A tenant’s failure to pay rent is a major concern for any homeowner. Understanding which legal options are effective for handling these types of situations is vital to avoiding potential headaches. We invite you to keep reading to learn more about this topic.
In Spain, a landlord can initiate legal proceedings one month after failing to receive rent payment. To do so, and once the lease agreement begins, 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 fails to pay within that period, the landlord can initiate legal proceedings.
If you’re dealing with a tenant who hasn’t paid rent, the best approach is to start by talking to them to reach an amicable agreement. If you’re unable to reach an agreement, it’s advisable to take legal action. Here are the steps you can take in this situation:
Before taking any legal action, it is advisable to review the rental or lease agreement to verify the clauses and penalties previously established in the event of a failure to pay. Sometimes the agreement already includes standard clauses that specify actions to be taken in the event of nonpayment, such as late payment interest or immediate termination of the agreement.
If the contract does not include these provisions, the matter must be handled in accordance with current Spanish law, under which the landlord has up to 30 days to file a lawsuit alleging non-payment.
If the tenant does not respond, send them a notarized letter requesting prompt payment. The letter should specify the amount owed, the deadline, and the consequences. If the tenant ignores the letter and fails to make the payment on time, you may initiate eviction proceedings.
This refers to the legal action that requires the tenant to pay the rent owed and is part of the legal process to seek eviction. We will provide more details about this process later.
If the tenant continues to fail to pay rent, here is a guide on how to proceed:
As mentioned, the first step before initiating eviction proceedings is to send a notarized letter or certified fax requesting that the tenant pay the outstanding debt. It is advisable to specify a specific payment deadline in this letter—for example, 15 days—so that the debtor can settle the debt voluntarily. If the tenant continues to refuse to pay, eviction proceedings may be initiated.
It is the legal remedy that allows property owners to regain possession of a residence or commercial space in the event that a tenant fails to pay rent. It is filed in the court of first instance when the tenant continues to evade rent payment after receiving the notarized letter. This requires the involvement of an attorney to sign the complaint; this process aims to evict the tenant and recover the rent.
Stages of the eviction process:
You might be interested in: What is eviction?
This involves claiming payment of overdue rent, which can be done either as part of the eviction proceedings or through a process known as a payment order; we will go into more detail about the latter.
The minimum timeframe for a rental eviction to take effect can be as long as six months. In some cases, it can extend to 12 months. Factors that can influence the length of this process include the caseload of the courts, where a backlog of cases leads to delays in resolving them; another reason could be the tenant’s opposition, which involves filing motions for extensions or submitting arguments.
There are also cases that may take longer if the tenant is in a vulnerable situation. Finally, the trial date begins to run from the date of service of process; if service is delayed, so are the rest of the proceedings.
If you have already regained possession of the property but the tenant still owes rent, you can do the following:
You can file what is known as a debt collection proceeding with the court of first instance to recover the debt. To do so, it is important to gather all supporting documentation, such as the initial certified letter, unpaid invoices, and correspondence with the tenant.
The court will send 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 authority to issue an enforcement order allowing for the seizure of assets or bank accounts held in the tenant's name until the full amount of the arrears is covered.
Under the Civil Procedure Act (LEC), various types of the tenant’s property may be seized:
Money and bank accounts: As mentioned, the judge orders the bank to freeze the tenant’s account and transfer the funds until the debt is paid. If the funds are insufficient, other assets are seized.
Wages and Pensions: A tenant’s income may be garnished, although the amount of the Minimum Wage (SMI) must be respected, as it is exempt from garnishment. This means that if the tenant earns less than the SMI, their wages cannot be garnished. If the tenant’s income exceeds the SMI, the percentage of the garnishment will be determined according to a scale defined by the LEC.
Personal property and real estate: Assets such as jewelry, vehicles, household appliances, works of art, or any other valuable property owned by the tenant may also be seized. In serious or extreme cases, real estate may also be seized.
No attachable assets: If the tenant does not have any attachable assets, they may request that the debt remain outstanding until they have income or assets. This means that the landlord will have to wait for some time—which, unfortunately, may be quite a while—before receiving actual payment of the outstanding amount.
There are several strategies that property owners can implement before entering into a lease agreement in order to avoid unfavorable situations, such as non-payment.
It is advisable to conduct a credit check in which the tenant provides bank and employment statements to confirm that they will indeed be able to pay rent in the medium and long term.
It is advisable to ask the tenant to provide documentation such as pay stubs, 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 information useful for avoiding the signing of lease agreements with individuals who are listed as repeat debtors.
You can include a security deposit in the lease agreement; under rental law, this can cover one month’s rent. You can also request an additional guarantee to cover a second month’s rent or to provide protection against non-payment.
Keep close track of payments by setting up an automatic payment method, sending payment reminders if payments are late, and taking prompt action in the event of non-payment.
If possible, obtaining references from previous landlords will allow you to assess whether it is worth proceeding with the lease agreement with the tenant.
Rent default insurance is an excellent way to protect against unpaid rent. To purchase this type of insurance, the insurer first reviews the tenant’s profile to assess their creditworthiness; generally, the tenant must have a permanent employment contract or provide proof of a stable monthly income.
If the tenant stops paying rent, the insurance company will cover the monthly payments to the landlord up to the agreed-upon limit, which can range from 6 to 12 months. They also provide legal assistance in filing an eviction lawsuit against the tenant.
Some insurance policies include additional benefits such as coverage for damage caused by vandalism committed by the tenant, coverage for unpaid utilities, and legal assistance.
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Non-payment of rent is a common concern for all property owners looking to generate income from renting out a property. It is essential to conduct a thorough background check on prospective tenants, assess their creditworthiness, review credit reports, and include clauses covering a couple of months’ rent to cover the costs of initiating legal proceedings if necessary. With detailed strategic planning, you can manage your rental property without any headaches.
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