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Recommendations in Leasing Contracts

Finance, Leasing

When the lease of any good, service, etc. is formalized, the lease contract is essential for the protection of both parties (property owner and tenant). In this post, Global Leasing Alliance experts are going to give some recommendations in leasing contracts to take into account to adapt to current legislation.

Types of Lease Agreements

Leasing of services:  In this type of leasing, what is leased is the provision of services. It should not be confused with the employment contract, since in this case, it does not establish an employment relationship.

Leasing of works:  This type of leasing is similar to the previous one, but in this case, the leased obligation is of the result. This means that what is paid is not the mere service, but the obtaining of a result.

Leasing of things: This can be on real or personal property. It is what is commonly called “rent”, where the tenant takes possession of the property for a specified period in exchange for the payment of the agreed rent.

Aspects That Cannot Be Missing From the Lease

As a rule, the parties to a lease are the lessor and the tenant. That is, who gives up possession of their property and who accesses it in exchange for rent, respectively.

A lease must have the following characteristics and therefore must be:

Bilateral:

As we have mentioned before, the part that transmits the possession and the one that receives it intervenes. However, this does not prevent more than two people from participating in the lease.

For this reason, the parties involved and who are going to form the signed contract must be identified.

Consensual:

Since it is based on the consent of the parties and does not require further formalities. However, it must be taken into account that when it comes to renting a dwelling, it must be taken into account what is mandatory to respect the LAU.

Object:

The object on which the lease is based must be established, which, if it is on a property, the property that is rented must be clearly indicated. To do this, it will be necessary to indicate the address of the same and it is advisable to add the cadastral reference.

Duration:

Because the use and enjoyment are transmitted for a certain period. Although there are life usufructs, its operation is different from the lease.

In the leases of real estate, if the term of the contract is not indicated, it will be understood that it is a term of one year renewable to three years.

Onerous:

Because whoever enters to occupy the property or to enjoy the thing pays rent for it.

The monthly or annual amount to be paid must be indicated, as well as the way in which that payment will be made.

You can also regulate the payment of bank charges in case the rental receipt is returned.

It is recommended that you clearly specify what items the payment of rent includes: community expenses, IBI … If nothing is indicated, these expenses cannot be added to the rent paid by the tenant and must be paid by the owner

Legal Recommendations To Take Into Account

To formalize a lease, it is enough that there is a contract. This lease can be in written or verbal form.

For greater legal certainty for the property owner, there are different mechanisms to guarantee the collection of the tenant’s rent, such as:

Surety: This figure is included in article 36 of the LAU. In it, the property owner is allowed to request a monthly rent payment at the beginning of the housing rental contract. In the case of leasing for use other than housing, an amount equivalent to two monthly payments will be requested. When this ends, the deposit must be returned, unless there are damages in the house. In that case, the deposit may be applied to the payment thereof.

Endorsement: This may be personal or bank. The guarantor will be responsible for defaults and defaults made by the lessee. Therefore, the lessor could execute it in the event of the lessee’s breach of contract.

Deposit: It consists of the immobilization of a certain amount of money in favor of the lessor. In the event of default or defaults, you will be able to access that money, with the guarantee that your debtor is not insolvent.

Lease insurance: It is private insurance, which combines elements of the previous guarantees. The lessee pays the insurance policy, thus shifting the responsibility for defaults, damages or defaults on the insurer.

Global Leasing Alliance

From Global Leasing Alliance we provide comprehensive leasing programs and financial services in relation to any type of lease tailored to meet your monetary needs.

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