Interview with José Manuel Cerviño Sosa at Canal Sur Radio on the topic of rentals in Spain

English speaking Spanish Lawyer of the team of law firm Arcos & Lamers Asociados in Marbella.

– There are some essential topics in the rental-housing act in Spain, although more related to long-term rentals than seasonal rentals. What are the most frequent asked questions in relation to tenancy? 

At the office, we get to deal with two main topics daily. The first one is related to the contracts, that is to say, the way contracts should be negotiated and drawn up. This is dealt with case per case. On the other hand, we deal with what is known as contractual crisis. In other words, when for some reason, mostly because of non-payment of the rent, the owner or landlord tries to repossess the property by means of eviction procedures.

– And what is the situation at the time? Why does the economic crisis have so much influence on this kind of problems?

Of course it has a lot of influence. Crisis has influenced financial possibilities of tenants but also of landlords. Tenants because of their capacity related to their proportion expenses and income and landlords because most of them had a mortgage on the property they rent out to finance it. In this way, they tried to make some savings. Of course the economic crisis has had an influence on the tenancy possibilities.

– The biggest problem is undoubtedly the fear of many landlords to rent out their properties to people who cannot pay anymore after a while. I understand that in first instance one has to try to come to an agreement between both parties. In case of eviction, a court case must be held. But what can we do to prevent this? The best thing to do is to take some preventive measures, no? 

It is important to analyse the financial possibilities of the tenants, in other words, if we are not dealing with a case of insolvency. This can be done by asking tenants who are employees a copy of their last two or three payslips.  In case the tenant is no employee, like self-employed people but also dependent people who have no income yet, like students for example, the best thing to do is to ask for a kind of guarantee: personal guarantees, in which case a person is liable for the tenant in case the latter does not pay or does not comply with some of the contractual clauses. But it can also be a bond or bank guarantee. They are to be recommended but they are quite difficult to obtain in the current situation.

You can also take out an insurance for cases of non-payment, but you need to know what you are taking out, what is included and covered. In my opinion, this information is many times incomplete or confusing. You also need to take into account the cost of the insurance itself.

– The issue on the insurance is most interesting for both the landlord and the tenant. Palma from Algeciras has certain doubts and is calling us: Hello Palma. 

• Good morning, I have the following question. My son is studying in Granada and on the 15th of Jul, the contract terminates. The landlord had to give us back the bond, but now he says that the mattress is not there. It’s not that the mattress is gone and missing, but we replaced it. I’ve explained this to him and I told him that no inventory was made so he cannot say that the mattress is not there or has been replaced. What I feel now is that we are defenceless against the landlord, as he keeps saying that the mattress is missing. I’ve told him that my son is 2 meters high and he needed another mattress. They have been without a fridge during 16 days. I would also be able to require something back.

In this case, one important point is that at the time of signing a renting contract in Spain, you need to attach a detailed inventory. Normally this is not done, because at the time of signing a contract or making a deal, you do not want to feel you are bothering or seem suspicious. But it should be done. Inventories must be attached in order to avoid many problems. In the case of this lady, I understand as there is no inventory and the mattress has been replaced, the landlord has no right to retain part of the bond, except if he can proof that the first mattress was of a different quality or had other features. But the issue here is that everything needs to be prepared before signing the contract and this is where it went wrong.

– Are there certain simple but essential points of interest when renting a Spanish property in order to avoid complications.    

Yes, of course. It’s important to draw up a Spanish Rental contract that is adapted to the current rental-housing legislation. The rental contract in Spain needs to include all important elements, such as the purpose of the contract, the rental price, the method of payment, the guarantee, the inventory, the determination of the contract, etc. This always needs to be included in the contract because as they say “words are blown with the wind” and everything that is not in the contract, may be a future source of controversies.

– The Spanish Rental contract should also mention what the tenant and the landlord will pay, in other words, who will pay what in relation to any kind of works that need to be done or in case of certain damages. True?

Yes, it must be all recorded into detail: the amounts that will be paid, the rental price, who will pay what kind of expenses such as supplies, electricity, water, gas, community fees and even the real estate tax. Also who will pay the works, which kind of works will be for account of the landlord, and which must be paid by the tenant.

– Let us analyse a specific case. Imagine we rent an empty house with basic household appliances and now the topic of insurance comes up. Is it necessary that both the landlord and the tenant have an insurance for the furniture of the house?  In other words: the tenant has the right to take out insurance for the materials and furniture of the property?

Of course, everyone has the right to do that. In fact, taking out insurances is a free choice. Our legislation does not determine whether the tenant or the landlord need to have an insurance. But the landlord can determine in one of the clauses of the contract that the tenant takes out an insurance which covers certain items, for example for the furniture and household appliances in the property, for any kind of incidents related to electricity or water leaks, etc. But there is no legal obligation. Parties are free to decide so. And within this autonomy, the landlord may impose the tenant to take out an insurance as a contractual clause.

– How is the contract terminated if such is not perfectly detailed in the contract itself? Is there a legal determination?  

The general causes for which a Rental contract is terminated, the most frequent ones, are perfectly determined by Spanish law for the case these are not recorded in the contract. In this sense, the most frequent cause in the field of rental housing is non-payment of the rental price. In this topic you might have issues that are easy and understandable to solve, but as from there we can complicate things quite a lot.

– It is often so that the rental price is not paid for, times goes by, justice does it work but goes very slowly, and in the end it comes so far that the owner must put up with the fact that the tenant does not pay for quite a long time. This happens, doesn’t it?

Of course. Some tenants know this too well, they know exactly how rental contracts and eviction procedures work. They calculate everything, sign the contract, pay the first or the first two months that correspond to the bond, and then they stop paying. They know that the landlord shall only start the procedure after a certain period of time. And they make abuse of this knowledge. That’s why it is so important to sign all possible guarantees.

– In Spain we use a lot these guarantees, but sometimes not in a good way. However, it is better to prevent than to search for a solution afterwards.  

Yes, it is better to prevent. We must also take into account that movable and immovable estate are not considered as production or performance goods, so they are increasingly burdensome to maintain them. Everyone knows that public administration increasingly encumbers when dealt with properties. But it is important not to get into a hurry and choose a good tenant. I consider that the most important issue. It is better to prevent than to cure. And it doesn’t cost anything to consult a good professional lawyer.