Antonio Flores’ Blog

This title of this post infers the existence of a type of residential rental contract that lasts for 11 months, no more but no less. And to a certain extent, if you had just landed in certain parts of Spain and you’d met up with property professionals (real estate agents mostly) there would be no reason to not believe that an 11-month contract –short term or holiday rental- is distinct from a 1-year plus contract –long term-.

At the same time, there appears to be an informal network of non-legal practitioners who are routinely consulted by people with legal problems and have, by reiteration, created parallel pseudo laws (and even case law) that, quite simply, do not exist in real life. And the 11-month contract is one ‘legislative’ creation of these “Costa” lawmakers as it does not exist as a standalone contract type. 

The following bullet points will help understand the current situation with urban rental contracts:

• There are only 2 types of urban rental contracts: residential rental contracts and non-residential rental contracts (which includes short term/holiday lets, commercial, etc.).
• Duration of residential rental contracts can be freely agreed between the parties. If the agreed term is below 3 years, the contract will be automatically extended on expiration of contract term unless the tenant submits notice of termination of contract with at least 30 days.
• The above rule is mandatory and cannot be waived by the parties by private agreement.
• Many residential rental contracts are disguised as short term, and consequently many short term contracts will be treated as residential by the Courts.
• The Spanish Supreme Court has stated that irrespective of the name given to the contract or the term agreed by the parties, if the tenant had a requirement for a habitual and family domicile to take care of his/her permanent and essential needs (and that of the family), the contract will be deemed residential and therefore the 3-year rule will apply.

Likewise, the short-term nature of the contract refers to not the duration but to the reason and purpose of occupation of the property, it being determined by its brevity.

Means to prove that a short term contract is in reality a residential one are, for example, the tenant(s) having a job wherever he/she lives or running a company, children’s school enrollment, registration with the Town Hall (‘empadronamiento’) etc.

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Great day yesterday in the office with James Scurrah, from Marbella Property Co, and Luis Ruiz, from TrecMedia. The purpose of the get together was to film 15 or so videoblogs in respect to matters pertaining to investing in Spain, property costs etc.

1. Anyone in the world can freely buy a property in Spain; there are no restrictions to any nationality nor a special permit is required. All you need is a valid passport, money and an NIE number.
2. Get a lawyer to represent you as not only does his/her expertise be very useful to ensure a safe outcome but also, they have mandatory professional indemnity insurance in case something does not go plan.
3. If you take out a Spanish mortgage, keep in mind that if you default, you will not be discharged from the loan by just “handing the keys back”. In fact, the bank can chase you in your own country.
4. If you are buying a finca, villa or any other form of detached property, a survey can be very useful to know where the boundaries lie and whether extensions built on the property require registration, in addition to what a survey normally does for you. In Spain, valuations for bank purposes are good enough because they include a survey. However, if you want something more specific and in English, you can hire a UK-registered surveyor, for instance, SurveySpain.
5. Ask about potential inheritance taxes (IHT) before buying as these are very different from the UK but also, each region within Spain has its own specific regulations. Splitting ownership with your inheritors will significantly reduce your exposure.
6. Draw up a will once you have completed on your property. This will avoid having to go down the grant probate route as inheriting will be a relatively straightforward matter.
7. Open a bank account to arrange a standing order payment for your utilities.

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