# ESCROW Service?



## Dave&Alina (May 8, 2008)

Hi,

Does anyone know of an ESCROW service available in Spain for renters?
I have just finished a contract in Madrid (I'm an Autonomo) and want to move to the coast between Valencia and Barcelona and rent for a year but landlords don't like the fact that I do not have a contract or full time job so I have proven I have the money to pay for a whole year but of course the landlord wants to keep the money which takes away any leverage I have if I have problems with the property.

I have suggested an ESCROW service (where a 3rd party keeps the money and pays regularly each month) but I get total blank looks! Either the idea is an anathema to Spaniards or they just have no idea what I mean.

Surely some Americans have experienced this as this type of service is common place in the US?

Any help gratefully accepted


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## jojo (Sep 20, 2007)

No, its not common for Spanish agents to use the ESCROW system. They usually want a months deposit and a months rent up front. I guess with the economy as it is, they're being cautious of you and wanting to make sure that if you sign for a year, then they'll get a years rental and utilities paid etc. Times are hard

Jo xxx


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## xabiaxica (Jun 23, 2009)

Dave&Alina said:


> Hi,
> 
> Does anyone know of an ESCROW service available in Spain for renters?
> I have just finished a contract in Madrid (I'm an Autonomo) and want to move to the coast between Valencia and Barcelona and rent for a year but landlords don't like the fact that I do not have a contract or full time job so I have proven I have the money to pay for a whole year but of course the landlord wants to keep the money which takes away any leverage I have if I have problems with the property.
> ...


any deposit you pay on moving in is supposed to be kept in a separate 'escrow' account anyway................

so they should understand what you mean

that said, it's not something which is commonly used, although some landlords do want a kind of 'bank guarantee' which shows you have enough funds for a year's (or however long) rent - I think that sort works the same way, but I haven't any personal experience of it

in fact, in 9 years of renting various properties no landlord has ever even asked me for a reference from a previous landlord!

I think it's also worth mentioning that the law only requires one month rent upfront & one month deposit


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## xicoalc (Apr 20, 2010)

jojo said:


> No, its not common for Spanish agents to use the ESCROW system. They usually want a months deposit and a months rent up front. I guess with the economy as it is, they're being cautious of you and wanting to make sure that if you sign for a year, then they'll get a years rental and utilities paid etc. Times are hard
> 
> Jo xxx


 hello Jo - long time!

I have to say I agree with you that I have not come across an escrow system in Spain – that's not to say that one doesn't exist but it does seem a little unusual for a landlord to demand 12 months of rent in advance and it's certainly not something I would do.

If you have enough funds to ensure the landlord security then surely bank statements or even bankers reference should be enough. If he wants a little more guaranteed security than you could suggest perhaps paying quarterly in advance for your rent instead of monthly meaning that if you do ever default it gives him a longer period that you have paid up to chase you etc.

I do once recall a period when I was looking to buy a car on finance and I had not lived in Spain for very long. The only reason I wanted to buy it on finance instead of paying cash was because at the time there was a 0% finance offer and I figured that the money was better off in my bank account. Although in the end I didn't go for the deal because I found a better offer one thing that they did suggest because they were unable to offer me finance at the time because I was new to Spain was that I got a bank guarantee.

The way that a bank guarantee would work would be that you would be able to invest the money into a one-year bond with your bank but the bank would issue against that money guarantee to the landlord to release the funds at the end of the year if you have defaulted. Meanwhile, the money is earning you a little bit of interest at least and you retain your negotiating powers in the event that there are any problems with the house. Nevertheless, I can still see this posing a problem with an unscrupulous landlord who tries to put a claim on the money at the end of the year for any number of reasons and the bank obviously freezing the money until a resolution has been found.

In my honest opinion although the above suggestion is an option I think that with the sheer volume of properties that are available to rent at the moment your landlord is asking too much. It is understandable that the landlord is sceptical of a foreigner – unfortunately we do have a bad reputation as British people for not paying rent and then going home to the UK leaving the landlord with big problems. When I moved to this house I was fortunate because I had a glowing reference from a previous landlord and also a reference from my accountant. Perhaps the bank reference either from a Spanish bank or from a UK bank which is then translated into Spanish would put the landlord's mind at rest little bit.

