Rent contract: what should you know?

If you want a property up for rent or you are looking to rent a flat you will have to go through a rent contract. It is an administrative document undersigned by the property and the tenant that regulates the price and increments, its duration, the deposit and other important aspects to take into account. In this article we are going to focus on the details to have in mind when doing and signing a contract. There are different rules that regulate the renting contracts in Spain. The last modification was approved under royal decree in March of 2019 and became effective in April of the same year.

As in any contract, this one also includes in the first place the property owner information and the tenant’s. It is added the exact information of the property and its identification. The duration of the rent is established by both parts but the tenant has the right to extend the contract up to 5 years (up to 7 if the owner is a company or entity). There are no criteria to determine the price or rent, it depends on what both parts agree. But it is expected that the price increases each year according to CPI (Consumer Price Index). One of the new modifications of the royal decree is that it is expected to deliver one-month deposit and a maximum of two more as an additional guarantee.

The rent contract will also include all the agreed clauses. In case of contract termination: to avoid an automatic renewal, the owner must notify with a minimum of four months beforehand and two months in case of the tenant. Another modification of the royal decree is that in the eventuality that the owner sells the property, the tenant has the right to remain in the house until the end of the contract (some time ago the contract was extinguished when the sell was effective). It will also have to be in the document the possibility of extinguishing the contract if the owner or a first-degree relative needs the property to live.

Another important detail that must be on the contract is the distribution of the expenses generated by the property. Usually, the owner pays taxes such as property tax or IBI, homeowner’s association tax or the home insurance of the property itself and everything inside that owns, registration of supplies and the expenses for conservation of the property and its spaces. While the tenant will be paying for the supplies, the tax on property transfers, small daily repairs, the assurance of everything inside the property that owns and the waste charges.

Whatever the case may be, we recommend you to read carefully all the document because, once it is signed, the contract will be the one who determines the relationship between both parts. In case of doubt, the best solution will be to resort to an official organization or professional office that will be able to act as consultant.