Standard Terms in a Rental Agreement

If you are looking to rent a property in Lanzarote, you will be required to sign a rental agreement.

Following here are some standard terms of a rental agreement in Spain.

This is written as a simple overview and one should never presume that all contracts say the same. But most of the points contained below are found in a standard rental agreement.

It is always advisable that you request a contract with the clauses translated or ask someone to explain the document before you sign. Many people are flippant about these agreements, but they are legally binding and should be treated with the seriousness they deserve.

The following descriptions are not necessarily what the tenant may be presented with, and all of the usual areas covered below may be modified.

Every contract must contain the following –

Details of landlord and tenant.
Description of the property
Full name and DNI, NIE or Passport number. (Should be accompanied by a copy of photo ID of the tenant)
The contract terms
Rental cost each month and how this will be paid
The Contract will then go on to outline the responsibilities and terms of the agreement.

Property for sale

If the property is for sale then usually a clause will be included stating this intention and also outlining the tenants right to first refusal, the tenant must make the property available for viewings, usually a 24 hour notice minimum must be given. If an offer is made on the property the tenants have the right to match this offer and purchase themselves.

If you are renting on a long term basis then the new owner is obligated to keep the tenancy in place, unless specified otherwise in the agreement, some may offer an amount as compensation should the property be sold and the tenant is asked to leave.

The distinction between long and short term contracts

This is an important difference and it’s crucial that you understand the differences.

Short term contracts mean the tenant must vacate the property at the end of the term; the term can be up to one year. This type of lease is the norm for holiday lettings.

Long term contracts are for a term of one year plus, the lease is automatically renewed unless the tenant gives notice or the landlord specifies in the Contract that he needs the property back at some point, this must be written in the agreement though. Otherwise provided the terms are met the tenant may stay for five years. This can be renewed again after the initial five-year term.

Deposits

Usually one month’s rent, the contract serves as receipt of this payment and you will not usually receive your agreement unless you have paid this amount. The deposit is returned to the tenant when they vacate providing the terms have been met. You may not use the deposit as rent under any circumstance.

Rent

Usually, the tenant is allowed between five and seven days to pay the rent each month, usually between the 1st day of the calendar month and the 7th. The contract ought to state where the rent is to be paid and how, usually a bank account will be provided.

The rent can be increased in line with inflation, some contracts include this clause others do not, many landlords do not ask for these price increases until a contract is renewed or renegotiated though.

Bills and Expenses

In most cases the landlord is responsible for the property taxes and rates (community fees and rubbish collection etc). The tenant must pay the water and electricity and phone if one is provided. This can differ and its essential that the clauses are agreed beforehand and included in the
contract.

Maintenance

As a general rule, the landlord is required to make sure the house is fit for habitation and must maintain the property; tenants are responsible for minor wear and tear and any breakages.

Major works are not permitted unless the landlord agrees on this with the tenant prior to anything being carried out. Sometimes people will have specific works agreed that they will carry out in exchange for a lower rent perhaps and these must be listed and agreed with the owner a formal document or inclusion in the contracts is strongly advisable.

Sub Letting

Not usually allowed unless stated otherwise.

Ways that a contract can be rescinded

If the tenant breaches any of the clauses, i.e.

Causes major damage to the property
Causes problems to the neighbours
Undertakes work without permission
Sublets without permission.

If the landlord –

Allows the property to become uninhabitable and does not carry out necessary repairs.

In the main, tenancies run smoothly provided a good line of communication is in place between the landlord and tenant, if the language is a problem then ask for help, if you use an agent then ask them to assist. The common goal after all for both parties is to have a quiet and happy tenancy! But a good starting point is to understand and agree on the responsibilities on both parts.