# Extortion?



## ExpatWannabee (Jul 6, 2011)

After nearly a decade of wishing, hoping, dreaming, researching, planning and visiting, my partner and I finally made the big move from Toronto to Valencia last week. We rented a short-term apartment in the city and are looking to rent a suburban house for a year just to make sure we love living here as much as we've enjoyed vacationing, before buying a house of our own. (We feel we need a house because we want to rescue a few Spanish greyhounds and we love to garden.)

After several years of perusing various expat chat forums, we thought we had familiarized ourselves with just about every obstacle that Spain could throw in an ex-pat's way. Until today. We visited a house with our real estate agent and while it had a lot of pluses, it also had a few minuses that we needed to think about. When we mentioned that we might want to rent the house, our agent said that if we decided definitely yes, we would have to put up four months rent in advance: first and last month's rent, one month security deposit, and one month's rent as her commission.

Now, first and last month's rent? That's pretty standard in many countries so no problem there. One month's rent as security? Sure. But to pay €1,200 to an agent we just met yesterday and whose work on our behalf consisted of showing us one house? The research we did today tells that this is common practice in Spain for renting a place for more than six months. But really, is it just me or does anyone else find this to be somewhat extortionate?


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## xabiaxica (Jun 23, 2009)

ExpatWannabee said:


> After nearly a decade of wishing, hoping, dreaming, researching, planning and visiting, my partner and I finally made the big move from Toronto to Valencia last week. We rented a short-term apartment in the city and are looking to rent a suburban house for a year just to make sure we love living here as much as we've enjoyed vacationing, before buying a house of our own. (We feel we need a house because we want to rescue a few Spanish greyhounds and we love to garden.)
> 
> After several years of perusing various expat chat forums, we thought we had familiarized ourselves with just about every obstacle that Spain could throw in an ex-pat's way. Until today. We visited a house with our real estate agent and while it had a lot of pluses, it also had a few minuses that we needed to think about. When we mentioned that we might want to rent the house, our agent said that if we decided definitely yes, we would have to put up four months rent in advance: first and last month's rent, one month security deposit, and one month's rent as her commission.
> 
> Now, first and last month's rent? That's pretty standard in many countries so no problem there. One month's rent as security? Sure. But to pay €1,200 to an agent we just met yesterday and whose work on our behalf consisted of showing us one house? The research we did today tells that this is common practice in Spain for renting a place for more than six months. But really, is it just me or does anyone else find this to be somewhat extortionate?


well the agent isn't going to work for nothing.... & you don't know how many times she'll have actually shown it before you saw it


some agents charge commission to the owner, some to the tenant - some charge a month - one in my town charges half a month - there is no hard & fast rule, nor legislation for this

there is, however for deposits - that is one month rent in advance & one month security deposit (actually istr that it's 2 for furnished in the new rules last June) - that is all that is required - although if you agree to pay more, that's up to you 

if I'm correct about the 2 month deposit, then that would seem right 

here's a discussion about it http://www.expatforum.com/expats/sp...3-new-long-term-rental-rules-june-2013-a.html


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## Pesky Wesky (May 10, 2009)

ExpatWannabee said:


> After nearly a decade of wishing, hoping, dreaming, researching, planning and visiting, my partner and I finally made the big move from Toronto to Valencia last week. We rented a short-term apartment in the city and are looking to rent a suburban house for a year just to make sure we love living here as much as we've enjoyed vacationing, before buying a house of our own. (We feel we need a house because we want to rescue a few Spanish greyhounds and we love to garden.)
> 
> After several years of perusing various expat chat forums, we thought we had familiarized ourselves with just about every obstacle that Spain could throw in an ex-pat's way. Until today. We visited a house with our real estate agent and while it had a lot of pluses, it also had a few minuses that we needed to think about. When we mentioned that we might want to rent the house, our agent said that if we decided definitely yes, we would have to put up four months rent in advance: first and last month's rent, one month security deposit, and one month's rent as her commission.
> 
> Now, first and last month's rent? That's pretty standard in many countries so no problem there. One month's rent as security? Sure. But to pay €1,200 to an agent we just met yesterday and whose work on our behalf consisted of showing us one house? The research we did today tells that this is common practice in Spain for renting a place for more than six months. But really, is it just me or does anyone else find this to be somewhat extortionate?


