Non Permanent residence rentals

Table of Contents

Table of Contents

Rent for use other than permanent housing

Concept

A lease for use other than permanent housing is defined as one that, falling on a building, does not have as its main purpose to satisfy the permanent need for housing of the tenant and his or her family members.

The purpose of the contract can be as diverse as the parties agree.

In particular,  those leases that are entered into (LAU art.3.2) are included in this regime:

Seasonal, whether summer or any other (No. 1370); and

– For the exercise of an industrial, commercial, artisanal, professional, recreational, welfare, cultural or educational activity on the property.

Because they have these uses, for example, leases are included in this legal regime:

– Of a dwelling, if it is not used permanently;

– Business premises;

– Warehouses;

– For professional firms;

– For non-profit social, cultural or recreational activities; or

– For properties leased by the public administrations.

Normally, the main purpose of the property that constitutes the object of the lease is to operate or develop an economic activity (industrial, commercial, artisanal, professional, etc.), with the exception of those expressly excluded from the scope of application of the LAU (agricultural, livestock, forestry, etc.).

It is common to specify and delimit the activity to which the tenant is going to use the property. Likewise, it is common for the contract to provide that the modification of the agreed destination without prior written authorization from the lessor constitutes cause for termination of the contract. Failure to use the leased premises may also lead to termination.

If a specific use is not agreed, it is understood that the lessee can allocate the property during the term of the contract to which he deems appropriate.

Although the regulation does not expressly say so, it can be understood implicit that the property rented for use other than housing must meet the health and hygiene conditions  necessary for the exercise of the activity for which it is to be used.

Duration

The duration of the lease for use other than housing is left to the free will of the parties, since no minimum or maximum term is legally established.

Temporality is something inherent to the lease.

In general, the duration of the lease for use other than housing is usually longer than that of the housing lease, thus allowing the tenant to recover, at least, the investment made at the beginning of the lease in the works of its adaptation and conditioning.

In long-term contracts, a  unilateral right of withdrawal is usually agreed  for the tenant every certain number of years, a date that usually coincides with the date of revision of the rent at market prices (no. 1090).

Clauses are considered null and void when:

– Agree on a perpetual or indefinite duration of the lease, as it is contrary to the temporary nature of the contract; and

– They set an initial contractual term, but provide that upon termination the lease may be extended by the sole will of the lessee, because, in addition to being contrary to the temporary nature of the contract, it is contrary to the prohibition that the validity and performance of contracts are at the discretion of one of the parties.

In the absence of an express stipulation in the contract and given that the LAU does not establish anything in this regard, the provisions of the Civil Code must be followed. Thus, the lease is understood to have been made:

– for years, when an annual rent has been set, even if the payment is made monthly;

– by months when it is monthly; and

– by days when it is daily.

Rent 

Freedom of agreements. There is no type of condition or limitation when it comes to setting the rent between the parties.

Bail/Bond

The law establishes TWO MONTHLY payments of the rent set as a minimum.

Types

  1. Business/Professional/Comercial premises

The current regulations omit an express reference to the lease of business premises as such, it being understood that this concept is implicitly included in the category of leases that, falling on urban properties, have as  their primary purpose a use other than that of satisfying the tenant’s permanent need for housing.

On this basis, business premises can be understood as the building or part of it of an urban nature, which meets the precise conditions to be used – at least primarily – for the lessee to establish his business or professional activity  of a lucrative nature there.

 Distinction with industrial leasing

 The lease of industry is the contract by virtue of which one of the parties, in exchange for a consideration, cedes to another  the operation of a company, understood as an economically productive organization, made up of a set of material and intangible elements, necessary to develop said exploitation.

While in the lease of a business premises the real estate element is transferred, i.e. only a space built and suitable for the business to be exploited, in the lease of industry the contractual object is made up of two elements:

– on the one hand, the premises, as a material support; and

– on the other, the business or company installed and developed in it, with the necessary elements for its exploitation, forming a patrimonial whole.

Premises located in a shopping centre, department store or other establishment

 Although in principle it is a lease for use other than housing, it has a series of peculiarities that make it a somewhat special lease: non-direct access to the premises; opening and closing hours; use of the common elements of the centre; etc.).

Although these circumstances mean that specific clauses are included in the contract, by virtue of the autonomy of the will of the parties,  which  are not usual in the rest of business premises contracts, this does not detract from the lease nature of the contract, provided that its object consists of the services inherent in this relationship.  in particular, the transfer of the use of a premises for the development and operation of a business, in exchange for a certain price set in money.

  1. Seasonal Rent

Seasonal rentals are included within the scope of the special legislation on urban leases, as a use other than housing.

In these leases there is a note of temporality that excludes the permanent use of housing proper to the LAU art.2.

Temporality does not derive from the agreed term, but from the purpose of the occupation. It is not the agreed duration that determines whether or not a lease is seasonal, but whether or not the lease is intended to satisfy a tenant’s permanent housing need.

This includes leases of housing for second homes, in which the lease can last one or several years. The main differentiating feature in this case lies in the fact that the tenant simultaneously uses another property to satisfy his permanent need for housing.

The cause of the temporary nature must be stated in the contract; the reason why the dwelling is occupied as a temporary residence must be real and true. It is not enough to conclude the contract for a short period coinciding with a season of the year to qualify it as a lease for use other than housing.

The practical consequences of considering a seasonal lease as a non-residential use are:

– As for the term of duration, seasonal leases end on the day set in the contract without the tenant being able to take advantage of the extension of the contract as is allowed if it were a housing lease;

– seasonal leases are governed, firstly, by the agreements reached in the contract and then by the provisions of the LAU art.29 to 35; on the other hand, although housing lease contracts are subject to the agreements, clauses and conditions of the contract, these must always be within the framework established by the LAU art.6 to 28;

– As for the deposit, in housing leases one month’s rent must be deposited, while considering seasonal leases for use other than housing, there must be two monthly rent payments that constitute the deposit (LAU art.36).

  1. Place for coworking

Co-working or coworking is a formula that enables a space for different creators to work saving the cost of their own premises, accessing instead a shared one in which several of them coincide.

Coworking spaces, therefore, are premises that offer basic services (connection to networks, physical workspace, etc.), and common services to professionals who settle in these premises to carry out their activities.

Coworking, as such, is a lease in which the person in charge offers this space that the coworker rents in exchange for a price, week or month.

The coworker may have access to other spaces within the organization: services, common dining facilities, meeting room, etc. These added spaces are subject to some indications that allow shared use of them.

From this lease point of view, it must be specified with absolute clarity which services are offered and which are not; what access the coworker has to them, and if these services are included in the price (rent) or are add-ons that the coworker must contract separately.

The relationship between the coworker and the person in charge is a purely commercial relationship and not of any other nature, since the coworker does not work for the person in charge, he is independent and acts on his own account. The person responsible does not obtain any benefit from the work carried out by the coworker beyond the payment of rent.

The tenancy relationship that occurs between the parties generates the typical duties. On the one hand, the organizer or lessor must make the contracted services available to them in working conditions, guarantee free access and permanence in the coworker’s facilities, carrying out all operations that ensure the suitability of the rented space or services, such as carrying out the pertinent repairs, or replacing damaged elements where appropriate,  etc.

For their part, the coworker or lessee must pay the agreed price, as well as use the rented space and services diligently. Otherwise, the coworker is liable for the improper use or deterioration that he or she may cause in a culpable way in the same or in the elements in it.

Likewise, the coworker must inform the landlord of any incident that prevents the provision of the service and allow those repairs necessary to keep him in the peaceful use of his stall.