ANDORRA Law and Practice Contributed by: Elena Redondo, Albert Hinojosa and Marc Ambrós, Cases & Lacambra
Sale of Properties This is subject to capital gains tax, which the seller pays at a rate of 0–25%. No stamp duty applies to the seller or buyer. 6.12 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. 6.13 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 action for more than six months during the year; • subleases or transfers totally or partially the leased asset without prior consent from the landlord; • causes harm to the leased asset due to wilful misconduct or gross negligence, or carries out construction works that alter the struc - tural configuration of the leased asset or its common elements; • breaches the essential conditions of the lease agreement (or breaches the conditions spe - cifically determined as being essential in the lease agreement); or • carries out notoriously immoral, dangerous, annoying or insalubrious activities within the
leased asset or when such activities affect the leased asset’s common elements. Furthermore, any activity other than residential use shall require correspondent authorisation from the competent authority ( Comú ). 6.14 Tenant’s Ability to Alter and Improve Real Estate Within limits provided for in 6.13 Restrictions on the Use of Real Estate , the tenant may alter or improve the leased asset by carrying out repairs needed due to deterioration through normal or abnormal use. The Urban Rents Law of 30 June 1999 ( Llei d’arrendaments de finques urbanes ) does not thoroughly regulate the introduction of improve - ments to the leased asset by the tenant. Thus, there is no obstacle to the tenant introducing improvements to the leased asset, usually sub - ject to the landlord’s consent. Upon the termination of the lease agreement, the tenant is entitled to revert the improvement works introduced to the leased asset if it can do so without causing harm to the asset. The minimum legal term for commercial leases is four years. However, if the tenant carries out improvement works that result in a cost exceed - ing the equivalent of three years’ rent, they have the right to require an extended lease term of up to seven years. In this situation, the landlord is obliged to accept this extension. 6.15 Specific Regulations There are no specific regulations and/or laws that apply to leases of particular categories of real estate, such as residential, industrial, offic - es, retail or hotels, other than the Urban Rents
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