I echo what xabiachica says.
I'd like to add that 1,200 euros does seem like a lot, especially if you're only renting not buying, but it's your responsibility to find out what fees the agency is going to charge before you decide to use them. You have different options that you can take now as far as I see it... Leave the agency and that house, renogotiate terms with this agency for this house, look at other houses with this agency and check the terms for each house they show you etc etc.
Be careful though about looking at the house with another agency or contacting the owners directly because depending on what you signed with the first agency, if you signed anything at all, you could end up with a court case. It happened to an American friend of mine and her Spanish husband.


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## zenkarma (Feb 15, 2013)

ExpatWannabee said:


> But really, is it just me or does anyone else find this to be somewhat extortionate?


Negotiate.

It's a buyers market and if you're not happy with the deal you're getting either negotiate it to one you are happy with or walk away and look for something else.

To be in a better negotiating position, read and understand what the rental laws say about minimum deposits etc.

Personally, I think it's a cheek that the landlord expects the tenant to pick up the tab on the agency fee. It certainly doesn't work that way in the UK although I know other EU countries have adopted that practice but it tends to be in countries that have high rental demand—in the Netherlands for example. 

There's not high rental demand in Spain at the moment (although I don't know about your particular location) and therefore I'd be negotiating pretty hard on that agency fee and testing the water as to just how much the landlord wants the property rented. I'd be pushing for a 50:50 split on that agency fee between tenant and landlord. And I'd be looking to only pay the minimum legal deposits too.


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## jimenato (Nov 21, 2009)

We have certainly paid a 'finders fee' when renting from/through Spanish - it was 1/2 month's rent. On the other hand I have not had to when renting from/through British - the landlord paid a monthly % fee I believe. We also paid a month in advance and a month's deposit and I believe that should be all. 

Bear in mind that once the finders fee is paid - that is it. The agent gets no more whereas with the UK norm, there is a monthly fee which would get passed on ultimately to the tenant. 

Also, not a worry for you yet, but we hear time and again that the deposit doesn't get returned. What some do is simply not pay the last month's rent - that's what we've done twice by agreement with the landlord. Some won't be so happy to do that - they seem to think that the deposit is theirs to keep.


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## Allie-P (Feb 11, 2013)

We are in the process of renting for the second time, in Spain - from different agents.

Both Landlords have removed their furniture - we have our own. 

Both agents requested 1 month deposit plus 1 month rent in advance & half of 1 months rent, as their fee....I believe this to be standard practice, with another month upfront if the property is furnished.

It can be quite pricey !! I am moving at the end of the month & will let you know if my deposit is returned from my first rental :fingerscrossed:


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## NickZ (Jun 26, 2009)

zenkarma said:


> Personally, I think it's a cheek that the landlord expects the tenant to pick up the tab on the agency fee. It certainly doesn't work that way in the UK although I know other EU countries have adopted that practice but it tends to be in countries that have high rental demand—in the Netherlands for example.
> 
> .


In the end the tenant always pays. Any costs the landlord pays one way or the other ends up in the rent. You could argue it's more honest for the fee to be up front and not hidden in the monthly rent.


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## Catherine L (Oct 22, 2013)

There ar some sharks out there. Luckily we knew some agents personally so were not ripped off. There are some good ones, but so many just out to make a quick buck.


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## ExpatWannabee (Jul 6, 2011)

I guess different countries have different practices. In Canada, as in the U.S. and UK, the commission to the rental agent is paid by the landlord. At least there's a logic to that, since the landlord is the one who benefits financially from the rental. Yes, the tenant (hopefully) gets a nice place to live, but he/she is paying the landlord handsomely for that.

But all's well that ends well. Our agent (with whom we had not signed any papers) found us another house that is even better than the first and negotiated the monthly rent down from the asking price of €1,500 to €1,300. So we at least we feel we are getting value from her commission. And, our extremely friendly and helpful bank (the La Caixa branch in La Canyada) has agreed to provide us with an "aval bancario" i.e. A guarantee to the landlord that if we don't pay our rent the bank will, which means that we only have to pay the landlord two months rent up front for the spectacular and beautifully designed and furnished house.


