The most common type of business for sale in Tenerife  is known as a traspaso.  Basically, the landlord owns the building shell while you own everything else unless stated.

Traspaso leases should not be taken on for less than five years and are sometimes offered for an indefinite period. The initial five years  can usually be renewed for another term without payment of a further premium.

The rent is fixed in the contract and can thereafter only be increased by the annual cost of living index as published by the Spanish government. Important differences to your benefit between a traspaso and the British lease equivalent concern your position if the lease is broken. In the UK you can be held responsible for the full term regardless of what happens, in Spain you need only give two months notice and can then pass the property back to the landlord.

Should you decide to sell / transfer after a few years, the landlord will normally agree a new lease term to the buyer as per your original contract (i.e. 5 years) rather than the balance of the years remaining. The landlord cannot terminate the lease for any reason other than non-payment of the rent and this only via the court system which can be rather slow.

Thanks to Business Finder Tenerife for this clarification. Having many years experience in buying and selling operational businesses on the island, they are a great source of information on Tenerife business in general and the place to go when looking to buy your own business in Tenerife.

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