Long term letting
 

Hello,

We have the opportunity to purchase the appartment next door to some UK friends who have a holiday home in Spain in Valencia province. We aren't in a position to reside in Spain just yet, or even to use it on a frequent basis, although we hope to in future.

Would it be possible to purchase and subsequently let on a long term lease, for perhaps 3 or 4 years? Would there be any downsides to this, such as ever getting the property back, or punative taxes as a non-resident landlord over the period.

I'm aware that Spain is becoming more socialist and, spurred on by political rhetoric, the authorities have an increasingly cavalier attitude to property rights.

kind regards

Re: Long term letting
 

Obviously it's doable but Spain and renting is not as easy as you may think. People not paying rent is very common as they have good legal protection. That and the fact that you will need someone to check up on things makes it risky. Plus if you rent you won't have access to it for years by which time it's a bit of a chain round your neck. There will be plenty of opportunities in the future so I would wait.

Re: Long term letting
 

Probably good advice thanks. Agreed it seems a lot less investable than it used to be whilst the political risks wash through over the next 2 years.

Hopefully (for some) that means lower prices in future, whilst retaining ones funds for growth in other assets over the interim. Currency risk being the one to watch.

Re: Long term letting
 

That is definitely good advice but I would say watch this space... The Sanchez coalition government is close to collapse and they can't pass any legislation. It's highly unlikely they will last another two years and it's highly unlikely Spain will elect another socialist/communist government into power. It's mostly the communists who are responsible for the dreadful property laws but PSOE are not much better. PP and Junts managed to get some legislation through this year which gives property owners more rights with squatters. I'm a bit hazy on that but I think it's still going through and that is the general direction of travel.

If the apartment is exactly what you are looking for and a unique opportunity ie next door to your friends, I would buy it now and ask your friends to keep an eye on it for you. You can use it for holidays in the meantime and offer it to trusted friends and family to use. Obviously this is only viable if you can afford it but it's worth considering.

Re: Long term letting
 

Long term Tennants have many, many rights nowadays and if you get good tenants who stick to the rules and pay rent, etc on time then it would be very difficult to force them to vacate the property. After all, it has become their home!!.....

Steve

Re: Long term letting
 

Squatting laws have been introduced to protect property owners from squatters, making it much quicker for the legal process to remove them, but there is now a new menace - Inquiokupación - This is where legal tenants just stop paying the rent and it then becomes a real problem to evict them. Stringent vetting is essential, credit and criminal checks and proof of income etc, but even this may not be enough. Its one of the main reasons that it has become so difficult to find a long term rental.

Re: Long term letting
 

There was a recent local example of exactly this situation. A property owner at wits end with tenants who were six months in arrears with rent, kept promising to pay next week but never happened, promised to meet landlord then cancelled at last minute. The tenants were the owners of one of the most popular restaurants in our area and on the face of it a very nice young family. Were subletting to their waiting staff and generally not looking after the place. It got very public and unpleasant - unsure of the outcome.

Re: Long term letting
 

I believe, well it was when we were renting in Spain that 'long term rentals' were only for 11 months as if you did have one for 12 months, then you were entitled to continue to rent and couldn't be evicted

Re: Long term letting
 

As your friends only use their place as a holiday home (as you say) they cannot keep a good eye out for you all the time ?
There have been a number of horror threads on here over the past few years re-letting out and others regarding squatters.
Why risk your capital on such an unsafe option when there is Gold & Coin that is a great deal safer. (You did mention about this concern)

Re: Long term letting
 

Hi
Just my ten penneth, i have a holiday home which I have had for years. Squatters have become a much bigger issue over the last ten years. I leave mine empty obviously for 6 months a year, and nowadays I do feel vulnerable. I have cameras but I am aware I am a target, which when people ask “would you buy in Spain now as a holiday home?” I usually say no I wouldn’t, the cost of the property, 6 months only, risk of squatters etc

read a famous post on here from a poor guy whose property was taken by the tenant it went on for years!

My nugget of info is my very good friend in Spain, lives in a 2 bed flat in my area, which is coastal. The rental prices have gone through the roof and demand is high, her rent is low and she knows it. In other words she knows it could be put up 25% to go to market rate at any point. When asked what would she do, the reply is not “move inland” it is Squat, she would buy herself years more in occupation.

What would I do if I was you? If you are intent on buying it, and your friends would watch over it, then rent on the QT to U.K. people you trust. Everyone will ask you when you buy it, if they can rent it. Ask them for cash. There are issues with this as new laws may prevent this (block permission etc) but as long as they are not noisy stag and hens etc you may get away with it!

best of luck

al

Re: Long term letting
 

Good idea about renting to family and friends and even friends of friends on the quiet. There's no law against letting friends and family use your apartment and you can take cash.