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## xabiaxica (Jun 23, 2009)

ExpatWannabee said:


> I guess different countries have different practices. In Canada, as in the U.S. and UK, the commission to the rental agent is paid by the landlord. At least there's a logic to that, since the landlord is the one who benefits financially from the rental. Yes, the tenant (hopefully) gets a nice place to live, but he/she is paying the landlord handsomely for that.
> 
> But all's well that ends well. Our agent (with whom we had not signed any papers) found us another house that is even better than the first and negotiated the monthly rent down from the asking price of €1,500 to €1,300. So we at least we feel we are getting value from her commission. And,* our extremely friendly and helpful bank (the La Caixa branch in La Canyada) has agreed to provide us with an "aval bancario" i.e. A guarantee to the landlord that if we don't pay our rent the bank will,* which means that we only have to pay the landlord two months rent up front for the spectacular and beautifully designed and furnished house.




hmm - that's not quite how I understand it :confused2:

I've never been asked for one, but I thought it meant that you currently have the funds in the bank - & that these funds will be 'frozen' or held there by the bank in case you default on the rent, in which case they would pass it on to the landlord - you can't touch it for the duration of the contract

not that the bank will actually pay it _for _you

better in your own account than in an agent's though 


I'm happy to be corrected it I'm wrong ..............


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## Lolito (Aug 25, 2012)

I think La Caixa charges you a monthly fee for being your 'avalista', not sure how much, also they 'keep' a certain amount of money that you won't be able to touch until your contract finishes. I am not too sure about this. 

But in this crisis, it is pretty difficult and complicated to find an avalista (family, friend, etc) no-one wants to do it and no-one wants to be asked to be an avalista! So now the banks are offering themselves as 'avalista' but I would be surprised if it was all for free. 

They asked us for an aval when we first moved here, but I didn't want to put anyone I know here in a difficult position by asking them, and since we don't work, we just showed them our bank statements and it was ok with that. 

By the way, 1300 euros a month in Valencia, it might be a mansion with heated indoor pool and tennis court, as that's what you (almost) get for that amount in/around Gandia. Lol!


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## Claire la richarde (Jul 6, 2009)

zenkarma said:


> Negotiate.
> 
> Personally, I think it's a cheek that the landlord expects the tenant to pick up the tab on the agency fee. It certainly doesn't work that way in the UK although I know other EU countries have adopted that practice but it tends to be in countries that have high rental demand—in the Netherlands for example.


Unfortunately, that _is_ how it works in the UK. I know, as my kids are students and I've been hunting for lets. May agencies are charging fees to both the landlord _and_ the tenant.

Read this article from the Independent from October this year
Tenants in the dark as letting charges spiral out of control - Property - House & Home - The Independent
and Shelter's campaign on the subject
End letting fees - Shelter England


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## ExpatWannabee (Jul 6, 2011)

Lolito said:


> I think La Caixa charges you a monthly fee for being your 'avalista', not sure how much, also they 'keep' a certain amount of money that you won't be able to touch until your contract finishes. I am not too sure about this.
> 
> But in this crisis, it is pretty difficult and complicated to find an avalista (family, friend, etc) no-one wants to do it and no-one wants to be asked to be an avalista! So now the banks are offering themselves as 'avalista' but I would be surprised if it was all for free.
> 
> ...


Well the house is ultra-modern and quite large, as is the property, and the €1,300 includes the gardener (we love gardening but can't handle trimming 15-foot hedges) and (very embarrassingly) membership in the local social club, which does have tennis courts. But the sizeable pool at the house is, alas, outdoors. And there is a premium to be paid for living on the Metro line 25 minutes from Valencia. It's all really more than we were looking for or expected to find, but we figured we could treat ourselves for our first year in Spain before settling into more modest digs for the long haul.


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## Lolito (Aug 25, 2012)

Good for you! I've been to La Cañada before, I love the pine trees and the big houses over there, but couldn't really afford it!


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## zenkarma (Feb 15, 2013)

Claire la richarde said:


> Unfortunately, that _is_ how it works in the UK. I know, as my kids are students and I've been hunting for lets. May agencies are charging fees to both the landlord _and_ the tenant.


Well it never used to be that way.

What you're seeing is nothing more than greed from unscrupulous rental agents taking advantage of prevailing market conditions. They will only get away with this when rental demand is high when they think they can get away with charging both tenant and landlord. They would not get away with that when rental demand is low.

I've been reading conflicting reports with regards to the UK rental sector with one saying demand is dropping as more and more people buy and another saying demand is high. I suspect that variance is regional, with London and the SE, as usual, proving to be a micro-economy in itself completely separate from the rest of the country.

Demand drives the market and I suspect that as demand for housing in London and the SE is high for both purchase and rental properties, rental agencies will charge whatever the market will bear. It's likely to be a different story in the less populated parts of the country.


