If you own or intend to buy property in Spain, you may wish to consider letting to get a return on your investment and earn extra income.
Letting property need not be a headache, if you do a little homework first. Cautionary tales of troublesome tenants abound, but if you, or your estate agent, carry out a little research into prospective candidates before handing over the keys, it should be a hassle-free, and potentially profitable, experience.
For less than 10€, the national online database of non-paying tenants (fichero de inquilinos morosos, www.fimiberica.com) can tell you if a potential tenant is a reasonable risk, based on previous rental contracts. If he or she has ever been involved in eviction proceedings, has left rent unpaid, or had complaints registered against his or her name anywhere in Spain, a FIM report should flag this.
We recommend you always ask for references from tenants to confirm their ability to pay.
Some landlords ask for a bank guarantee (aval bancario) from prospective tenants as a means of insuring rent payments will be covered for an agreed period, in case of default. The landlord appears as the beneficiary of the guarantee and can execute in case of non-payment, requiring the bank to make payment immediately.
Bank guarantees should not replace eviction proceedings, in case of non-payment, but should be used as a means to recover lost income after eviction.
The downside is that bank guarantees can be expensive to set up, due to bank fees, notary fees, and interest, and tenants may be unwilling or unable to deposit a sum equivalent to various months’ rent in an account which they cannot access.
Energy efficiency certificate (Certificado de Eficiencia Energética, CEE)
According to Spanish law, to rent property you need to have an energy efficiency certificate, stating how much carbon dioxide the property emits a year, based on heating, cooling, and other energy use.
You are free to choose who issues the certificate, but it must be issued by a registered inspector (many of whom are architects and engineers). There is no fixed fee for an inspection, but costs are typically around 1€/square metre. Once issued, a certificate is valid for 10 years. If you fail to provide a certificate when renting a property, you may be liable for a fine of 300-6,000€.
Under Spanish law, landlords are required to maintain the property in a fit and habitable condition and undertake any major repairs necessary, but are not responsible for any damage caused directly by tenants nor for small repairs resulting from daily use.
A tenant may undertake urgent repairs to avoid damage to the property with the landlord’s consent and any costs arising from these and paid for by the tenant must be reimbursed by the landlord.
If a landlord deems it necessary to undertake repairs that cannot reasonably be deferred until the contract has terminated, he or she must provide three months’ notice in writing of his or her intention to carry out such work.
In the case where repairs are not subject to this period of notice, the law stipulates that they should be carried out in the shortest timeframe possible.
A tenant may then rescind the contract within 30 days of receiving notice or may negotiate reduced rent, depending on the area that will be affected due to repair.