Rentals O.C. Renting your property or renting a property.
Property rentals is BIG business on the Orihuela Costa. The amount of holiday lets available in the area is astounding. If you are a property owner and whether you choose to rent out you property as a holiday let, through an agency or by your self..... or as a longer term rental, you need to be made aware of your obligations and the rights of both parties in rental contracts.
BUT, many property owners, who buy investment homes may not be aware of some of the points of law associated with either short or long term peoperty rentals.
Questions like:-
Do I have to pay tax ?
What are the rights of a tennant in a long-term rental situation ?
How does either party terminate a contract ?
.all seem to be blissfully ignored and sadly, ignorance does not catapult you to safety from the long arm of the law.
Spanish law decrees that a rental contract is firstly and foremostly goverend by the cotract agreed by landlord and tennant. If no format contract has been drawn, then the Laws of urban lettings apply (you can enquire at the Town Hall about what these are).
Here on the Orihuela Costa and the Costa Blanca, property rentals generally fall into 2 categories (these are the general terms):-
1. Short Term - Up to 1 year in duration (usually for holiday lets)
2. Long Term - 1 year duration or longer.
Contracts normally will contain the following information (these mainly apply to longer term lets):-
- Details of the landlord and the tenant
- Description of the property (& possibly furnishings etc)
- The terms of the contract (length etc)
- Payment terms of deposits (normally 1 months rent in advance) and rents and frequency (mostly longer term lets)
- Inventory at start of rental term
- Any other legal provisions that the parties agree
- Notice periods of both parties should one wish to terminate
Information - Landlords.
If you own a property and are renting out, there are certain obligations that you must fulfil to be a landlord. These terms described below are very general. Always check with the Town Hall, your accountant, or letting agent about the current laws, as they are liable to change:-
- Register at the Hacidenda -
You should be registered as a landlord at the Hacienda (Valencia). Renting property is income and you should be paying taxes. If you do not and get caught, you could be fined, or worse. - Know the rights of the tenant -
Spanish law is favourable to protect the rights to have a place to live. Make sure that you know your tenants rights before you decide to let. knowledge is power and knowing this may save you heartache and expense. - Display the Community Rules -
IF your property is in a community or urbanisation, you have the responsibility to display the rules of the community (this is very important, especially with holiday lets).
You may be liable if complaints are raised with regard to your tenants and you could be fined if community rules are constanlty broken by your tenants. - Taxes
The tax due on your rental property (either short or long term) is approximately 24%.
Contact an accountant for details. - Agencies -
Using a letting agent can be a great way to let your property or properties. Remember that they take a fee and ultimately, as the property owner, you still have liability for any unresolved issues.
Shop around, ask people you know for recommendations before signing a contract with an agent. That way both parties will have full understanding of roles and responsibilities.
Information. Tenants.
Whether you are on a fortnight's holiday, a longer business stay or you are living and working on the Orihuela Costa, you need to have certain information to make your stay pleasurable and hassle free.
- Know your rights
Like landlords, know what your rights are, get a contract and stick to the contract. The law favours the rights of tenyants, but this does not give you carte blanche to make a mockery of your agreement.
Remember, a rental agreement is a legally binding document. - Community Rules
If you are in an urbanisation, be aware of the Community Rules and obey them.
They are a part of Spanish law and can be enforced if needs be.
You also do not want to cause un-necessary bad feeling with your neighbours. - Holiday Lets.
If you are on a holiday, please remember that if you are in a private residenclai urbanisation, it isn't a holiday camp. People live and work there.
Please exercise a bit of respect for community pools, gardens and the residents. You may be on holiday, but they are not. - References.
You will almost certainaly be asked for references, especially your Banking ones (an Aval Bancario, which you will most likely need to pay for).
Make sure that you know what you need to provide.
Rental & Maintenance Agents
Above, we briefly touched upon using agencies to let and maintain your property, particularly if you are letting for hoidays. A good agency will provide you with a professional service and maintain your property to a high standard, address any niggling issues with holiday tenants and generally assist you to avoid the hassle from your tenants at all hours of the day (and night).
The Pros:-
- Everything is done for you from the agreement to cleaning up afterward.
- There is someone available locally, should problems arise ( remember. many landlords live in another country).
- You are kept aware of the standard of your property.
- You have regular security checks on your property.
- Fees are generally reasonable.
- Many of them will actively promote your property and seek rentals.
The Cons:-
- You may be with more than one service (e.g. a rental website in your own country & a management company here)
- Less income for you
- They may not be as honest as they seem
- It has been known for agents to let without your knowledge
Although we have listed these points above, there are many possibilities to consider if you are thinking about renting out your property on the Orihuela Costa or anywhere else for that matter.
Choose a reputable company, ask for references, testimonials and get a contract drawn if necessary.
Remember, at the end of the day it is your property and even if you have a rental or management company involved, you are still the property owner, profit OR loss.
NOTE:- The information provided here is very general. Always do your homework BEFORE deciding whether or not to rent your property.
Check with the Town Hall about up to date laws and the obligations to be undertaken by all parties concerned, landlord, tenant or rental or management company.
That way everyone will know what is required of them and everyone can look forward to good business relaionships, a trouble free tennancy or a great holiday.
