Industry / Business Rental contracts. Are you renting – letting a local premises or business? Are you sure that your rental agreement is right for you?

Industry or Business leasing has been defined by legal doctrine and jurisprudence in Spain, as the contract which provides not only a building, but also the business and activity itself, alive and active, that can be ran immediately, since a previous activity or business has already been developed.

This type of lease is different from the lease of business premises, typically urban lease, which is the most common and well known, governed by Law 29/1994 Urban Lease Act (LAU).

For example, the lease of a local to be used for the activity of a Bar-Restaurant, would normally be a lease of business premises. However, if the lease includes not only the building but also all the furniture, existing customers, etc. having a running activity, we could be facing an Industry lease.

Industry Leases are expressly excluded from the LAU, being subject to the Spanish Civil and Commercial Code. So, in an industry leasing, the LAU would not necessarily apply regarding the deposits, duration, compensation, etc. This is a very important point. Also,  some courts do not believe that the resolution or termination of an Industry Lease is possible by oral proceedings (for nonpayment of the agreed rent). Known as “express eviction”, this has some specialties that make it a much faster process. These courts understand that the eviction of industry leases must be processed by the corresponding declarative standard process, typically a much longer process.

However, some judges do understand that the “express” procedure also applies to the leasing industry, given changes in the Civil Procedure Act.

It is so important to the expatriate community to understand that in Spain,  what is relevant is not the name the parties give to the contract, if they call it industry – business or premises letting contract, the important thing is the real intention of the parties, in order to qualify the contract one way or another. Given the uncertainty noted above, it is of vital importance to make the contract in the way that best covers your interests.

For all the above, it is very important to understand the difference between these two types of contracts, if you are part of a lease of a local or a business you must protect your interests. Contact Us

 

The information provided in this article is not intended to be legal advice, but merely conveys general information related to legal issues.

 

Carlos Baos (Lawyer)

Spanish Law firm solicitor attorney barrister.

Alicante, Denia, Costa Blanca Marina Alta

White & Baos 2015 – All rights reserved

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