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RENTING

Aval: How to get a bank guarantee to rent a property in Spain 

Proving that you’re going to pay your rent every month isn’t always easy for foreigners who’ve just moved to Spain. One of the ways to offer landlords peace of mind is an ‘aval’ (bank guarantee), here’s everything you need to know about it. 

Published: 9 September 2024 13:41 CEST
Aval: How to get a bank guarantee to rent a property in Spain 
Landlords in Spain always want some form of guarantee that you will pay your rent, the 'aval bancario' is one of the most popular. Photo: Pavel Danilyuk/Pexels

Renting a property in Spain if you don’t have a contract job can be very challenging.

This can apply to new arrivals without a job yet, pensioners and even self-employed workers with high earnings every month. 

This is because in the eyes of many landlords in Spain, only a job contract offers a proper guarantee of monthly earnings, and thus the money necessary to pay the rent.

Therefore, it’s not unusual for landlords or estate agencies to prefer to rent out to a civil servant who earns €1,500 than to an entrepreneur earning on average €2,500 a month. 

As unfair as this may seem, it’s the status quo in Spain, a knock-on effect of the unstable nature of the country’s job market and fair share of untrustworthy tenants who stop paying. 

READ ALSO: How to rent a property in Spain without a job contract

So when paying one or two months’ worth of rent as a deposit doesn’t cut it, what are your choices?

Often, caseros (landlords) will ask you to take out an aval bancario para el alquiler, a rental bank guarantee. 

What is an aval in Spain?

In a nutshell, an aval is an agreement which states that if the tenant stops paying rent, the landlord can go to the tenant’s bank and get the money from there for the rent.

This type of non-payment insurance sees the tenant deposit a pre-agreed amount of money into a separate account, a sum of money which they cannot access for a certain period of time, and which they have to pay interest on for keeping there.

Usually, landlords ask for this to be the equivalent of six months of rent, although you may be able to negotiate three months.

The conditions of a bank guarantee for rent vary depending on the bank. They will take into account your financial history, the rental contract, your employment situation etc.

READ ALSO: Stricter requirements and screenings – Why it’s getting harder to rent in Spain

The steps for applying for an aval in Spain 

Go to your local bank account branch.

The bank will ask you for information relating to your financial situation and employment.

Once the bank guarantee for rent has been accepted, the bank will inform you of the conditions of the contract and ask you to deposit the agreed amount of money in the ‘untouchable’ account until the end of the guarantee.

Your bank will have to inform you of the interest and charges associated with the rent guarantee contract. 

Once the conditions have been accepted, the contract must be signed.

Lastly you will have to hand the bank guarantee to your landlord. 

How much will I pay in interest with an aval in Spain?

As usual with Spanish banks, there are several extra costs when it comes to taking out a bank guarantee. 

These include management fees (gastos de gestión), formalisation fees (gastos de formalización) and a trimestral interest fee.

Each of these is usually a percentage of between 0.5 and 2 percent of the amount deposited in the untouchable account. 

So for example, if the place you want to rent is €1,000 a month and you have to deposit €6,000, after the initial charges you will probably have to pay between €30 and €120 in interest every three months.

How long does an aval last in Spain?

It can either be indefinite or have a predetermined length. 

As an aval is essentially an agreement between tenant and landlord with the bank as an intermediary/guarantor, it’s important to try to reach some form of consensus with the property owner beforehand. 

For the most part, landlords will argue that the bank guarantee should continue for as long as you carry on renting their property.

However, you could try to convince them that if after a year you have paid the rent religiously, you will have proven that you can be trusted and that you shouldn’t have to continue to pay interest to keep the aval going.

Whatever the agreement, make sure the bank guarantee’s length, amount and payment conditions are included in the rental contract. 

What else do I need to know about taking out an aval in Spain?

The bank guarantee has to be taken by the prospective tenant to a notary in Spain for the bank to formalise the arrangement (check with your bank when this should happen). 

Logically, if you stop paying your rent, then your landlord will be able to access the owed amount from the bank (not the full amount, unless that’s what is owed). The bank will also reach out to the tenant for them to reimburse the amount.

There are different types of aval which stipulate the modus operandi for the bank guarantee money to be requested, which may involve the landlord first contacting the tenant and/or the bank. 

In order to cancel a bank guarantee in Spain, you will be asked to hand your bank the original aval document that you gave to your landlord and a letter from them authorising the cancellation.   

