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    Tenerife Business » Useful Information » Buying a Business in Tenerife » About the Tenerife Business Lease
Updated: 12-10-2010

About the Tenerife Business Lease

The most common way to purchase a Tenerife business is by buying a lease. The simple reason for this is that a lease is much cheaper than buying the freehold outright. In this article we’ll be explaining about Spanish leases and what you should look out for because not all leases are the same.

 

When you buy a business it is quite normal for the landlord to start a new lease of the premises in your name. There are a number of negotiable points in the structure of a lease contract and you should always employ a local lawyer to help you. Your lawyer will know the ins and outs of all the clauses and with his help you will be able to agree on the most advantageous terms. Your Tenerife business sales agent will also be an invaluable source of information and advice.

 

A Tenerife business lease is for a particular term and gives you the right to rent the property from the landlord for the duration of that term. The normal length of time a lease will run for is 5 to 10 years. You will have to pay a refundable deposit when you start your new lease, and this is normally equivalent to two-three months rent.

 

When you buy a lease in Tenerife, the price is paid to the existing business owner, not the landlord (although sometimes they are the same person). It is not unusual that the landlord will get a percentage of that fee, and the amount of this share is one of the factors that may be negotiated when a new lease is started. Unlike many other countries, when your lease is renewed, you will not have to pay another fee to the landlord.

 

If you buy a lease of a Tenerife business that is not trading, then the landlord will generally ask for a fee to cover the value of the fixtures and fittings. In addition to this, you will also have the cost of renewing the licenses with the local authorities.

 

Normally included in the business lease are the fixtures, fittings, goodwill and the legal costs of processing the paperwork for the business. Rent rises during the term of the lease are fixed by law at the rate of inflation. When you renew a lease, however, the landlord may raise the cost of rent by up to 20%.

 

When you sign a lease, you also commit yourself to various responsibilities. You will agree to pay the rent regularly as well as other costs. These include your local taxes, rubbish collection and the community fees for your premises. You are also responsible for ensuring that all the relevant licenses for your business are in place and that your business complies to the local bylaws related to the type of your license. As well as local laws, you must also ensure that your business is working within the regulations of your local community.

 

As a leaseholder, you have the right to change the décor, fittings and furnishings in your premises, but you may not make structural alterations without the written permission of the landlord. Major repairs and structural work is the sole responsibility of the landlord.

 

There are many things to consider when buying a lease in Tenerife. You’ll find lots more information about leasehold and freehold in Tenerife elsewhere on this website.

 

By Irina Saltmarsh


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