Letting Property in Spain

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This topic contains 19 replies, has 7 voices, and was last updated by Profile photo of Chopera Chopera 4 years, 2 months ago.

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  • #57084
    Profile photo of Anonymous
    Anonymous
    Participant

    My understanding is that in Spain you can only let property for 6 months without giving your tenant rights to remain and particularly to observe this if they are Spanish. In UK we have the Shorthold procedure for letting that enables you to get your property back. A Shorthold Let in Spain would be a very good way to get the property market moving as investors would buy property for rental income. My opinion is that ypu cannot safely let at present for more than 6 months -is there any way round this ?

  • #112428
    Profile photo of katy
    katy
    Spectator

    Unless it’s changed it was 11 months 😕 Not much use buying to let on the Costas, there are thousands of empty properties. A friend intended to do the same, never managed to rent it out. There are about 32 up for rent in the same block.

  • #112430
    Profile photo of Anonymous
    Anonymous
    Participant

    I know of a Guardia Civil who doesn’t pay his rent….he stays for 10 months and then leaves to find somewhere else to do the same. The courts are supposed to be clamping down on non payers but it still makes me laugh to remember what a local court lady said when I went to ask for a friend who had unwanted non payers….. ‘quick evictions might be happening in other parts of Spain but not here’ and when I asked where we could find some information about it she suggested…..’google’ !

    Ask any lettings agent and they’ll tell you lots of horror stories. I know of a terrible British daughter/mother who trashed a bar/restaurant and caused no end of problems. The police could do nothing and it took the owners nearly two years to get them out. Two years where they didn’t receive a cent of rent and they hadn’t changed the water/electricity into the tenants names so they had to continue paying that as well.

    It’s sad but I really wouldn’t know who to trust to rent out a place. Rents are so cheap that people think that it’s not even worth paying at all?

    Also, who’s renting now anyway? All those locals who have lost their homes are living with family/parents as they can’t afford to do anything else for the rest of their lives with the banks chasing for the mortgage debt. Those who wish to buy, ie: retired Brits…. there are so many properties that they can have their pick. Holiday lets? Why wouldn’t someone prefer the better prices and service of a hotel?

    I honestly didn’t sense that a ‘buy to let’ option was popular with local Spanish as youngsters stay at home until they buy their own place. Now they (us included!!) have moved back in with the parents!

  • #112434
    Profile photo of Anonymous
    Anonymous
    Participant

    Agree, with “itsme”

  • #112437
    Profile photo of Chopera
    Chopera
    Participant

    The Madrid council runs a guaranteed letting scheme whereby it finds the tenants and covers any missed payments. I don’t think it’s the only one to do so. I know someone who has used it with varying success.

    Regarding tenants it’s pot luck really – my in-laws have been renting out their old flat for 20 years to the same people, and they’ve never missed a payment.

  • #112439
    Profile photo of Chopera
    Chopera
    Participant

    Of course if you worry about tenants, a safer option might be parking spaces. If you can block buy the parking spaces for an entire building from a desparate bank, you might be on to a winner if the flats do eventually get sold

  • #112441
    Profile photo of Anonymous
    Anonymous
    Participant

    @chopera, While I take a bigger picture of your posting. In the present climate. I probebly have a better prosiblity of recovering the rent from an indiviual than a Council !!!.

  • #112443
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    Anonymous
    Participant

    Well this makes interesting reading ! Obviously this is an area that Signor Rahoy needs to address. I wonder how we might make an impact on him -a kind of e-petition highlighting issues that need addressing – Shorthold Contracts with quick access to the courts and immediate re-possession with the police in possession to evict rogue tenants.People who miss sometimes for fair reasons is something different. If there are too many empty flats maybe the rents are too high? Better a lower rent than no rent ?Toomuch concrete in the last 30 odd yearswith a big overhang ! Obviously the rental market a complete mess but getting it right an important for getting economy moving. I read today Spains exporting is improving and the country is becoming more competitive. As long as the euro does not not start going up too much.

  • #112452
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    Anonymous
    Participant

    @ itsme when on holiday as a family we never stay in hotels for the simply reason we want to relax and do things when we want to do them.If we have been out enjoying some entertainment the night before we don’t want to be dragging the kids down to breakfast.
    We rent a villa which suits our needs and as the only early riser in my family i love sitting in a naya having a coffee whilst its all quiet or having an early morning swim without the kids jumping on me.

  • #112453
    Profile photo of Chopera
    Chopera
    Participant

    @Ptr wrote:

    Well this makes interesting reading ! Obviously this is an area that Signor Rahoy needs to address. I wonder how we might make an impact on him -a kind of e-petition highlighting issues that need addressing – Shorthold Contracts with quick access to the courts and immediate re-possession with the police in possession to evict rogue tenants.People who miss sometimes for fair reasons is something different. If there are too many empty flats maybe the rents are too high? Better a lower rent than no rent ?Toomuch concrete in the last 30 odd yearswith a big overhang ! Obviously the rental market a complete mess but getting it right an important for getting economy moving. I read today Spains exporting is improving and the country is becoming more competitive. As long as the euro does not not start going up too much.

