In Spain, the rental of orchards may be governed by the Civil Code, the Rural Leases Law (LAR), Law 49/2003, of November 26 or the Urban Leases Law, as the case may be.
There are several options available for those looking to rent an orchard, as there are different sized areas that are rented for different purposes. In these gardens, crops can be grown or the space can be used for animal husbandry.
However, before you start planting and harvesting your food, there is a period of bureaucracy and red tape.
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The first seeds: the formalities
One of the first steps in renting an orchard is to contact a company that provides this service, taking into account geographical proximity and your needs.
Once you have made contact with her, you will be on your way to having an urban garden for your crops. In a first meeting with her, you will be informed about the lease and the obligations you will have. In it, you will be able to find points such as:
- Orchard size
- Rental price and method of payment
- Irrigation features
- Type of plantations that can be made
- Duration of the contract
In addition, the contracted company will also show you the occupancy licence and the title deed of the property. An agreement will also be reached regarding a possible deposit, payments for water consumption or any other supplies you may need. However, the lessee will also have to prove that he/she has the solvency to maintain it. Thus, some documents that may be requested when renting an orchard are:
- Bills
- Payroll
What are the rights and obligations of those involved?
When renting an orchard, there are certain formalities and obligations on the part of both the tenant and the landlord. For example, among the conditions usually set for tenants of orchards is the right to have a space reserved for the storage of tools and equipment for cultivation and tillage.
Other rights and obligations when renting an urban garden are:
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Payment of rent: The rent agreed in the lease must be paid on the dates stipulated in the lease. If any problems arise in paying the rent, the landlord should be notified in advance.
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Care of the garden: The garden should be cared for in a responsible way, making sure it is kept in good condition. This includes soil care, irrigation and weed and pest control.
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Compliance with local regulations: Local regulations regarding the use of the orchard, such as rules on water use, chemical use and waste management, must be complied with.
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Insurance: It is advisable to take out insurance to cover the risks associated with the use of the garden, such as theft, damage caused by fire or flood, and personal accidents.
Legislation applicable to the rental of allotments
The LAR establishes the rules and conditions for the leasing of rural properties, including orchards that are not located on urban land.
Among other things, the law establishes the minimum contract duration of 5 years, the obligations and rights of the lessor and lessee, the procedures for the renewal of the contract, and the causes for termination of the contract, but this is focused on rustic farms focused on a crop.
The urban gardens have durations of 6 months, 3 months, even month to month as you can find among our gardeners.
In addition, there are some laws that contemplate this type of lease in our country:
- Ley de Arrendamientos Rústicos de 1980, Law 83/1980 of 31 December 1980. It has effect for contracts prior to 2004.
- The 2003 Law on Rural Leases, Law 49/2003 of 26 November 2003. For contracts from May 2004 to January 2006.
- Reform of this law by Law 26/2005 of 30 November 2005. For contracts from January 2006 onwards.
- The Civil Code (art. 1546 et seq.). For rural leases to which the special laws on rural leases do not apply.
Two possible scenarios
In case the lessor is carrying out an economic activity, he must issue an invoice including 21% VAT. If the tenant rents the orchard to carry out a business activity, he/she will be subject to a personal income tax withholding corresponding to the landlord.
In case the renting of the orchard is considered as an economic activity, it will be considered as income from real estate capital. In the event that the rental of the orchard is not considered an economic activity, it will be considered as income from real estate capital. This option is not subject to VAT or personal income tax withholding.
Many people have already decided to have their own vegetable garden, either rented or bought. The boom in this activity has shown that the philosophy of healthy living has taken root among us and more and more people are interested in organic products and want to have direct contact with their food and nature.
