If you are one of the thousands of expat’s who come here to Spain each year looking to find a quieter more relaxing pace of life then good for you. You will no doubt want somewhere to live, but do you rent or do you buy?
In recent years, many expat’s have come to Spain and purchased a property here. Prior to the financial crisis, money was cheap and property was plentiful. Now though, things have changed. With many people finding it increasingly difficult to obtain a Spanish mortgage, many are deciding to rent long term hoping that the financial situation will improve in the not too distant future.
For those looking to move here for the first time, renting long term is the perfect choice. Moving to a foreign country is a huge commitment and it's important that you are happy with your new environment before you put a big deposit down on a property.
Renting long term allows you to get a good idea as to whether a specific area will be right for you. For example, many people move inland only to find that they prefer to be near to the beach and visa versa. Others have purchased a finca in the country only to find that moving to an apartment on an urbanisation would have been a better option.
The good news for anyone looking to rent long term is that it is currently a renters market. In recent years, there has been a glut of properties built and many developers and owners are having difficulty renting them. This is good news for tenants and means that there is more choice and greater opportunity to barter for a better price.
Deciding on the Right Property and Location
Deciding Where You Want To Live
Location, location, location! We hear these three words all the time, but at the end of the day, it’s true. Location is everything and getting it right is all important.
Things to consider
Deciding What Kind Of Property You Want To Live In
Something else you need to consider is the style of property you want to rent. Do you want an apartment, villa, townhouse, finca or a cave house?
Things to consider are
How Can I Find Somewhere To Rent?
Fortunately, when it comes to finding somewhere to rent, there are many options including using a rental agent, using expat internet forums, asking friends and looking in shop windows.
Another way of finding a rental property is to drive around in the area that you want to move to and looking for the “se alquila” boards that are an all to often common site in Spain. These are boards that are usually put in place by the owner looking to rent their property.
A good thing about using an agent is that they will speak Spanish. Many landlords in Spain will be Spanish and probably non English speakers, so using an agent means that you will have an intermediary that will be able to help with communication between yourself and the landlord. Agents can also help with connecting and disconnecting the utilities so that the property is ready to move into.
On the other hand, you may want to rent directly. This is fine of course and can lead to other benefits including being able to negotiate the rent, as the landlord will not be paying any agent fees.
Tip: Some agents try to charge a “finders fee”. Any fees paid to the agent should be paid by the landlord, NOT by the tenant.
Rental Contracts - Contrato de Arrendamiento
What is the rental agreement period?
Under new Spanish rental laws introduced in March 2019 and designed to safeguard the rights of tenants, the minimum length of a rental contract will now be extended from the previous three years to five years or seven years if the landlord is a business.
Will the rental agreement be in English or Spanish?
All rental contracts by law need to be in Spanish. If you do not have a rental contract in Spanish and then want to register for Empadronamiento ( Electoral Roll), open a Spanish bank account or get your residencia, you will not be able to. If you use an English rental agency, you quite often will receive a copy in English as well.
If you only have a Spanish contract and are not fluent in the language, it is advisable to have the document translated by an Abogado, Gestor or translator to make sure that everything is in order and that you accept all of the terms before signing.
Terminating the Contact
A landlord can terminate the rental agreement if you
A tenant can terminate the contract if
Once the mandatory renewal period is over, the landlord must give four months notice to the tenant to end the contract. The tenant will have to give the landlord two months notice if they wish to end the contract.
This replaces the existing rules where a landlord would have to give two months notice and the tenant just one.
When signing the contract you need to pay the landlord a deposit (fianza) which is usually one months rent. This will then be paid back to you once you vacate subject to any money that needs to be paid for repairs or damage.
Under the new guidelines, landlords may only ask for a deposit of one month’s rent and may only ask for addition deposit guarantees to a maximum of two months of rent. Where the landlord is a legal entity, they must pay any real estate agency and contract costs.
Paying the Rent
Your rent can normally be paid by either bank transfer to the agent or landlord directly or can be paid in cash.
Tip: Make sure that if you are paying in cash that you get a receipt. If paying by bank, this is not necessary as you will have electronic proof that you have paid via bank statements.
It is also worth noting that under the new legislation, any rent rises during a tenancy must not exceed the Consumer Price Index (CPI) or the measure of inflation. This will bring and end to rental contracts which included an obligatory annual rent increase.
Extra Payments and Community Fees
Unless otherwise stated in the rental contract, the landlord is usually liable to pay the community fees (if the property is on an urbanisation). The tenant on the other hand is required to pay other running costs such as gas, electric, I.B.I (Council Tax) and water.
Whenever you rent a property, you should have an inventory which will detail all the items that will be included in the property such as cutlery, washing machine, microwave, curtains etc.
Tip: Make out your own inventory if one is not provided and get the landlord to sign it. If an inventory is provided, go over it with a fine tooth comb so that you will not be liable for something that is already broken or missing when you vacate.
Sale of the Property and Tenants Rights
Another implication of the new law is that tenants rights under a tenancy agreement will be protected if a property is sold, even if it is not registered at the land registry.
If you plan on selling your property, you will need to make sure you do not lock yourself into a rental agreement of eight or 10 years!
Tenant evictions in Spain are high and the new legislation will aim at reducing this.
Before any tenant can be evicted, it will now need to go through social services to determine whether the tenant can be classed as being in a ‘vulnerable situation’.
If they are deemed to be, the eviction can be pushed back one month if the landlord is an individual or three months if the owner is a business, giving the tenant sufficient time to find a new home. A judge will also have to communicate the exact date to the tenant in that they will evicted.
Will the rental agreement be in English or Spanish?
Rental agreements must always be in Spanish by law. If renting via an agent you may also receive a copy in English.
How Much Are Long Term Rentals In Spain?
Prices vary according to location, style and number of bedrooms. As a guide a low priced two bedroom apartment could set you back €500 per month with a villa at around €1,000 per month. In some areas these figures could be much higher. The key is to shop around, do your homework and compare prices as you would with purchasing any other item. A rural property will generally be much cheaper than something close to the beach.
Is Gas or Electricity Included In The Rent?
In most cases utilities are not included in the monthly rent.
How Long Is A Standard Rental Contract?
Long term rental contracts are now five years or seven years if the landlord is a business.
How Much Are Long Term Rental Deposits In Spain?
You will normally have to pay one months rent for unfurnished properties and two months rent for furnished properties, but this can sometimes be negotiable.
Should I Rent Before Buying?
This is highly recommended. Renting long term before taking the plunge is very important so that you can work out whether a particular area is right for you.
To read more about the recent changes to the rental laws in Spain, please read the following article.