Many people who want to live in Tenerife long-term rent a property here before buying. This is good practice, because there are so many variables in terms of dwellings and areas, and many people commit to a purchase only to find that they are homesick, or their circumstances change, within a year or two and they are then left with a property to sell in what, particularly at present, might be a difficult market.
If you are using an agency, view the widest range of properties. There will inevitably be much doubling up of properties, with owners putting their properties on the books of as many agents as possible to secure a tenant. Check that the property you are considering isn’t on other agents’ books: it might be available at a lower rent. You can also rent privately, and should look out for signs saying se alquila, which means “for let”. Don’t be afraid to ring these numbers thinking the landlord is going to be Spanish. Many English owners will use them too because they will be hoping to attract the widest possible range of enquiries, from prospective Spanish tenants as well as English.
When renting, you should be aware that there are two types of rental contracts here: short- and long-term, and the length of a rental contract will vary depending on which it is. Long-term contracts (contrato de arrendamiento de vivienda) are, properly speaking, the only formally-understood residential lets, and are for a minimum of one year. The tenant is protected by law to a very high degree, including having the right to renew the contract for up to a further three years, with rent increases at no more than the rate of inflation.
Owners often do not enjoy the prospect of such a highly legally-protected tenant, however, and so short term contracts (contrato de arrendamiento por temporada) are common, running normally for three or six months. Note, though, that these contracts are expressly for a specific purpose, e.g. temporary work placement, study, etc., and not for habitual residence – nor holidays: indeed, the tenant’s primary and habitual residence must be detailed on the contract. Note, too, that although these contracts can technically run for a period even as short as one day, anything under three months will be deemed as touristic by the Government, and touristic lets are banned on residential complexes, and on touristic complexes unless done through the registered on-site sole agent. Given these provisos, temporada contracts are perfectly legal, though the Courts can change a short term contract to a long term one if the tenant requests it and can show that the property has become his or her habitual home. This is to protect tenants from landlords who give repeated short-term contracts in an attempt to avoid passing on the legal protections that long-term contracts bestow.
To be fully legal, contracts must be signed by landlord and tenant, and contain ID numbers (NIE for foreigners) of both. Strictly speaking, rental contracts should be signed before a notary and registered at the Spanish Land Registry (Registro de la Propiedad), but the reality is often much more informal. Along with the contract you should get an inventory of items in the property, and the condition they are in. Check these thoroughly, because if there is any discrepancy, it is likely to involve a deduction from your deposit when you leave. If there are any marks or damages, particularly if these are not specified in the inventory, take photographs, and resolve the issue as early as possible rather than waiting until you vacate.
You can expect to pay your rent in advance, and therefore the first month’s rent will be payable when you take possession. You will almost certainly also be asked to pay a deposit which will be held against any damage or debt incurred during your tenancy – note that landlords may not keep deposits or make deductions from them for cleaning or redecorating after a tenant leaves, and any deductions made must be detailed in writing, with justification, and must be agreed by the tenant. Equally, if repairs or justifiable expenses exceed a deposit, then the tenant must pay immediately. If either side fails to comply with these requirements it is a matter for legal action and the courts.
If all is well, however, then the deposit should be returned immediately, and if not repaid within a month, will attract legal interest. The deposit may be called a deposit or a bond, or in Spanish, fianza: article 36 of urban letting legislation says that a deposit equivalent to one month’s rent is a legal minimum for long-term rentals (the requirement is two months’ deposit for uso distinto, i.e. other than for living in, e.g. a business), so the landlord is required by law to ask for this, as is the tenant to pay it.
I am sometimes asked about agents putting up rent, and the matter of increases is straightforward. First of all, it is only in long-term, i.e. renewable, contracts that the issue arises, because short-term contracts aren’t meant to be renewed, at least not for residential purposes. So, if a contract is a long-term one, rent increases are governed by legal limits. Short-term contracts are, by legal definition, one-offs, and so a subsequent short-term contract is an entirely new legal contract and so there is no question of an “increase”. As such, therefore, any “increase” is just really defined, legally speaking, as a “different” amount rather than an “increase” of the rental. Long-term contracts will have increases, legally formatted, as part of the contract itself.
