The Buyers Guide/Guide to Buying a Lease

The Bars in Spain SL

Guide to Leasing

 

Leasing a Bar in Spain.

Buying a lease on a Bar in Spain is a lower cost option for acquiring a business without the requirement for the much higher capital outlay required to purchase a freehold. A lease in Spain is called a ?Traspaso?.

 

Purchase price

The price quoted is for a new lease at the terms stated within the lease document. This amount is normally paid in one lump sum payment upon signing over of the new lease. It is normal practice to secure the sale with the payment of a deposit. This deposit payment is normally 10% of the full price of the lease and is non-returnable unless the sale falls through because of the seller. At this point it is important that you are certain about your choice of purchase as if you change your mind, you will lose your deposit.

 

Length of lease

This will be clearly stated in all documentation pertaining to the sale of the business and will be written into the lease agreement. Leases can vary from 5 years to 20 years but it will be set out in the contract. Most modern leases run for 5 to 10 years although occasionally we come across what is called an endless lease.

You have an automatic right to renewal of the lease providing you pay the rent on time and keep within the terms of the lease.

 

During the lease

ˇ       You must pay the agreed rent on a monthly basis.

• You can run the business in accordance with the terms of the lease (i.e. as a bar or café bar).
• You can alter the theme of the bar, the décor, the furniture etc but you cannot, without the landlord?s permission, alter the structure of the premises.
• You will be responsible for the electricity, water, community charges etc
• Your landlord is responsible for external repairs and major structural work
• The rent will increase by the rate of inflation each year
• On renewal of the lease the rent will be increased (usually 20%)

 

Selling the lease
At any point and at your discretion, you can sell the lease at your required price. It is normal practice in Spain to have to pay your landlord a commission on any sale. This commission can be anything from 0 to 20% so it is important that you are aware of this prior to signing the lease and that it is written into your lease document. A new buyer will be responsible for any costs involved in the sale.

 

Security issues

• You may be required by the landlord to insure the property at your own cost.
• Most landlords require a security deposit of 2 months rent. This will be returned to you when you leave, providing the premises are returned to the landlord in good condition
• You will also need to pay your rent one month in advance

Disputes

Your lease is a legal contract and is governed by the Laws of Spain. In the event of a dispute with your landlord, either party can take legal action in the local Spanish court.

You have rights as a tenant and your landlord has rights to protect his property.

 

Working with Bars in Spain S. L.

 

1. Once you have found the right business, you pay us a 10% deposit to secure the purchase. We do not give this to the seller at this point in case there is a problem with the sale and we need to return it to you.

2. We then prepare an option contract which usually lasts for 30 days but can sometimes be longer if required. This means that you have 30 days in which to pay the full balance

3. During the term of this contract, the seller cannot increase the price, nor offer the business to any other party.

4. During the term of this contract, it is the role of your appointed legal advisor to check the licence of the business and check there are no outstanding debts.

5. On the set completion date, the outstanding balance of funds is transferred to the seller in the presence of your legal advisor. You are then given the keys and your new lease is signed by the landlord.

Important Notes

 

• If the seller pulls out of the sale for any reason, or it transpires that the business is not 100% correct, your deposit can be returned to you or used against another purchase.
• If you pull out of the sale because you have changed your mind or cannot raise the balance of the funds, you will forfeit your deposit.
• If it transpires that there are outstanding debts on the business, these will be paid by the seller. 

 

Frequently Asked Questions:

 

 

If I buy a lease how long will it run for ?

Leases can vary from 5 years to 20 years but it will be set out in the contract. Most modern leases run for 5 to 10 years

 

What happens at the end of the lease ?

You can renew it with your landlord. He can increase the rent at this point

 

How much will the rent rise by each year ?

Subject to the rate of inflation, annually. At lease renewal, the landlord can increase it by 10-20%

 

Can I alter the inside of the bar ?

Yes but not the main structure of the building. You can redecorate or refurnish as you wish.

 

Can I sell the lease ?

Yes, at any point for whatever price you like. However, you will have to pay a commission to the owner and an agency fee to the estate agent handling the sale of the lease

 

How old do I have to be ?

You have to be 18 years of age or over

 

Am I going to lose all my money ?

So long as you buy wisely and create a sound business there is no reason why you should lose money when you are ready to sell the business. Bars in Spain can provide you with expertise at every step of the way to help you succeed.

 

What about licences ?

Licenses to run a Bar in Spain are relevant to the bar itself and not you as an individual. However if you take over a bar license you must notify the authorities of a change of ownership.