ANDORRA Law and Practice Contributed by: Elena Redondo, Albert Hinojosa and Marc Ambrós, Cases & Lacambra
agreement, the rent shall be paid monthly, within the first five days of each month. 6.5 Rent Variation The rent is freely agreed upon between the land - lord and the tenant. During the contractual term, and if the parties have agreed on no price adjust - ment system, the landlord and the tenant may adjust the rent at the end of each contractual year in accordance with the percentage varia - tion experienced by the general Consumer Price Index or the other price adjustment mentioned in 6.3 Regulation of Rents or Lease Terms . 6.6 Determination of New Rent Any increase in the rent is determined in accord - ance with the general Consumer Price Index or according to variables such as turnover or oper - ating income. See 6.3 Regulation of Rents or Lease Terms and 6.5 Rent Variation . 6.7 Payment of VAT Commercial leases are subject to local VAT, called Indirect General Tax ( Impost General Indi- recte – IGI), at 4.5%. Residential leases are subject to IGI at a 0% rate. 6.8 Costs Payable by a Tenant at the Start of a Lease The tenant has an obligation to arrange an insur - ance policy that covers at least the risk of fire, explosion, water leaks and civil liability for dam - ages, to sign up for the national electricity com - pany through an electricity journal, to pay taxes related to the economic activity that will take place, and sign up in the trade register. 6.9 Payment of Maintenance and Repair The tenant is obliged to pay the expenses that arise from the services and utilities supplied to the real estate that they can use. This considera -
tion is derived from the use of common elements of the property, parking lots, gardens, porter’s lodge services, and the supply of water, elec - tricity, heating, telephone and other analogues. 6.10 Payment of Utilities and Telecommunications In order to collect payment for the supply of utili - ties and telecommunications services, the land - lord must justify the amount to the tenant. If the real estate is enjoyed by more than one tenant, the total cost is distributed among them, accord - ing to the surface of each floor, unless the par - ticipation fees are set for each floor or premises. This does not apply if there are individual meter boxes, in which case the tenant will pay accord - ing to what the individual meter box indicates. The agreement of a previously fixed amount for all services is valid. 6.11 Insurance Issues The landlord is obliged to sign and maintain an insurance policy that sufficiently covers the damages that could be caused to the tenant and third parties. The tenant is obliged to arrange an insurance policy that covers the risks of fire, explosion, water leaks and civil liability for damages, to sign up for the national electricity company through an electricity journal, to pay taxes related to the economic activity that is going to take place, and to sign up to the trade register. 6.12 Restrictions on the Use of Real Estate The landlord is entitled to terminate the lease agreement if the tenant: • changes unilaterally the destination of the leased real estate asset and persists in this
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