Land registry: Register your rental and benefit from its advantages

Property Register 

The registration of a rented property in the Land Registry in Madrid brings a number of advantages for both the landlord and the tenant, i.e. the tenant. In this case, our aim is to focus on the latter and describe, in a clear and concise manner, the benefits that can be enjoyed by carrying out this simple action.

General aspects to take into account

The first thing we would like to tell you is that everything related to the registration of a rental contract in the Land Registry is reflected in Law 4/2013, on Measures for the Flexibilisation and Promotion of the Housing Rental Market in Spain. However, the possibility of making this deposit has been contemplated for many years, although now, thanks to this regulation, it has a series of advantages.

We must emphasise the fact that, as was the case before, registration in the Land Registry is not compulsory. However, from the moment of publication of the legal text in the Official State Gazette, it is highly advisable for both parties.

How is the registration of a rental property carried out?

In order to register any rental in the Land Registry it is necessary to carry out a simple process. Obviously, this will involve a number of formalities and costs. In this sense, the first thing that both parties must do is to contact a notary, who will be in charge of giving legitimacy to the signatures that appear in the contract. The price of this service can vary, but is normally around 10 euros.

The next step will take both the lessor and the lessee to the Land Registry in order to register the agreement in their database. In this sense, only one payment will have to be made at the beginning of the period of time stipulated in the contract, which will be valid for 3 years. Once this period has elapsed, this procedure must be carried out again from the beginning.

The cost of this last step is relative as it varies depending on the rent stipulated in the contract. However, it is not excessively high since, depending on the location, it is between 3% and 4%. For example, in the case of renting a flat in Madrid, if a monthly rent of 1000 euros is established, it is necessary to pay around 36 euros. Once the payment has been made, the property and its corresponding rent will be duly registered.

Afterwards, the person in charge of the Land Registry who has carried out the procedure may, at the request of the tenant, hand over the Nota Simple, a document which clearly and succinctly shows some relevant information related to the property, such as, for example, the identity of the owner, the nature of the property, its size, the number of habitable square metres, etc. It should be borne in mind that the value of this document is purely informative, but its official nature provides a great deal of peace of mind for the tenant.

Advantages enjoyed by the lessee

We are not going to deceive anyone here. Law 4/2013 is especially focused on the legal protection of the lessor, especially in the event that the lessee does not receive the rent derived from the rent, which does not mean that the latter cannot benefit from a number of interesting advantages. Specifically, these are as follows:

1. The certainty of knowing who is renting the property. On many occasions, tenants were faced with the fact that, despite having dealt with a certain person to manage the rental of the property, this person was not the actual owner of the property, which could lead to a series of complications when making claims such as, for example, the replacement of electrical appliances or the repair of faults in the home. However, thanks to this process, there is no possibility of fraud or deception. The tenant will know, from the very first moment, who exactly is the person who has rented the house.

2. Protection against third parties. Another very common occurrence before the entry into force of Law 4/2013 was that the owner sold the property and the buyer proceeded to evict the tenant or to apply new conditions to the contract, as this became invalid. However, this has changed completely. From now on, in the event of a sale, the new owner must respect the conditions that appear in the document, including those related to the duration of the contract and the agreed monthly rent. If he does not agree, he must give the tenant a period of three months to vacate the property, during which time he must continue to pay the corresponding amounts. This obviously offers greater security and stability in the long term.

3. The right of first refusal. This advantage is closely related to the previous one. In fact, the tenant has the possibility, in the event that the owner of the property decides to sell it, to match the offer made by a third party and keep the property. To this end, Law 4/2013 provides for a period of 30 calendar days in which to make a decision in this regard. If it decides to undertake the acquisition, the owner must sell it to it, while, if not, it will fall under the legal framework described in the previous section.

In short, Law 4/2013 and, consequently, the registration in the Land Registry of a rental contract, brings a number of advantages to the tenant, who can enjoy a preferential right of acquisition, greater protection against the possible sale of the landlord and the certainty of knowing all the data relating to the property that could be of interest to him. All this for a very low price that is generally shared by both parties.