READ ALSO: The pros and cons of signing a temporary rental contract in Spain

Member comments

  1. Thanks for this useful information.
    As someone who has moved around a lot the more that you know in advance the better prepared you are to deal with renting in a new country.

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For members

PROPERTY

Is buying a property to rent out to tourists in Spain too risky now?

The quick return on investment for buying a holiday let in popular Spanish cities and towns can be very appealing, but there are increasing signs that the money-making scheme could come to an end soon. 

Published: 10 September 2024 10:32 CEST
Is buying a property to rent out to tourists in Spain too risky now?

Regardless of what you think are the causes of Spain’s housing crisis, one thing is clear: short-term holiday lets are up to four times more profitable than long-term rentals. 

Just how remunerative they are can depend on many factors (occupancy rate, location etc), but according to Spanish property portal Housfy, a tourist let provides an average net profit of 15 percent a year.

With this in mind, it’s no surprise that tourist apartments have proliferated across the country: 9.2 percent alone in the last year, which adds up to around 60,000 new ones.

As Spain welcomes more and more tourists (84 million in 2023, a record that looks set to be beaten in 2024), you’d expect the goose that laid the golden eggs to continue plugging away.

However, the simmering resentment from disgruntled residents who blame mass tourism and holiday lets for their spiralling rents does appear to be having an impact. 

OPINION: Spaniards should blame landlords, not tourists

There is currently no outright nationwide ban in Spain on Airbnb-style lets, but a growing number of small towns and big cities have taken action in recent weeks and months. 

From Dénia on the Costa Blanca to Pamplona in the north, municipalities across Spain are introducing temporary moratoriums on new licences for tourism apartments, which should in theory prevent new ones from popping up (there are tens of thousands of unlicensed holiday lets, especially in Madrid). 

READ ALSO: Which cities in Spain have new restrictions on tourist rentals?

Barcelona authorities have perhaps taken the toughest approach so far, as their mayor Jaume Collboni actually said there will be no more tourist rental flats in the Catalan city by 2028. 

READ ALSO: Can Barcelona really ban all Airbnbs?

So is it possible to envision a future where holiday lets are not allowed in Spain? And if so, would it be better for small and big investors to ditch plans to buy a Spanish property if the primary purpose of it is to let it out to tourists?

Hatred of holiday lets is on the up in Spain, the world’s second most visited country, prompting authorities to try and reconcile the interests of locals and those invested in this lucrative sector. (Photo by OSCAR DEL POZO / AFP)

Spain’ Housing Minister Isabel Rodríguez has on several occasions hinted at the need to “regulate tourist flats” rather than banning them entirely, although in July she did say “if we need to ban tourist flats, we will; if limiting them is enough, we’ll limit them”.

There’s been talk of legislation to ban holiday lets in residential apartment blocks, as well as putting a stop to temporary accommodation (longer than short-term lets but shorter than long-term rents). 

But in truth, things are moving slowly and the Spanish government appears to be somewhat sitting on the fence regarding restrictive measures, all too happy to pass the buck to the regions and individual town halls. 

There is clearly an awareness of all the vested interests in the holiday let industry, that not all landlords own a dozen properties, and even the legal implications of banning citizens from doing as they please with their assets.

What does seem clear is that city centre properties and those in the popular old quarters of Spanish cities and towns are most likely to be limited by local regulations, at least temporarily.

The same applies to tourist flats in residential buildings, as there is currently an amendment in the pipeline which would give communities of neighbours the power to veto new holiday lets in their blocks. 

Therefore, investors should consider whether properties that fall in these categories are future-proof in terms of short-term letting, and whether they’ll have to swap over to long-term letting at some point.

Spain’s latest Housing Law, which came into force in 2023 and sought to stop long-term rents from increasing, has actually led many landlords to either find loopholes or take their properties off the market. 

READ MORE: Why landlords in Spain leave their flats empt rather than rent long-term

With more demand and less stock, rents have logically continued to increase in 2024.

The legislation has clearly backfired, and with a boost in social housing a very long-term solution, Sánchez’s government may be forced into a corner and have to act vis-à-vis holiday lets if the situation becomes more untenable. 

READ MORE: Has Spain’s Housing Law completely failed to control rents?

A blanket ban is unlikely, as short-term rentals in more rural locations with fewer inhabitants have less of an impact on rents.

But buying a property in Spain in a central or sought-after residential area in Spain (especially in an apartment block) with the sole purpose of letting it out to tourists, now appears to have its risks as a long-term investment.

READ ALSO: VUT, AT or VV? Why Spain’s holiday let categories matter to owners

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