    They are aware of the issues and recently changed some of the laws to make it easier for landlords. The problem is that in Spain the law is one thing, what happens in reality is another.

  • #112461
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    Anonymous
    Participant

    ” The problem is that in Spain the law is one thing, what happens in reality is another.”

    Here lies one of my biggest issues with Spain.

  • #112470
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    Anonymous
    Participant

    Chopera -do you have a link to any informacion about these recent changes please. I do think that if they really got to grips with the legal aspects then the price would in due course rekindle an active market even if the rents are at a lower level a market would arise.

  • #112479
    Profile photo of Chopera
    Chopera
    Participant

    @Ptr wrote:

    Chopera -do you have a link to any informacion about these recent changes please. I do think that if they really got to grips with the legal aspects then the price would in due course rekindle an active market even if the rents are at a lower level a market would arise.

    http://economia.elpais.com/economia/2012/08/24/actualidad/1345820161_558361.html

    In Spanish, here it is after google translate has had a go…

    The new law easing measures and Promoting Housing Rental Market, which the Cabinet has given the green light on Friday, includes a series of legislative changes designed to assuage the fear of many owners to rent their properties. The changes remove many of the rights that guaranteed the protection of tenants against landlords, which naturally has raised many questions among rental living.

    What if I can not pay the rent?

    If your contract does not require him to pay any compensation, you can leave the floor with a notice period of one month (until now should be two). According to the Minister Ana Pastor, this is the measure that benefits: allows you to leave the house in case you no longer have as pay. If you still do not pay the monthly fee, things will remain as the last legal reform approved in October 2011: your home may go immediately to the judge, who will give a period of ten days to pay, or have to leave the floor its claims. The main change in the new law is not sufficient to pay the rent that is due to stall the proceedings. Another aim is to reduce the bureaucracy of the legal proceedings for the eviction takes effect in less time. So, instead of a decree of the court clerk simply judge’s car. Furthermore, to be valid eviction sufficient that a judicial officer is present, instead of the two that were needed so far.

    I have a lease for three years ending December. I want to live in this house. Did I hurt the changes in the law?

    So far, all contracts for less than five years were automatically extended each year until a total of five years (the so-called forced extension) if terminated without the tenant to the landlord had communicated his intention to leave. After those five years, if neither the landlord nor the tenant had indicated its willingness to terminate the contract, this was again extended annually (the so-called tacit extension) to a maximum of three years. Under the new law, the forced extension is reduced from five to three years, while tacit renewal is reduced from three to one. So, if your agreement ends in December and the law is passed by then, your landlord may indicate their desire to terminate the contract. Your landlord may also check the value of the bond.

    Two years I’ve been living in an apartment. My landlord lives abroad, but his daughter will start college in my city next year. Can my landlord kick me out of the floor?

    Yes So far, the landlord’s right to recover the floor for residential purposes should be expressly stated in the contract. If it was not, the landlord must wait for him to finish the term of forced extension (five years) to ask him to leave. The new law will allow the owner to ask the floor at any time to use as home ownership or an immediate family member, with two months’ notice.

    My landlord wants to sell the flat. Does the new law will force the new owner to keep the contract?

    As long as the car is registered in the Land Registry. So far, as a rule, the new owner must maintain the contract to meet the extended deadline forced (five years). Under the new law, if the contract was not entered in the Register, the new owner is entitled to recover the ground immediately. The registration of rents in the Land Registry has been, until now, a cumbersome and expensive process involving a notarized deed. The ministry has already announced its intention to cheapen and facilitate the procedure.

    I want to reform the kitchen of my rented apartment. Can I ask the owner to lower my monthly payment?

    In principle, yes. The Government has announced that the new law will allow the improvements made by the tenant to apply to the payment of rent.

    I am renting an apartment. To what extent the changes affect me in the law?

    The government wants to give freedom to home and tenant to sign the contract on the condition that most benefit both. So far, the annual review of rents should be made mandatory by reference year inflation. Under the new law, landlord and tenant may agree other review mechanisms. Moreover, so far, if the landlord put the property up for sale, the tenant had a right to take priority and essential to housing by the price at which it had been offered to a third party. The new law will allow the tenant to waive that right, “and get a lower rent for it,” according to ministry

    Another article: http://www.idealista.com/news/archivo/2012/09/06/0508859-pastor-presentara-en-el-congreso-el-nuevo-plan-de-vivienda-en-septiembre

    I haven’t read the details myself, just heard a few news reports where they were saying that part of the problem is Spain is that it is difficult to move with your work – or for work – especially for short periods because it’s hard to find rental accommodation. They think that there’s so little rental accommodation because of the risks associated with being a landlord.

