hold of such a contract? I have also heard that the contract should be submitted to arbitration- does anyone know how this is done? Does there have to be a specific clause in the rental contract?

I know that this is quite a lot of questions but any bit of advice would be greatly appreciated.

Many thanks

Caroline

Caroline

You're asking too many questions!

My advice is to find good tenants and then look after them. I say this because a lot of landlords don't look after their tenants. If the boiler keeps breaking down replace it etc and do repairs in a timely manner.

Personally I would suggest not renting to South Americans or Moroccis and think twice about Spanish and British on the work front (or lack of it!) etc.  If you can then find wealthy retired Northern Europeans. But of course sometimes the type of property dictates the type of tenant.

The deposit should be paid over to Junta Andalucia.

The norm is an 11 month contract because the law changes if it's longer. Although I believe short-term can be up to 1 year?

The law has changed to make it easier to evict.

Even though it's hassle I would suggest getting the tenant to take out new utility contracts - although that is not the norm?

The contract should be in Spanish. I believe you can buy standard contracts from the kiosks/tobaconnists etc or whereever it is you buy this type of standard documenation.

But I think you might be best consulting with a solicitor who will draft an appropriate contract for yor for about EUR250 to EUR300. A gestoria might be cheaper but it will be more standard and lack proper consulation as more than likely all he will do is complete a standard type contract.

Also don't forget the tax situation. If you are non-resident then you are supposed to pay tax on your gross rental income with no deductions at all allowed.

I'm afraid I'm not an expert in rentals so ....

http://www.eyeonspain.com/spain-magazine/renting-maria4.aspx

http://www.eyeonspain.com/spain-magazine/renting-maria5.aspx

My most and first advise is to submitt the contract to arbitration rather than Courts.

Please have answers to your questions below in bold green ( same text as your email): 

1. What references should I obtain and are guarantees possible in Spain? The best guarantee is to submitt the contract to arbitration rather than Courts. References can be provided by the tenant but there is nothing like a public office to provide them.

2. Can credit checks be performed in Spain and if so how? RAI is a defaulters registry in Spain.  What is the minimum personal information I can request from a tenant? As much as he allows you to.

3. Can I hold the security deposit in my own bank account or must it be deposited elsewhere? Yes, you can hold it in your own bank.

4. How long do I have to carry out any repairs to the property and can the tenant withold the rent until the repairs are done? There is no legal timeframe for the repairs being done. It will depend on the type of reparations needed on every occassion. The tenant can terminate the contract if repairs are not made, so any unpaid rents will be difficult to claim back.

5. Is there a maximum period for a long term let on a temporary contract? No, there is not.

6. If I am unfortunate to have problematic tenants how do I go about evicting them? Through the eviction procedure, whish is long and costful. That is why we always advise people to submitt the contract to arbitration ( quicker, and cheaper way to solve this type of conflicts)

7. Is there a time period for me to return a security deposit at the end of a tenancy and is there a procedure for deductions e.g do both parties need to agree on deductions being made? what if both parties do not agree? You have one month after which, legal interests will have to be added to the refund. Yes, both parties need to agree on deductions being made. If there is a disagreement you can go to the Consumers  office ( if the landlord was a company). The arbittration system covers these circumnstances much better than the judicial system would do.

8. I have heard that changing bills into tenants names can be difficult, time consuming and sometimes costs. What is the best procedure with regards to bills - should I pay them and get reimbursed or should I take the effort to change the holder? This depends on personal preferences.

9. Finally the contract - does this have to be in Spanish? Ideally I would like it in Spanish with an english translation. Does anyone know where I could get hold of such a contract? Any lawyer with rentals services should be able to provide this to you. I have also heard that the contract should be submitted to arbitration- it is highly advisable does anyone know how this is done? Does there have to be a specific clause in the rental contract? Yes, it does. You will also be choosing the arbitrator in that clause

Thanks Maria once again for your excellent answers. Just one question I have, do you know who deals with the arbitration in the Fuengirola area?

Thanks again

Hi Maria - I normally don't get involved in long-term rentals but have been asked to assist a UK resident with a problematic long-term tenant here in Alicante province. 

The tenants have been there a number of years and it is their home in Spain - they are Moroccan.  They suddenly stopped paying the rent at the end of last year and have only paid one month's rent since - this was in March.  They therefore now owe 3 months' rent to the owner.  The owner pays all the utilities out of the bank account where the tenants are supposed to lodge their rental payments, so he is having to pay money into the account to pay the bills for the tenants who will not pay him! 

I have spoken to the tenants several times and they state that they are struggling to pay due to the crisis, but they have not made contact with the owner, as they promised they would, to see if they could re-negotiate the rent or at least make part payments.  They say they are looking for a cheaper property to rent.

Reading your (very helpful) guide to renting - it looks that he can now cancel the contract and ask them to leave, but I would be grateful if you could clarify the process.

