Who pays the letting agent and the costs of the lease when renting commercial premises?

Whoever is agreed. The residential rule that the letting agent's fees and the costs of drawing up the contract are always paid by the landlord does not apply to commercial premises, so they can be charged to the tenant or shared. If nothing is agreed, the letting agent's fees are paid by whoever instructed the agent. A deed before a notary and registration at the “Registro de la Propiedad”, the Land Registry, are not compulsory. If they are done, they are paid for by whoever requests them, unless otherwise agreed.

Alburquerque Abogados

José Manuel Alburquerque
Landlord and tenant

The letting agent

  • If there is no agreement, whoever hired the letting agent pays. Normally it is the landlord who instructed the agent to find a tenant, but it may be the tenant who instructed the agent to find premises.
  • It is common for each party to pay its own agent or for the tenant to pay the agency one or more months' rent. All of that is valid if it is agreed.
  • The lease or the letter of engagement should state who pays and how much.
  • In Catalonia, estate agents must be entered in the register of the Generalitat de Catalunya (the Catalan government). It is advisable to check this before paying.

Other costs

  • A public deed and registration at the Land Registry are not needed for the lease to be valid. They ensure that a future buyer of the premises must honour the lease in all cases, which is why they are mainly of interest to the tenant under a long lease.
  • The statutory deposit (“fianza”) is not a cost. It is the tenant's money, which the landlord will return at the end. In Catalonia, in the meantime, the landlord lodges it with the “INCASÒL”, the Catalan public body that holds tenancy deposits.

Taxes

  • The rent for commercial premises carries 21 % VAT, even if the landlord is a private individual. The landlord charges it to the tenant on each invoice and pays it over to the tax authorities. If the tenant is a business or a professional, the tenant can normally deduct it.
  • As the rent carries VAT, the lease is not subject to the “impuesto de transmisiones patrimoniales”, the Spanish property transfer tax. If it is executed as a public deed, ask the notary beforehand what taxes the deed will attract.
  • The deposit does not carry VAT.

This answer is provided for educational purposes and offers initial guidance on the question raised. Every matter has its own circumstances and nuances that require individual assessment. For that reason, before taking decisions with significant consequences, it is advisable to consult a professional and not to rely solely on this information. Personalised advice makes it possible to apply these explanations to the specific case and to assess the options available with greater certainty.