Sometimes prospective tenants are asked for a deposit of more than the equivalent of one month’s rent, but this is uncommon, and if you are prepared to consider it, make very sure that it is in fact for a refundable deposit, rather than a non-refundable agent’s administration or contract fee, which is a frequent charge when using a rental agent. It is important to determine the nature of all monies handed over, and for them to be specifically identified in the contract, along with the fact that they are refundable. Needless to say, you should get individual receipts for all monies handed over, whether deposit or monthly rental payments.
Some rentals include a certain amount for utilities usage, often up to around €50 or so per month, with the tenant paying any extra when the bill arrives. Apart from electricity and water, however, landlords themselves normally pay the rates (IBIs) and the community charge if the rented property is on a complex. Clearly it is important to know in advance what commitments there will be for ongoing expenses in addition to the rent, and these should be clearly detailed in the contract. Generally, however, the landlord should be expected to cover the IBIs (rates), community fees, basura (rubbish), house insurance and maintenance costs, whereas the tenant should anticipate paying metred amounts for utilities such as water, electricity, gas and telephone. In the event of breakdowns, the landlord is usually responsible for washing machines, boilers, etc. (unless the breakdown is very minor or the result of damage caused by the tenant), and the tenant for any damage s/he has caused or which has resulted from general usage (e.g. a broken window or a blown lightbulb), and tenants are recommended to take out their own contents/accidental damage insurance for such eventualities, as well as for cover of their own possessions. While speaking of utilities and the like, it is worth mentioning that from 1 June 2013, owners are obliged by law to provide a copy of an energy certificate for the property to all new tenants – existing rental contracts are exempt from the law (see HERE).
When leaving a rented property, tenants are required to give the period of notice stipulated in the contract. Under legislation which came into force on 6 June 2013, however, they will be able to terminate a contract without having to pay compensation by giving just one month’s notice, providing that they have had the contract for at least six months. Similarly, once the property has been let for a full year and the contract has been renewed, the owner of the property will be able from that point to recover it for use as a main home with notice of two months: legally this means that the owner must move into it and stay in it for at least three months, and cannot just allege they want to live in it in order to get the tenant out in order to sell it. In reality, of course, it will be obvious to an occupying tenant if the owner is trying to sell the property because viewings will need to be arranged!
Tenants can also be evicted, of course, and the usual reason is for non-payment of rent. It is important to be aware that even if you feel justified in withholding payment, e.g. for requested repairs that have not been carried out, the law expects payment to be made and for the claim then to be dealt with separately. To date, tenants have been able to avoid eviction by paying rental arrears just before a Court hearing, at least on the first occasion, but under the 2013 legislation I mentioned above, landlords will be able to apply for eviction in just ten days if rent is outstanding. The Courts will grant the order unless the tenant can present satisfactory argument for non-payment – which would be difficult to do, evidently. Apart from non-payment of rent, a tenant may be evicted for sub-letting, using the property for a purpose other than living in it, intentionally damaging the property, or carrying out noisy, dangerous or illegal activities. Anyone who is evicted under these terms of the new law will, moreover, be recorded in a new rent debtors’ register which will be made available to landlords to check prospective tenants, so clearly it is to the tenant’s advantage to leave on good terms and with no outstanding issues if at all possible.
Please use the comments box below to ask any questions relating to the above, but please do not use it to seek or offer rentals, or ask for recommendations for agents. There are more agents here than one could begin to list, and I would think that in the main they are pretty much as good and effective as each other. All due caution is necessary, as always, in any transaction here, and independent advice on contracts signed and monies handed over is essential.
Finally, please see THIS page which details the specific letting framework for owners in the Canaries.