If he isn't willing to play ball with references and maybe the offer to pay three months in advance then I really would look for other properties because as I said there are many out there!

Hope this helps and good luck!


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## Dave&Alina (May 8, 2008)

*Thanks everyone*

Good idea, I'll try the 1/4 upfront otherwise I'll look elsewhere.

I have been through sending bank payment advices and all my social payments but still find it illogical because if I had 1 million in the bank I could spend it the day after signing and even if I had a job it can end within 15 days here, so the most assured way for the landlord is to have the money held....but then logic is often on the beach sunning itself here rather than being put to use!


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## xicoalc (Apr 20, 2010)

Dave&Alina said:


> Good idea, I'll try the 1/4 upfront otherwise I'll look elsewhere.
> 
> I have been through sending bank payment advices and all my social payments but still find it illogical because if I had 1 million in the bank I could spend it the day after signing and even if I had a job it can end within 15 days here, so the most assured way for the landlord is to have the money held....but then logic is often on the beach sunning itself here rather than being put to use!


 I completely agree – there are several types of bank references that you can authorise the bank to produce. They could just provide a simple report telling them of your balance, or they could provide a notice of good standing to say that you are held an account with them for X number of years or some banks by request will provide a letter giving more information – for example the length of time you have been with them and your overall average balance of accounts throughout that time. So, if for example you were one of the lucky ones that happens to have £1 million in the bank and you have had £1 million in the bank for the last five years if the bank gave a reference stating that you have held an average balance of £1 million over the last five years that's a pretty good example of somebody who is likely to pay their rent! If on the other hand you have been overdrawn for the last five years and suddenly borrowed £1 million from a friend and asked for a similar reference it would still average out that you are constantly overdrawn!

It all depends on the banks and like everything here in Spain that doesn't seem to be one standard rules on one bank to another! Like I said before, offer than three months upfront or even a three-month security deposit and if they're not willing to except that then shop around. Best of luck!


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## baldilocks (Mar 7, 2010)

In my experience, Escrow is just an American phenomenon.


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## thrax (Nov 13, 2008)

When we moved into our current property we paid 6 months up front which was part of the deal we made and got €100 a month off the rental cost. We are now into our second year and the landlord has stuck to the price but we only pay monthly now and have done since the original 6 months was up.


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## Dave&Alina (May 8, 2008)

My last rented house in UK held the deposit with a 3rd party, in essence this is what ESCROW is


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## spvisd (Dec 23, 2012)

*Apartment Advice*



Dave&Alina said:


> Hi,
> 
> Does anyone know of an ESCROW service available in Spain for renters?
> I have just finished a contract in Madrid (I'm an Autonomo) and want to move to the coast between Valencia and Barcelona and rent for a year but landlords don't like the fact that I do not have a contract or full time job so I have proven I have the money to pay for a whole year but of course the landlord wants to keep the money which takes away any leverage I have if I have problems with the property.
> ...




Hello Dave & Alina,

My fiancee & I, both Americans, plan on moving to Barcelona City Centre in July 2013 for 6-8 month extended vacation to explore possibly moving to Spain on a more permanent basis. Can you share any lessons on renting an apartment or living in Spain in general from an Americans perspective? Both of us have lived outside the USA but there is always the country specific advice  Did you use an agency or work directly with the owner? Are furnished apartments readily available? Any advice about anything is most appreciated! - Scott & Monica


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## xabiaxica (Jun 23, 2009)

spvisd said:


> Hello Dave & Alina,
> 
> My fiancee & I, both Americans, plan on moving to Barcelona City Centre in July 2013 for 6-8 month extended vacation to explore possibly moving to Spain on a more permanent basis. Can you share any lessons on renting an apartment or living in Spain in general from an Americans perspective? Both of us have lived outside the USA but there is always the country specific advice  Did you use an agency or work directly with the owner? Are furnished apartments readily available? Any advice about anything is most appreciated! - Scott & Monica


hi - have a look at my reply to your previous post


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