  • #112486
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    Anonymous
    Participant

    This looks quite a good effort on the part of the Government Chopera.Most useful information!.l If I am reading you right it means you can let your flat and provided that you state in writing at the outset you want it back in the future for your own or other residential use you can give two months notice to recover it. My observations on that are initially if such application may be frustrated if the rental contract is registered at the land Registry – and still liable to extension in favour of the tenant presumably one has to avoid that. I also thought that one might need to consider whether one lets for a fixed period or simply a periodic basis ie let at Euros per Week or per month with no end date other than the statutory 2 months notice -this would be quite acceptable to many prospective tenants and not very encumbering for the landlord/owner.

  • #112499
    Profile photo of DBMarcos99
    DBMarcos99
    Participant

    Article in the Telegraph on buy-to-let changes in Spain (but ignore the last few paragraphs which just seem talking-up blurb)

    http://www.telegraph.co.uk/finance/personalfinance/offshorefinance/9568037/Spain-encourages-buy-to-let-investors.html

    New legislation is in the pipeline which gives more power to landlords. These include giving tenants just 10 days to pay their arrears before being evicted. Property owners will also be able to regain possession of their home after two months’ notice.

    A further proposed change will cut the tenant’s right to live in the home down to three years with an extra one year’s agreed extension, from the current five years plus a three-year extension.

  • #112501
    Profile photo of Anonymous
    Anonymous
    Participant

    The people I know had the tenancy agreement signed with the clause saying that the owners may need the property back for their own use blah blah….

    It didn’t help when they stopped paying the rent after a few months and it then took over a year to get them out. The duplex was in a disgusting state when they finally got in.

    I’ve heard it’ll cost nearly 3000 euros for the whole court case to get them out of your property. And still take quite a while, especially if the tenants have children (which it seems most scammers have sussed so they’ll seem like a nice family etc.). With children in the place it makes it very difficult for the police to get them out.

    I guess renting to holiday makers on week/fortnightly basis would be easier but renting to someone long term still is very risky. What about renting to one guy who then lets all his friends move in and then the first guy leaves, then the contract is with someone who isn’t inside the property.

    Spain is not like the UK so buy to let is still something only for those who have a team of heavies on hand for speedy eviction!?

    ps, an Ecudorian family are still living two years later in a Bar/Restaurant they paid only 3 months rent on. The bank have repossessed the property, the electricity and water were cut off but they went out and reconnected with different companies and are still running a bar right under the noses of all and sundry. When the Brits had the place they needed licences and permits left right and centre…..and the police were always checking up on health and safety etc. Now they don’t seem to care if it’s open for business or not. A sign of the end of the boom where if there is not money to be made then don’t bother?

    So for me, the idea of trying to get buyers into Spain as investors is good….but I doubt that it will work because their way of life isn’t the same as the UK where youngsters are out of their parents house at the age of 18. In Spain they are moving abroad for work but if they go home to Spain it’ll probably be to their parents place rather than renting.

  • #112504
    Profile photo of katy
    katy
    Spectator

    Itsme, agree with everything you say. In coastal areas there are people who know the law exactly and have no intentions of paying after a few months. Lots of friends have been stung, we were once. (did us a favour though as we sold it at the top of the market.) Unfortunately the “heavies” are the only answer.

    Rent to Spanish and you will be lucky to get them out for years. A friend rented to a spanish family spent thousands to get them out. Not only was he not receiving rent, he was ordered by the courts to pay the water and electric bills when they stopped paying them 😯

    Another friend rented to a british couple who not only stopped paying the rent but sub-let the place with a false contract. That took years to solve too. New law sounds ok. in practice but I doubt there will be much difference

  • #112506
    Profile photo of Chopera
    Chopera
    Participant

    That’s why I’d be more inclined to rent out parking spaces instead flats in Spain – clamping a car is a hell of a lot easier than evicting someone, and it’s pretty hard to trash a parking space! Also the owner doesn’t end up paying for things like gas, electricity, etc.

    The government in Spain might be making the right noises, but it simply hasn’t got the resources to implement these changes. As soon as they become law the courts will be inundated with new eviction cases that will take ages to process. Maybe in a couple of years time things will settle down and long term lets might become less risky, but I’d like to see it first.

  • #112508
    Profile photo of katy
    katy
    Spectator

    Good idea Chopera. One of our neighbours grew very rich by buying up locales with his redundancy money. Many businesses only lasted a season and there was a premium everytime the lease changed hands.

    There was an old woman in the mountain village of Benahavis (a popular place to eat). She used her small garden as a car park. Not a fortune but she got around 12 cars in at 3€ each and as parking was virtually nil in the centre it was always full 😀 Nice bit of pin money for a pensioner!

  • #112510
    Profile photo of Chopera
    Chopera
    Participant

    Katy – it’s only through first hand experience that I’ve come to realise this. The urbanización where I live was built in the 70s and the builder got into financial trouble so they decided to quickly sell off the parking spaces as one block. Someone bought them all and now rents them out to people like me for €120/month. I guess there are about 100 spaces with say 70% occupancy – so that’s €8400 rolling in each month. His only overheads are paying a guard at night time, and the electric lighting (he never bothers to clean the car park – the floor is filthy). The parking spaces are in central Madrid so they are at a premium, and people who need to park close to their flat have no other option than to rent one – he has a monopoly.

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