A tenant's failure to pay rent is a major concern for every homeowner. Understanding which legal options are effective in dealing with this type of situation is vital to avoiding potential headaches. We invite you to continue reading to learn more about this topic.
In Spain, a landlord can begin legal proceedings after one month of non-payment of rent. To do so, once the lease agreement has begun, it is necessary to establish a specific payment deadline within the month, for example, the tenant is required to pay within the first seven days of the month. If the tenant does not pay within that period, the landlord can begin legal proceedings.
If you are facing non-payment of rent by a tenant, it is best to start by talking to them to reach an amicable agreement. If no agreement can be reached, it is advisable to proceed with legal action. Here are the steps you can take in this situation:
Before initiating any legal action, it is advisable to review the rental or lease agreement to validate the clauses and penalties previously established in the event of non-payment. Sometimes the contract already has predetermined clauses that include specific actions in the event of non-payment, such as interest for late payment or termination of the contract.
If the contract does not include these tools, you must proceed in accordance with current Spanish legislation, whereby the owner has up to 30 days to file a claim for non-payment.
If the tenant does not respond, send them a notarized letter requesting timely payment. This letter should specify the amount owed, the deadline, and the consequences. If the tenant ignores the letter and does not make the payment on time, you can begin the eviction process.
This is the legal action that obliges the tenant to pay the rent debt and corresponds to the legal action of requesting eviction. We will give you details of this process later on.
If the tenant continues to fail to pay rent, here is a guide on how to proceed:
As mentioned above, the first option prior to eviction proceedings is a notarized letter or certified fax requesting the tenant to pay the outstanding debt. It is advisable to specify a specific payment deadline in this letter, for example 15 days, for the debtor to pay voluntarily. If the non-payment persists, eviction proceedings may be initiated.
It is the legal tool that allows property owners to regain possession of the home or premises in the event of non-payment of rent by the tenant. It is filed in the court of first instance when the tenant continues to evade payment of rent after receiving the notarized letter. This requires the intervention of a lawyer to sign the lawsuit, which seeks to evict the tenant and recover the rent.
Stages of the eviction procedure:
You may be interested in: eviction: what it is.
This involves claiming payment of outstanding rent, which can be done as part of the eviction process itself or as part of a process called a payment order. We will go into more detail about the latter.
The minimum period for a rental eviction to take effect can be up to six months. In some cases, it can be extended to 12 months. Among the factors that can influence the length of this process is the workload of the courts, where the backlog of cases leads to delays in closing them; another reason could be opposition from the tenant, who may file extensions or appeals.
There are also processes that may take longer if the tenant is in a vulnerable situation. Finally, the trial date begins after the court notification, and if the notification is delayed, so are the rest of the proceedings.
If you have already recovered the property but the tenant still owes rent, you can do the following:
You can file what is known as a small claims procedure in the court of first instance to claim the debt. To do so, it is important to gather all the supporting documentation, such as the initial certified fax, unpaid invoices, and correspondence with the tenant.
The court will proceed by sending a notice to the tenant demanding payment within 20 business days. If payment is made, the case will be closed.
If the debt is not paid, the judge will have the power to issue an enforcement order allowing the seizure of assets or bank accounts in the tenant's name until the total amount owed is covered.
According to the Civil Procedure Act (LEC), different types of the tenant's property can be seized:
Money and bank accounts: As mentioned above, the judge orders the bank to freeze the tenant's account and transfer the funds to pay off the debt. If the funds are insufficient, other assets are seized.
Salaries and pensions: The tenant's income may be seized, although it is mandatory to respect the amount of the Minimum Interprofessional Salary (SMI), which is unseizable. This means that if the tenant earns less than the SMI, their salary cannot be seized. In cases where the salary income is higher than the SMI, the percentage of the seizure will be governed by a scale defined by the LEC.
Movable and immovable property: Property such as jewelry, vehicles, appliances, works of art, or any other valuable assets registered to the tenant may also be seized. In advanced and extreme cases, real estate may also be seized.
No possession of seizable assets: If the tenant does not possess any seizable assets, they may request that the debt remain active until they have income or assets. This means that the landlord will have to wait for some time, which unfortunately may be longer, to effectively collect the outstanding payment.
There are several strategies that property owners can implement prior to entering into a rental agreement in order to avoid unfavorable situations such as non-payment.
It is advisable to conduct a credit check where the tenant provides bank and employment references to confirm that they will be able to pay rent in the medium and long term.
It is advisable to ask the tenant to provide documentation such as pay slips, employment contracts, tax returns, or bank statements. With this information, you can verify that they have sufficient and stable income to pay the rent.
The real estate delinquency database (BDMI) is a registry that provides access to useful information to avoid entering into lease agreements with individuals who are reported as repeat debtors.
You can add a legal deposit to the lease agreement, which, according to rental law, can cover one month's rent. You can also request an additional guarantee to cover a second month or take out non-payment insurance.
Keep strict track of payments, agreeing on an automatic payment method, payment reminders if there are delays, and acting quickly in the event of non-payment.
If possible, obtaining references from previous landlords will allow you to assess whether it is worthwhile to continue the lease agreement process with the tenant.
Non-payment insurance is an excellent tool for covering rent payments in the event of non-payment. To take out this type of insurance, the insurer first analyzes the tenant's profile to determine their solvency, generally requiring them to have a permanent contract or to certify a stable monthly income.
If the tenant stops paying, the insurance company will pay the landlord the monthly rent up to the contracted limit, which can be between 6 and 12 months. They also provide legal advice on filing an eviction lawsuit against the tenant.
Some insurance policies offer additional benefits such as repair of damage caused by vandalism committed by the tenant, coverage of services not paid for by the tenant, and legal assistance.
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Non-payment of rent is a common concern for all homeowners interested in making a profit from renting out a property. It is essential to carry out a detailed study of candidates and their solvency, check the defaulters register, and add clauses covering a couple of months' rent to initiate legal proceedings if necessary. With detailed strategic planning, you can manage a rental without any headaches.
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