For the OP this is a bit of a one off opportunity in a place they obviously know and like. Hopefully there will be a change in government in Spain soon and the laws on evictions, squatting etc will change so that is something to consider.

As someone who splits their time between Spain and Portugal, I have to say I would think twice about buying in Spain if things don't change pretty soon. The property laws are ridiculous and Portugal has far fewer problems on that front so now I would probably recommend Portugal over Spain and I definitely would if Sanchez gets into power again.

Re: Long term letting
 

Re: Long term letting
 

If you can't even safety let friends and family stay in the apartment then it really is a communist police state.

My revised advice to the OP is don't do it unless you are happy to have the place empty for the the entire time you are not using it and you are happy to accept that you can never let family and friends stay there.

Re: Long term letting
 

If various different people use the place it would be assumed that the owner is gaining an income from the property. In the case of an apartment it may well be against the rules of the building to be sub-letting it out. There are many, many ways that allowing others to use the property can be fraught with problems. The OP will need to weigh up how cost effective owning a place is. Non-resident tax would also need to be factored in.

Nothing to do with "communist police state", every country has rules on owning, renting out, taxes etc and each group of apartments will have their own rules too so it is not a straightforward question that anyone can answer easily or with any certainty

Rosemary

Re: Long term letting
 

Might not be any law but taking cash and not declaring it amounts to Fraud,
The other consideration is the flat will have a community, has the OP checked if sub letting (short or even long term is actually allowed?)
In our community holiday lets are forbidden and anyone who wants to rent long term has to get permission from the community.
We had an owner apply and get a tourist licence until someone complained and the council revoked it (they should not have given it in the first place) but the owner of the flat is 'friends' with our current mayor.
Short term and holiday lets are not allowed in our buildings due to the insurances we have.

I thought it was also against forum rules to suggest unlawful practices.

Re: Long term letting
 

All countries have rules and regulations surrounding all aspects of property but not even being able to let friends and family use the apartment is draconian.

It's up to the OP to decide whether or not they want to risk getting involved and invest in the apartment. I would advise caution and say if in doubt, don't do it.

Re: Long term letting
 

All of the owners meet and decide on the rules that they wish everyone to adhere to and often one of the rules is not to have loads of non owners living in the block. This is democratic not draconian. If the vast majority of the owners live there full time they will understandably not want the disruption of strangers in the building who may cause difficulties.

Rosemary

Re: Long term letting
 

In light of the above information, it's good that this issue has been flagged up on here and hopefully people will be aware that if they buy a holiday home in Spain, it's illegal for them to allow their friends and family to stay in the property and despite it being free of charge, they could face a serious fine.

I hope estate agents and lawyers make this clear to people before they purchase properties in Spain because it could come as a nasty shock for some people. I feel I should warn someone I know who lets their nephew stay in their adjoining apartment a few times a year. They are elderly and not well placed to deal with being prosecuted and fined.

This thread has turned out to be a useful warning to people.

Re: Long term letting
 

I think it's disingenuous to say the least to refer to "despite it being free of charge" when what was originally being suggested to the OP was renting the apartment to friends and family and taking payment in cash thus evading all kinds of requirements including paying tax on the income, needing a licence to rent out tourist accommodation, compliance with community rules, etc.

Re: Long term letting
 

Yes, that was indeed suggested further up the thread but it's moved on since then and what is important now is that people are made aware that it's illegal to allow friends and relatives to stay in their holiday home in Spain. Someone could buy a property in all innocence thinking their parents, siblings, children, friends etc could use it only to find themselves landed with a hefty fine.

This could well sway the OP's decision.

Re: Long term letting
 

Surely it is only illegal if you get any form of payment? as that would constitute a rental and require to comply with rental laws. If you take no payment whatsoever which law are you breaking,?

Re: Long term letting
 

I don't see why it's illegal to let family and friends stay in your home in Spain, it's not the same as letting your home to tourists. Even if you are renting your home, you can still do it.

Catalonia's tourist property definition is "A property is considered to be a property for tourist use when it is ceded by its owner, directly or indirectly, to third parties, in exchange for an economic consideration for a seasonal stay and under conditions of immediate availability", letting family and friends stay in your home doesn't meet that definition.

Re: Long term letting
 

Apparently it's illegal and someone further up the thread said if neighbours see different people staying at your property (house of apartment) you could be reported to the authorities and get a very hefty fine because they assume you are charging them rent.

