Temporary Rental Agreement: What It Is, Types, and How It Works

The temporary rental agreement is an essential legal tool for landlords and tenants in Spain. After all, it is a practical solution that allows agreements to be reached without long-term commitments. However, not everyone fully understands its importance and implications.

For this reason, in this article we want to explain the basics so that you can stay informed and make the most of its benefits. After all, if you are looking for an option that can be easily adapted to a variety of situations, this is ideal, especially if you want to rent your property to tourists, for example.

In fact, having short-term rental options is a great help for both landlords and tenants. However, this flexibility comes with some challenges and considerations, which we will explain here. This way, you will know all the basics and avoid problems in the future.

What is a temporary rental agreement?

If you want to sign a temporary rental agreement, you must first understand what it means. It refers to a legal agreement between the landlord and tenant that defines the conditions under which a property will be rented for a limited period of time.

Unlike regular rental agreements, these have a more limited and specific duration, which does not exceed one year; they are usually for up to five months. For this reason, they are used to meet the specific needs of a tenant who does not want to commit to a long-term agreement because they do not need to.

For this reason, this type of contract is usually the ideal solution for the cases we are going to show you below:

• University students who need an apartment for a semester.
• Professionals who must temporarily relocate to another city for work.
• Tourists looking for comfortable accommodations for extended vacations.

However, regardless of the particular situation, the key to this contract is its limited duration and the specific clauses that govern it.

How do temporary rentals work?

Like all legal agreements, a temporary rental contract begins with the drafting of a document specifying all the key terms. These refer, for example, to elements such as the duration, amount, privileges and responsibilities of both parties, deposits, and conditions.

If you are unfamiliar with the most important elements to consider when drawing up this type of contract, here is an explanation:

• Fixed term. Remember that, unlike a traditional contract, this one has a set end date.
• Specific clauses. This is not only an important point for regular contracts; in temporary contracts, you should also add information about the use of the property, possibilities for renewal, and penalties in case of breach.
• Deposits and guarantees. A security deposit is usually required to cover potential damage or non-compliance.

In addition, it is essential that you review the Urban Lease Law (LAU), with emphasis on Title III. In this section, you will find all the regulations governing rental contracts, including temporary ones. It also specifies the duties and privileges of the parties to the contract.

What are its benefits?

A temporary rental agreement has many benefits, but the main one is its flexibility. After all, it gives you the option to rent your property for a specific period and for a specific purpose. This gives you more freedom to tailor the rental to your needs without committing yourself for longer than you want.

Another benefit is that if you are looking for greater profitability, this is the ideal option for you. Especially in places like Barcelona, where you will not be subject to the annual 2% limit on rent increases. This means that the contracts you sign will no longer be subject to the regulations of the respective institutions.

Last but not least, there is the customization you can do. With this type of contract, you have more freedom to adjust the clauses to your requirements. In addition, you can include services or furniture to make your experience more comfortable.

Types of temporary rental agreements

Nowadays, there are several types of temporary rental contracts that vary in terms of both duration and purpose. If you would like to know more about them, we explain them below:

• Daily or weekly rentals. These are ideal for those who need accommodation for short periods, such as trips or vacations.
• Monthly rentals. These are the best option for people who work on temporary projects or need a flexible lease.
• Seasonal rentals. These are a good option for people who need accommodation during specific times of the year.

As you can see, there are temporary rental contracts for everyone. You just need to find out which one best suits your needs.

Differences between a temporary rental agreement and a vacation rental agreement

The differences between these types of agreements are very simple. In fact, the temporary rental contract is designed to meet the needs of a tenant for a specific period of time; furthermore, it can vary according to a limited amount of time not exceeding eleven months.

On the other hand, vacation rental contracts are shorter and generally limited to a few weeks. In addition, in these cases, some properties include additional services related to hospitality. Furthermore, this option offers a maximum stay of 31 days and can only be used for tourism purposes.

Key points in a temporary rental agreement

The key points in these types of contracts may vary depending on the legislation. However, the three main ones are always as follows:

• Contract duration. You must clearly specify the length of time for which the rental will be valid, remembering that the time limit is eleven months. Don't forget that it must be clearly defined, as it cannot be an ambiguous agreement.
• Price and payment method. This type of contract must always indicate the total rental amount and the payment method; remember to include the terms and conditions.
• Use of the property. It is essential that you specify the purpose of the rental. This is because there are regulations depending on each case and the length of use.

Clarifying these key points is always important to avoid misunderstandings in the future. It also ensures that both parties comply with the agreed terms.

Temporary rental agreement template

If you need to review a temporary rental agreement template, there are many templates and examples available online. However, this is a step that you should take with your real estate agent, who is responsible for guiding you through the process.

We invite you to read our articles: room rental agreement, how to draw up a rental agreement, and renting without a contract and without receipts.

How long can a temporary rental contract last?

To be considered a temporary rental agreement, it cannot have a duration of more than eleven months. If this occurs, it becomes a regular agreement and must be registered with the relevant institutions. In addition, depending on the location, the minimum period may be only fifteen or thirty days.

How many times can it be extended?

It can be extended if both parties agree. However, all changes to the contract must be in writing and the reason for its temporary nature must be clearly specified. In addition, it must always be stated that this is not the tenant's primary residence.

How and when can it be terminated?

Firstly, it is always advisable to check the legislation in your autonomous community to find out the terms of cancellation. However, tenants have two options, which we will explain below:

• The first option is to leave the property when the contract ends.
• On the contrary, if necessary, early departure can be arranged in accordance with the conditions agreed upon in the agreement.

Regardless of your decision, you should always have a detailed contract. This way, you avoid misunderstandings and ensure that the rights and obligations of both parties are fulfilled.

How are temporary rentals declared?

If you are the owner of a property that is rented out on a temporary basis, you should be aware that you are required to declare all of the net income you received during the year. Remember that you must do this with the tax authorities. Furthermore, if you need help, don't hesitate to ask your real estate agent for assistance.

The type of contract you were looking for

A temporary rental agreement is a great tool that benefits both landlords and tenants. However, like all legal agreements, it requires attention to detail and an understanding of what it entails in order to be beneficial. Whether for a vacation or a temporary project, it is becoming increasingly popular.

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