78
78

Merits & Demerits of Lease Registration

21/03/2014 – Cinco Dias

The latest reform of the Law for Urban Rents (LAU from Spanish) promotes rent rather than home purchase. Leasing is gaining ground in Spain, mostly due to the economic circumstances. Besides, a mortgage remains beyond one´s reach. No matter whether you are a landlord or a tenant, rental contract registration could protect you from the third party.

In order to enter an agreement in the registry, one has to take several steps. Firstly, have a notary re-qualify the agreement from being private to the public status, and make sure they issue adequate public documentation. (…) The service price ranges in reference to the monthly rental payment and the tenancy duration and includes taxes (basically stamp duty). Altogether, the minimum price would be equal to €150 if registry costs excluded (for an agreement for €900 paid during 3 years the fee would be of about €70 + VAT).

When it comes to advantages such process could bring to a tenant, one may be calm that the owner is the real possessor of the house and that the rented unit is exempt of charge. The argument seems trivial but in fact it is crucial in case of mortgage deliquency and therefore seizure of the property. Also, the registration protects the tenant if the owner decides to sell the dwelling to a third person (a very frequent practice during the recession).

On the other side, at registration the landlord may include in the contract as many terms and conditions as they wish. Obviously, all of them must be notified to the leasee. Moreover, now, in case of lack of monthly payment the situation shall be justified (the tenant has got 10 days for that). When neither explanation nor response to legal obligations given, the landlord is allowed to evict the leasee. Before, this process has been much slower (…).

According to notaries, since June 2013 the number of registered agreements shot up by 18%. (…).

 

 

 

Original article: Cinco Días (Raquel Díaz Guijarro)

Translation: AURA REE