• Does he have to give them notice - if so how long? 
• Can he cut off the utilities if they don't pay the rent?
• If they say they won't leave what power does the owner have to physically evict them and how is this done?
• the garden is a real mess and I don't know what the inside is like, do I have the right to enter the building and inspect it, if I am mandated to do so by the owner?

Sorry for all the questions but this is not my normal line of work!

As I said in my earlier post don't rent to Moroccans or South Americans!!

I previously tried to get electricity disconnected but when Endesa arrived and disconnected and saw there was a baby there they re-connected. I then began a massive argument with the legal department of endesa in Malaga.

Tenants were South American - problem was they were innocent as a keyholder had rented the property to them and tried to sell the property to someone else. Abused a power of attorney and signed a private contract and took a deposit and "new owner" rented out property. Obvisiously this is Spain we're talking about!!

I used the criminal denunia system to my advantage and caused a lot of trouble such that tenants did not like the crossfire and bailed out.

My personal advice is sometimes the law is slow so you have to play games to win and save on legal fees.

It was not my property I was only brought in to recover which I did.

A Spanish friend asked a neighbour for help in a similar situation and neighbour was ex-guardia civil so he brought along a gun and problem was immediatly resolved. This was Galicia so maybe things are done a bit different up there?

Other option is ask 2 heavily built Russians to pop along and have a polite chat - also seems quite effective. 

Just some ideas!!!!

Specially in these days i say take out a rental insurance.

http://www.segurodealquiler.es/

This is just one site i found but there are more

It covers everything and leaves you being able to relax a bit

Joan

Hi Joan

Good advice prevention being better than cure!

Have you purchased this product yourself?

How much does it cost?

and did you ever have to make a claim and if so how was it handled - I hope better than insurance or bank guarantees on deposits paid etc

I have not my self, a friend of mine took one on but i cannot remember the name of the company.  He was renting for 600 a month and the insurance was 300 a year.  It covers tenants not paying, damages, legal help getting them out of your property and taking them to court ... etc

In order to be able to take it on they normally ask you for the tenat to be working with a contract older than 6 months old and your rental needs to be declared.

Different companies have different requirements.

My friend has not had to ask them for anything just yet as his tenants are paying correctly.

Joan

Thank you for all your help, and I apologise again for all the questions! I just want to make sure all I do is correct.

Actually picked up a leaflet "garantia de alquiler"  which seems to be about the arbitration. The website is lacortedearbitraje . es Sorry but my spanish is not the best but the procedure seems to cost 58 euros but I dont think they do the insurance to cover the rent (i may be wrong). Maybe someone with a better grasp of spanish could have a look at the site. Does anyone know of any english speaking companies that deal with submitting to arbitration/rental insurance?  

 Hi Caroline,

We use Intasure - they have always been good for us. No quibble about paying out for damages etc. There are loads of rental insurance companies out there. 

If your'e not sure how to rent why don't you take on a rental company ? or too dodgy? 

Claire: NO worries about the questions: I am pleased to answer them for you. Please have answers below in bold green ( same text as your email) 

Hi Maria - I normally don't get involved in long-term rentals but have been asked to assist a UK resident with a problematic long-term tenant here in Alicante province. 

The tenants have been there a number of years and it is their home in Spain - they are Moroccan.  They suddenly stopped paying the rent at the end of last year and have only paid one month's rent since - this was in March.  They therefore now owe 3 months' rent to the owner.  The owner pays all the utilities out of the bank account where the tenants are supposed to lodge their rental payments, so he is having to pay money into the account to pay the bills for the tenants who will not pay him! 

I have spoken to the tenants several times and they state that they are struggling to pay due to the crisis, but they have not made contact with the owner, as they promised they would, to see if they could re-negotiate the rent or at least make part payments.  They say they are looking for a cheaper property to rent.

Reading your (very helpful) guide to renting - it looks that he can now cancel the contract and ask them to leave, but I would be grateful if you could clarify the process.

• Does he have to give them notice - if so how long?  He does not. One month of unpaid rent and the case can go to Courts. If the lawsuit asks for eviction this can be performed as soon as the Court decissions comes out. The Judge needs to pass a decission withing 6 days from trial and notice of the lawsuit is performed through edicts if the tenant is not at the house.
• Can he cut off the utilities if they don't pay the rent? He cannot.
• If they say they won't leave what power does the owner have to physically evict them and how is this done? No power to physically evict them  but through the Courts´ procedure and means.
• the garden is a real mess and I don't know what the inside is like, do I have the right to enter the building and inspect it, if I am mandated to do so by the owner? Depending on agreements made in the contract regarding this. Of course every inspection would need to be carried out with respect to intimacy specially if this is a family home.

Sorry for all the questions but this is not my normal line of work!