Terms and conditions that a lease contract must contain.

We must ensure that our lease contract contains the terms and conditions necessary to cover us against any disagreement. Here are the main recommendations to consider:

Key terms to consider in a lease contract

There are a number of key terms in any lease contract that the landlord must consider and negotiate with the tenant:

Tenant details

The landlord will want to get referrals and financial information about the tenant to make sure he can pay the rent. You may ask the tenant for information to confirm, for example, a guarantee, payroll or copy of the bank statement.

Details of the property. Special reference to Inventory

All details of the property (size, destination, use, accessories rights…) must be included in conjunction with the additional rights that the tenant will grant to the landlord. For example, the right to park a car or access to an adjoining store. It is worth noting the importance of the inventory in this sense, since if you don’t write it, you can have difficulties to show of whom was the property of the goods that contained the building before the contract.

The rent

The rents are usually granted for an amount at the market price (depending on the situation and characteristics). This payment is made monthly or quarterly in advance. It is one of the terms obligated to appear in the contract. The rent could also be paid at the end of the lease contract, or the landlord may decide that the tenant has a free rental period (trial or compensation for works or services) starting with payments at a future pre-set date.

The contractors must decide which method of payment is best suited to their needs. If both agree to fix a bond, they have also to agree what will be the amount and conditions for the return of it.

The term of the lease contract

The time they agree will have a different duration depending on the needs of the parties and other clauses. An example is the termination clause of the contract, by which the contract terminates when certain requirements are not met. A short-term lease will usually last between 1 and 3 years.

The transfer and the subleasing

The Urban Leasing Act in article 8 contemplates the terms in which the transfer and subleasing are to be regulated, having the tenant, from the moment they agree to the transfer or subleasing with a third party outside the contract, the obligation to communicate it Immediately to the landlord.
  • In the event of a transfer, the tenant gives up his rights to a third party. This one will be responsible since the acceptance of the owner, of the lease contract and the obligations that were signed in it. 
  • In terms of subleasing, it should be noted that rented housing can only be subleased partially and prior written consent of the lessor
  • The rights of the person receiving the transfer or subleasing shall be those agreed in the main contract for the tenant who signed it, including the rental price and respective obligations.
  • In case of transfer or sublet of rent of commercial premises, the owner has in turn the right to increase the rent in:

– 10% If there is a partial subleasing of the local 
– or 20% if there is a total subleasing of the premises or a transfering of the lease contract.

Permitted uses and destination

Another of the terms that regulates the contract is the use of the property. This must be registered for the tenant to know what uses are allowed, as long as they are not contrary to the law. The landlord and tenant have the ability to negotiate on any aspect of the lease contract, including what rights and responsibilities they are obligated to (such as repairs, upgrades, works, tax payments, insurance, etc.).

Contract termination clause

The landlord has to decide whether he, the tenant or both of them will have the ability to terminate the contract. If they agree to a termination clause, the parties must set the date and pre-conditions for it to be used. For more information about termination clauses, consult with our specialist attorneys.

Rent with bail

If the landlord is concerned if the tenant will be able to pay the rent, he or she may request a security deposit.
The amount of the bail is negotiable, usually corresponds to the equivalent of one month’s rent. The amount to be paid must be recorded in the terms and conditions of the contract, or by attaching an accessory contract. This indicates the method of payment, return, and reasons why the tenant would cease receiving it (furniture breakage…).

Regulation of the lease contract

La Ley 29/1994 de Arrendamientos Urbanos tiene como objetivo proporcionar la equidad entre el arrendador y el arrendatario en la negociación de los términos de un contrato de arrendamiento, por tanto, todos los contratos de alquiler irán regulados necesariamente por ésta, salvo los que estén regulados por la Ley de Arrendamientos Rústicos.

Law 29/1994 of Urban leases aims to provide equity between the lessor and the tenant in negotiating the terms of a lease contract, therefore, all rental contracts will necessarily be regulated by this, except those that are regulated by the law of rustic leases.
To learn how to apply these Terms and conditions to specific rental contracts, visit our rental contract guides.