| What is a Traspaso in Spain? Is this different to a Lease? Can I sell the business? |
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| Spain Business Guide Buying a business on a Traspaso Business Transfer Agent Benidorm & Costa Blanca Spain FREE advice for everyone |
The first thing you need to know is that a traspaso no longer has
any legal validity in Spain and you should be offered a proper
lease. This has much more room for negotiation and flexibility.
However a traspaso is often the only way to buy a small business
or bar in Spain and is still widely used despite being not
recognised. (Strange but true).
This is why a good independent lawyer is essential
The old traspaso was very inflexible and tended to favour the landlord, with a
lease (cesión) you are able to agree much better terms but with this can come much
misunderstanding so you should never agree to sign such a document without
having the terms explained by your lawyer first.
You should always look for terms which allows you to sell the business on and
upon renewal allows you to continue with the same terms. Many Traspasos are
simply straight rental agreements which offer no right for you to sell your business.
You should negotiate the longest lease possible up to 20 years. This ensures that
the landlord can only increase rent by the cost of living where as he may put it up by
as much as 30% with a new lease.
It is also vital to have written into the contract what percentage of any sale the
landlord will want. It is usually 10% or 20% and is quite normal in Spain. Some
greedy landlords will try for much more in which case you should move on to another
business or local.
The most common pitfall for new business people to Spain is that they are offered
a fixed term rental contract which is masquerading as a lease giving no rights to sell
the business on and no rights to continue renting the local at the end of the term.
Some landlords are not aware that the law has changed and still try to offer a
Traspaso. Whatever you are offered only the fool hardy will proceed without a lawyer.
This is also the reason we absolutely recommend you do not use the same lawyer
as the landlord or seller.
Renting business premises in Benidorm whilst not that common can be one way
to set up business without much financial outlay and long term commitment. You
would normally have to pay a couple of months deposit and a month in advance.
The contract would usually be for one year initially and should have a clause
allowing you to continue.
The downside is that if your business is a success you may be left without any
premises at then end of the year and you would find it very hard to sell the business
on a rental contract. The most important part of this type of contract is the
termination clauses which should be as far as possible in your favour to allow you to
remain at the local.
Provided you pay the rent on time (always get a receipt) as a tenant it can be
difficult to remove you from the premises as the law in Spain is very favourable to
tenants. This is why you must make sure you have a very tight contract and a good
legal team.
Simply be very careful when entering into this type of agreement unless it is your
intention to only be in Benidorm for a few years and it is not important to you to sell
your venture on. Also see important advice on paying deposits
Next page - Getting to know other business owners
any legal validity in Spain and you should be offered a proper
lease. This has much more room for negotiation and flexibility.
However a traspaso is often the only way to buy a small business
or bar in Spain and is still widely used despite being not
recognised. (Strange but true).
This is why a good independent lawyer is essential
The old traspaso was very inflexible and tended to favour the landlord, with a
lease (cesión) you are able to agree much better terms but with this can come much
misunderstanding so you should never agree to sign such a document without
having the terms explained by your lawyer first.
You should always look for terms which allows you to sell the business on and
upon renewal allows you to continue with the same terms. Many Traspasos are
simply straight rental agreements which offer no right for you to sell your business.
You should negotiate the longest lease possible up to 20 years. This ensures that
the landlord can only increase rent by the cost of living where as he may put it up by
as much as 30% with a new lease.
It is also vital to have written into the contract what percentage of any sale the
landlord will want. It is usually 10% or 20% and is quite normal in Spain. Some
greedy landlords will try for much more in which case you should move on to another
business or local.
The most common pitfall for new business people to Spain is that they are offered
a fixed term rental contract which is masquerading as a lease giving no rights to sell
the business on and no rights to continue renting the local at the end of the term.
Some landlords are not aware that the law has changed and still try to offer a
Traspaso. Whatever you are offered only the fool hardy will proceed without a lawyer.
This is also the reason we absolutely recommend you do not use the same lawyer
as the landlord or seller.
Renting business premises in Benidorm whilst not that common can be one way
to set up business without much financial outlay and long term commitment. You
would normally have to pay a couple of months deposit and a month in advance.
The contract would usually be for one year initially and should have a clause
allowing you to continue.
The downside is that if your business is a success you may be left without any
premises at then end of the year and you would find it very hard to sell the business
on a rental contract. The most important part of this type of contract is the
termination clauses which should be as far as possible in your favour to allow you to
remain at the local.
Provided you pay the rent on time (always get a receipt) as a tenant it can be
difficult to remove you from the premises as the law in Spain is very favourable to
tenants. This is why you must make sure you have a very tight contract and a good
legal team.
Simply be very careful when entering into this type of agreement unless it is your
intention to only be in Benidorm for a few years and it is not important to you to sell
your venture on. Also see important advice on paying deposits
Next page - Getting to know other business owners
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