From the Renting Contract to the Renting Policy

The renting contract has two fundamental parties: a lessor and their lessee client. The former has a commercial asset to lease for a specific term. The latter is the interested lessee client who must pay periodic instalments according to the agreed terms in order to use the asset of their interest. In the renting contract, ownership, maintenance, and insurance related to the asset are the responsibility of the leasing entity, unlike in a leasing contract.

Sometimes, a leasing company is the one who acquires the product or asset in their own name and grants the benefit of its use to another. It is even common to find those that acquire it at the lessee's request. At the end of the contract, it can be extended, or includes the purchase option.

For these reasons, and above all, it is a very common contract for movable goods that can deteriorate quickly or depreciate over time. Thus, renting contracts are found, for example, in computer equipment, telephones, vehicles, or machinery.

The most common example of these contracts currently is the renting products produced by automotive companies. But this type of renting policy can be extrapolated at a business level, exemplifying companies that do not have sufficient assets to renew their distribution vehicle fleet and need them without purchasing them. Another example could be the usufruct of medical equipment such as scanners, X-rays, CT machines, PET CT, etc…

So, renting policies have certain common characteristics:

• They combine product financing with the contracting of services.
• It is possible to access assets without an initial outlay and allows the use of goods that cannot be purchased due to their price.
• It is not considered a financial product.
• Contracts are made for movable goods.
• There are penalties for early cancellation that can be specified in the contract.
• It is a type of contract that can range between 2 and 5 years, although it depends on the agreement between the policyholder and the lessor.

For lessees, leasing contracts offer advantages at a business level, avoiding a decrease in cash flow that could be allocated to the acquisition of assets. They also avoid financial burdens or credit fluctuations (since the fee is fixed). Furthermore, they are not responsible for maintenance or other administrative burdens. Likewise, they reduce financial risk as leasing companies are not affected by the depreciation of assets or their rapid obsolescence.

In the case of lessors, they also obtain benefits such as reducing the pressure to purchase assets, increasing billing, or obtaining a periodic income during the contract that provides financial stability. Additionally, it helps to build customer loyalty and even propose contract renewal. This loyalty contributes to reducing the risk of non-payment. The ownership of the asset will always belong to the lessor, which allows it to be rented to another customer or resold once it has depreciated.

The main difference between a renting contract vs leasing is that there is no purchase option for the lessee. In this case, the ownership never belongs to the client.

Furthermore, in leasing, the lessee must take care of the obligations related to maintenance and insurance, whereas in a renting contract, it is the lessor who takes care of these.

The leasing fee may be tax deductible in the Corporation Tax or in the Personal Income Tax (if self-employed), and reduces the taxable amount.

Tenants of the asset who must pay VAT may deduct it from their leasing fees as long as the asset is related to their economic activity. They may also deduct the amount of the leasing fees as an expense in their accounting, which reduces the taxable base for Corporation Tax or Personal Income Tax.

The Notary intervenes in renting contracts offering legal security and explaining the clauses in detail in an impartial manner. They grant validity, certifying with their signature that the parties have consented to the agreement voluntarily and consciously. This type of contract, formalised before a Notary in the form of a policy, is known as a renting policy.

Thus, this policy facilitates enforcement in the event of breach of the agreed terms through judicial means, since the notarial renting policy prevents challenges before a court and reduces the risk of litigation. This means that its clauses can be applied without the need for a trial and that the creditor can resort to the seizure of assets.

The Notary will legitimise the signatures and keep the original signed document safe. They will issue the necessary copies for the signatories.

Contact Notarios online to have your contract intervened, regardless of the location, to effectively carry out the intervention and signing of the renting policy.

For it to take place before a Notary, you must attend together with the representative of the company granting the renting.

• If it is a leasing for an individual, identification document of the person receiving the leasing.
• If it is a leasing policy for a company, identification documents of the administrator.
• Policy with the conditions (it is advisable to send it days before signing by e-mail).

The fees to be paid to process a renting contract before a Notary are regulated in the notarial tariff. The cost of the policy depends, among other aspects, on the amount of the debt and the number of pages of the policy.

The price of notarial acts is regulated by the Government and complies with the regulatory framework of the NOTARIAL TARIFF (RD 1426/1989, of 17 November, regulating the Notaries' Tariff).

Despite this exhaustive regulation, the exact price of a notarial document cannot be calculated until its specific content is known, that is, until it is signed, as there are many circumstances that can cause it to vary. The number of copies requested of a document, the amount of the transaction, the pages it contains, as well as possible changes or additions, can slightly alter the final price.

If you wish to receive a detailed quote, we invite you to contact us directly through the method that is most convenient for you. You can do so via the contact form on the main page of this website, through the contact section found in the footer of the website, using the WhatsApp shortcut at the bottom right of this page, by sending an email to bcn@jlanotarios.com or by calling us at 93 159 17 62.

As a guideline, we can inform you that, according to the current regulatory framework, the usual price for the formalisation before a Notary of a RENTING POLICY requested by a company for an amount of €50,000 with a maturity exceeding 6 months is around €250, including VAT.

This indicative price is calculated for a document of usual content, requested by a company and requiring commercial information about it.