What a master lease is and how it works for a Málaga hostal

What a master lease is, how the contract works, what the owner earns, what happens to a hostal licence and how to compare it with selling or managing.

If you own a building, a hostal or a pensión in Málaga, three kinds of call reach you in 2026: the buyer who wants to purchase it, the manager who wants to run it for a commission, and the operator who wants to lease the whole thing and pay you a fixed rent every month. The industry calls that third option a master lease. It is the model limehome and Numa grow with across Europe, and the one AltaHomes proposes for buildings and hostales in Málaga. Here is what it is exactly, how the contract is structured, what you earn and what you give up, what happens to a hostal licence, and how to compare it with selling or with commission-based management.

Last reviewed: 4 October 2026.

What a master lease is and why it is called that

A master lease is a long-term lease of a whole property, signed between the owner and a professional accommodation operator. The operator pays a fixed monthly rent, takes on the operation and sublets the units by the night, week or month to guests. It is called "master" because that contract sits above every sublet that hangs from it: you have one tenant, the operator, and the operator has hundreds a year.

Spanish law has no figure by that name. What gets signed is a lease for a use other than housing under the Urban Leases Act (LAU), with subletting by stay expressly authorised. If what you lease is a working hostal, with its licence, furniture and clientele, the contract can be set up as a lease of a going concern (arrendamiento de industria), governed by the Civil Code rather than the LAU. Your lawyer picks the figure; the economics are the same: fixed rent for you, operation for the operator.

The formula is neither new nor exotic. According to trade press, limehome signs leases of up to 20 years with building owners and almost half of its recent European deals are with landlords who had signed with it before. The funds buying buildings for tourist use in Málaga are looking for exactly that: an operator who will sign a master lease. What changes with AltaHomes is scale and proximity: we work with small and mid-sized buildings and hostales, and you talk to the founders.

How the contract is structured

A serious master lease has five parts, and all five must be in writing before anything is signed.

Term. The operator invests in the set-up and the commercial launch, so it needs time to recover that. Large operators usually sign between 10 and 20 years; smaller assets see shorter terms with agreed extensions. A long term gives you predictability; in return, make sure the contract says what happens if the operator defaults or if you want to sell.

Rent. Fixed and monthly, with an agreed annual update (CPI, a fixed percentage or steps). Some contracts add a variable part on the operator's revenue, the so-called hybrid rent: less fixed income in exchange for a share of the good years. A rent-free period during the initial works is common.

Guarantees. The LAU sets a minimum deposit of two months' rent for leases for a use other than housing, and it is normal to add a bank guarantee or a larger deposit. Always ask who answers if the operator stops paying and how quickly you get the property back. Sonder's collapse in 2025, which according to the press left buildings empty overnight in several countries, is the reminder that the operator's solvency is part of the contract.

Cost split. Usually the operator takes utilities, cleaning, routine maintenance, operating insurance and activity taxes, and the owner keeps property tax (IBI), community fees, building insurance and the structure. IBI and extraordinary community levies are negotiated. In our proposal the split comes as a table, line by line.

Set-up and improvements. Who pays the initial refurbishment, over what period it is recovered and what happens to improvements when the contract ends. The general rule is that fixed improvements stay with the building, that is, with you. Furniture and technology usually belong to the operator.

What you earn and what you give up

With commission-based management your income is what the units bill, minus the manager's commission (at AltaHomes, between 15% and 25% depending on the service) and minus operating costs. It varies every month, and you carry the low seasons, the breakdowns and the vacancies.

With a master lease you receive the same amount every month, guests or no guests. The fixed rent usually sits below what a good operating year would leave you net, and above what a bad year leaves. That difference is the price of certainty and of managing nothing. If an operator offers you a rent equal to the best operating scenario, be wary: either the numbers were not done or they will not be honoured.

Three questions decide which model suits you:

• Do you want to be involved? If the business interests you and you accept the variability, commission usually yields more over time.
• Do you need predictability? Inheritances with several heirs, financing that demands a stable cash flow or an owner who lives abroad usually prefer fixed rent.
• Does the asset need an investment you do not want to make? A master lease with the set-up paid by the operator solves both at once.

If you prefer commission for your building, the detail is on our property management page. If you want to compare both figures with your asset's real numbers, ask for a master lease proposal: we deliver it with the commission scenario alongside.

Hostales and pensiones: what happens to the licence

Andalusian hotel regulations require the whole establishment to be run by a single operator, what the rules call the unit of operation, and they allow that operator to be someone other than the owner. That is why a hostal can be leased whole to an operator without touching the licence: the change of operator is formalised with the contract and a notice to the Andalusian Tourism Registry. The building stays yours and the licence stays attached to the establishment.