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## Claire la richarde (Jul 6, 2009)

zenkarma said:


> Well it never used to be that way.
> 
> What you're seeing is nothing more than greed from unscrupulous rental agents taking advantage of prevailing market conditions. They will only get away with this when rental demand is high when they think they can get away with charging both tenant and landlord. They would not get away with that when rental demand is low.
> 
> ...


I've/We've been looking well outside London. The fact is, for one thing there is high demand anywhere there is a university - and remember, there are amost two and a half million students in the UK now. So students and anyone competing in the same market are very likely to have to pay letting fees.

But I have also been looking in a small town in Wales, where most of the students at the local FE college live at home, and letting fees are still charged there.

Unfortunately, it's becoming the norm. Hence Shelter's campaign.


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## PeteSm (Jul 29, 2012)

*Deposit*



ExpatWannabee said:


> After nearly a decade of wishing, hoping, dreaming, researching, planning and visiting, my partner and I finally made the big move from Toronto to Valencia last week. We rented a short-term apartment in the city and are looking to rent a suburban house for a year just to make sure we love living here as much as we've enjoyed vacationing, before buying a house of our own. (We feel we need a house because we want to rescue a few Spanish greyhounds and we love to garden.)
> 
> After several years of perusing various expat chat forums, we thought we had familiarized ourselves with just about every obstacle that Spain could throw in an ex-pat's way. Until today. We visited a house with our real estate agent and while it had a lot of pluses, it also had a few minuses that we needed to think about. When we mentioned that we might want to rent the house, our agent said that if we decided definitely yes, we would have to put up four months rent in advance: first and last month's rent, one month security deposit, and one month's rent as her commission.
> 
> Now, first and last month's rent? That's pretty standard in many countries so no problem there. One month's rent as security? Sure. But to pay €1,200 to an agent we just met yesterday and whose work on our behalf consisted of showing us one house? The research we did today tells that this is common practice in Spain for renting a place for more than six months. But really, is it just me or does anyone else find this to be somewhat extortionate?


From our experience, and the experience of friends who have rented, nobody EVER gets their deposit back at the end of the rental.:mad2:


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## ExpatWannabee (Jul 6, 2011)

PeteSm said:


> From our experience, and the experience of friends who have rented, nobody EVER gets their deposit back at the end of the rental.:mad2:


Is this really true? I may be wrong, but I can't see any landlord renting us a furnished house without a deposit. At the same time, I'm not willing to dump €2,600 into anyone's retirement fund. Is there any way we can put some language in our rental agreement that will protect our deposit?


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## xabiaxica (Jun 23, 2009)

ExpatWannabee said:


> Is this really true? I may be wrong, but I can't see any landlord renting us a furnished house without a deposit. At the same time, I'm not willing to dump €2,600 into anyone's retirement fund. Is there any way we can put some language in our rental agreement that will protect our deposit?


sadly not many get their deposit back - although all standard contracts make clear that you should - & the deposit is also supposed to be held in a separate account & not touched by the landlord


what frequently happens is the landlord will claim 'damages' to the property which will equal the amount of the deposit

it's recommended to take detailed photos, get a full inventory etc before moving in - but even then landlords will find something

for example - I've lived in my house for over 2 years - in that time some plates have been broken, these things happen. I've replaced them, but not with identical ones . I couldn't find the same. The landlord _might _say that he has to buy a complete new set of crockery.

the house was newly painted when we moved in - of course by now it needs repainting - but is that normal 'wear & tear' which is expected - or is that 'damage' ? If it's damage then repainting the house would eat up quite a lot of the deposit......

We actually use very little of the furniture, although I rent 'furnished'. Most of it is in storage in the dry garage - but what about the furniture I DO use? Bed bases don't last forever. They are still in good condition atm - but what if we're still here in 3 more years? They could well need replacing by then. So is that 'wear & rear'? Or have we damaged them?

so you see it's difficult. I don't know if my landlord will take that attitude & not return my deposit - but I'm not counting on getting it back


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## snikpoh (Nov 19, 2007)

ExpatWannabee said:


> Is this really true? I may be wrong, but I can't see any landlord renting us a furnished house without a deposit. At the same time, I'm not willing to dump €2,600 into anyone's retirement fund. Is there any way we can put some language in our rental agreement that will protect our deposit?



Are you really paying €2,600 a month in rent?? 

Remember, you only had to pay one months rent as fianza. Recently this went up to 2 months if the property is furnished. You should NEVER have to pay any more (unless you want to of course).


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## ExpatWannabee (Jul 6, 2011)

The €2,600 is two months rent.


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