There is also the issue of residents in apartment blocks (discussed further up) blocking rentals which includes non paying friends and relatives apparently. Even if there is no block on visitors when you buy the apartment, it is something that could happen later on.

I think it's important to thrash these things out on a forum like this and you have to consider the wider audience ie non members reading this who are considering buying a holiday home in Spain. They might think they can charge friends and relatives on the quiet (also discussed further up) or let their friends and relatives stay in their property free of charge but they are not going it risk it after reading this are they?

Personally, I think it's over the top but the most important thing is warning people before they buy a holiday home in Spain. Some people could come seriously unstuck.

Re: Long term letting
 

Yes i get that it may breach urbanisation or apartment block rules but that is different to being illegal as far as the law goes. Who visits someone's property apart from any specific urbanisation or Apartment block rules are the owners concern. I agree re checking specific rules re visitors etc if purchasing in an apartment block or urbanisation but that would be a civil matter not a criminal matter, that would involve the police or criminal fine unless someone can indicate the spanish law that would be broken
I would add yes seeing different people staying at a property may indicate it is being rented out. So yes authorities may enquire if thats the case but if proven no money has changed hands then that would be an end to the enquiry,

Re: Long term letting
 

Indeed, I would agree with that but I would also apply it to individual houses. A neighbour could see different people visiting and staying at the property and report it to the authorities. You then have to prove you are not charging rent and God knows how you would do that. Think of the stress and the hassle too. I wouldn't touch it with a barge pole.

Re: Long term letting
 

That would put an end to having proper house sitters who stay for a time whilst you are away, short term or long term, if it is illegal even when it is free..
Illegal if payment taken under the table, yes, illegal when no payment, no, but may go against community rules.

We used to often spend a long time away and had two break ins which resulted in us getting proper house sitters to stay in and look after the place when we need to.

Re: Long term letting
 

Exactly

Re: Long term letting
 

I believe the burden of proof in Spain is like UK the requirement would be on the prosecution to provide sufficient evidence to prove guilt , if its simply letting one use your property for free how could they do that? Its up to an individual to do what they want with their property so long as it is legal. As has been mentioned house sitting for someone is a good example as is a generous person letting family use their property . I am not suggesting anyone follow the comment about doing it all in cash as in under the table that is a totally different matter.

Re: Long term letting
 

I wouldn't necessarily bank on the law working in your favour. It's a completely different system ie Roman law in Spain and civil law in the UK. That aside, does anyone really want to go there? Why take the risk and put yourself on offer with shed loads of hassle.

Tebo's post resonated with me:

..

Think about all the checks going on in the background and imagine having the police knocking on your door or contacting you in the UK.

On reflection and having read the above posts, I would conclude it's more trouble than it's worth. So either resign yourself to never allowing anyone to visit/use your property in Spain or try Portugal which has different rules and is less restrictive.

Re: Long term letting
 

Having friends and family staying with you or in your first/second residence while you aren't there, having someone to house/flat sit, or home exchanges are all done by the Spanish and it shouldn't be any different for foreigners. Not sure how this thread has snowballed into this.

Re: Long term letting
 

It has snowballed because some statements have been taken and blown out of proportion and misunderstandings have occurred which has then caused an explosion of misinformation and conjecture.

Rosemary

Re: Long term letting
 

Well yes, it's come as something of a revelation to me. You certainly learn a lot on here and I had no idea about the strict rules in many urbanisations where it's prohibited for family and friends to use someone's apartment.

I was also unaware of the possibility of neighbours informing the authorities if they see different people coming and going from a property. It's not something I had ever considered but it's good to made aware of these things isn't it?

There seem to be a lot of background checks going on too. All this information is useful for people considering buying a holiday home in Spain including the OP of course.

Re: Long term letting
 

Maybe it should just be clarified that renting without correct licence etc hiding income from property rental is illegal. Simply allowing someone to use your property without payment isn't .

Re: Long term letting
 

I used to live in Singapore and they had a tendency of dealing with problematic matters head-on... and spot-on.

Too many people renting under the table without doing it officially? All properties are now taxed as if they are rented out... regardless of whether that's the case. Problem solved. Absolutely no incentive to hide anything since you're paying anyway...

Same with this airbnb bullcrap. Not allowed, done and dusted, ZERO holiday lets. Residents can enjoy life as usual without tourists invading their properties and using their facilities...

Re: Long term letting
 

It's the Ley de Propiedad Horizontal which regulates this. There may be limitations set for common areas, like swimming pools, if it's been put to a vote, but there's also the constitutional right to privacy and family life.

What's more likely is that some neighbour who doesn't like you may start saying your flat is a tourist flat and you're not there or you don't speak the language well enough to defend yourself.