This matters more in 2026 than it did two years ago. Since 25 July, Málaga admits no new tourist accommodation on residential land, so a live hostal or pensión licence is a scarce asset. An operator cannot create one; it can only lease yours. The detail is in our regulations guide.

Before signing, check three things: that the licence is current in the Tourism Registry, that the building has no pending enforcement orders, and that the contract says who pays for adaptations an inspection might require.

Basic tax for the owner

Here something important changes compared with letting a flat to a family. Leasing a property to a company that runs it as accommodation is not VAT-exempt: the rent carries 21% VAT, you issue a monthly invoice and the operator deducts it. If you are an individual, the operator also withholds income tax on account from the rent (currently 19%, with exceptions), which you then offset in your return. If the building sits in a company, it pays corporate income tax.

The costs you keep (IBI, community fees, building insurance, depreciation) remain deductible. The general framework is in our regulations guide, and for your own case speak to your adviser before signing, not after.

Sell, commission or master lease: how to compare with numbers

• Get a real sale valuation from an agent who has closed building or hostal deals in Málaga, not the portal estimate.
• Get a unit-by-unit operating projection under commission, with justified occupancy and average rate, and subtract commission and costs.
• Get a written fixed-rent proposal with term, update, guarantees and cost split.
• Compare the annual net cash flow of the three options and, above all, their risk: what happens in a bad year under each.
• Add what a sale makes disappear: the building's future appreciation and the option to sell later with the contract in place. A building leased to a solvent operator sells as an investment asset, with a tenant and a known rent, which usually improves the price compared with selling it empty.

What to ask an operator before signing

• Who really operates the units and how many it has today. Ask to see the public reviews.
• Who looks after the guest and at what hours. At AltaHomes it is our own team, on WhatsApp, 24/7.
• Whether it has its own direct channel or depends entirely on the platforms. An operator that lives only off Airbnb is more fragile when the rules change.
• What happens if it stops paying: guarantee, termination period and recovery of the property.
• Who pays the refurbishment and what stays in the building when the contract ends.
• Which insurance covers the operation and which you keep paying.

What is the difference between a master lease and guaranteed rent?

Guaranteed rent is a master lease at small scale: the same fixed-rent lease, but over a single holiday let. AltaHomes offers it for licensed VUT apartments on our guaranteed rent page. A master lease is the version for a whole building, a hostal, a pensión or a small hotel, with a longer term and a negotiated set-up.

How long does a master lease last?

It depends on the asset and the initial investment. In the industry, large operators sign between 10 and 20 years; small buildings and hostales see shorter terms with agreed extensions. What matters is that the term, the extensions and the early exits are in writing.

Can I sell the building with a master lease in place?

Yes. The contract goes with the property: the buyer becomes the landlord and keeps receiving the rent. In fact, a building with a solvent operator inside sells as an investment asset, with a tenant and a known rent, which usually makes the sale easier.

Who pays for the refurbishment in a master lease?

It is negotiated and written into the proposal. Usually the operator pays the operational set-up (furniture, smart locks, technology, paint) and structural works or works required by regulation are shared or paid by the owner, sometimes in exchange for a rent-free period or a slightly higher rent. Fixed improvements stay with the building at the end.

Is it legal to lease a licensed hostal to an operator in Andalusia?

Yes. Andalusian hotel regulations require a single operator per establishment and allow it to be someone other than the owner. The change of operator is notified to the Andalusian Tourism Registry and the licence stays attached to the establishment. What cannot be done is splitting the operation among several operators.

Official sources and references

• Urban Leases Act (Ley 29/1994), consolidated text (articles 3, 32 and 36)
• Decree 47/2004 on hotel establishments in Andalusia, consolidated text
• Junta de Andalucía: hotel establishments in the Tourism Registry
• Spanish Tax Agency: VAT on holiday apartment rentals
• Serviced Apartment News: repeat partnerships drive limehome's European growth
• limehome: lease your property to limehome

This page informs, it does not advise. The terms, rents and cost splits described are the usual ones in the industry, not an offer; ours comes in writing after visiting the asset. For the contract type and the tax treatment of your case, speak to your lawyer and your adviser.

If you own a building, a hostal or a pensión in Málaga and want to know what fixed rent it supports, tell us. Our master lease page explains how we work and has the form to request the proposal, which we deliver with the commission scenario alongside so you compare with numbers.