A tenant’s failure to pay rent is a major concern for any homeowner. Understanding which legal options are effective in handling this type of situation is essential to avoid potential headaches. We invite you to continue reading to learn more about this topic.
In Spain, a landlord may begin legal proceedings after one month of non-payment of rent. To do so, once the lease agreement has been signed, it is necessary to establish a specific payment deadline, for example, requiring the tenant to pay within the first seven days of the month. If the tenant does not pay within that period, the landlord may initiate legal proceedings.
If you are facing non-payment of rent by a tenant, it is best to start by speaking with them to try 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 follow in this situation:
Before initiating any legal action, it is advisable to review the rental or lease agreement to validate the clauses and penalties established in the event of non-payment. In some cases, the contract includes specific provisions for late payment, such as late fees or termination of the agreement.
If the contract does not include these provisions, you must proceed in accordance with current Spanish legislation, under which the landlord 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. The letter should specify the amount owed, the payment deadline, and the consequences of nonpayment. If the tenant ignores the letter and fails to pay on time, you may initiate the eviction process.
This refers to the legal action that requires the tenant to pay the outstanding rent and corresponds to the legal process of requesting eviction. We will provide more details about this process later.
If the tenant continues to fail to pay the rent, here is a guide on how to proceed:
As mentioned, the first step before initiating the eviction process is a notarized letter or burofax requesting the tenant to pay the outstanding debt. It is recommended that this letter specifies a set deadline for payment, for example, 15 days, to allow the debtor to pay voluntarily. If nonpayment persists, the eviction lawsuit is filed.
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 process:
You may be interested in: What is eviction?
It involves claiming payment of the outstanding rent, which can be done within the same eviction proceeding or through a separate process known as a summary debt collection procedure (procedimiento monitorio). We will go into more detail about the latter.
The minimum timeframe for a rental eviction to become effective can be up to six months. In some cases, it may extend to 12 months. Among the factors that can influence the length of this process is the court’s workload, as a backlog of cases can delay their resolution. Another possible reason is the tenant’s opposition, such as filing extensions or legal objections.
There are also cases that may take longer if the tenant is considered to be in a vulnerable situation. Finally, the court date begins to run after the judicial notification is served; if the notification is delayed, the rest of the proceedings will be delayed accordingly.
If you have already recovered possession of the property but the tenant still owes rent, you can proceed as follows:
You can file what is known as a summary debt collection procedure (procedimiento monitorio) before the Court of First Instance to claim the debt. To do so, it is important to gather all supporting documentation, such as the initial registered notice (burofax), unpaid invoices, and any communications exchanged with the tenant.
The court will proceed by sending a notice to the tenant demanding payment within 20 business days. If the 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 outstanding amount is paid.
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 may order the financial institution to freeze the account in the tenant’s name and transfer the available funds to cover the debt. If the funds are insufficient, other assets may be seized.
Wages 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 garnished. If the income exceeds the SMI, the percentage subject to garnishment will be determined according to the scale established by the Civil Procedure Act (LEC).
Movable and immovable property: Assets such as jewelry, vehicles, appliances, artwork, or any other valuable property registered in the tenant’s name may also be subject to seizure. In advanced or extreme cases, real estate assets may likewise be seized.
Lack of attachable assets: If the tenant does not own assets that can be seized, the debt may remain outstanding until they have income or assets available. This means the landlord may have to wait—sometimes for an extended period—before being able to recover the unpaid amount.
There are several strategies that property owners can implement before entering into a lease agreement in order to avoid unfavorable situations such as nonpayment.
It is advisable to conduct a financial solvency assessment in which the tenant provides bank and employment certifications to verify that they will be able to pay rent in the medium and long term.
It is advisable to request documentation from the tenant 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 useful information to help avoid entering into lease agreements with individuals who are reported as repeat debtors.
You can include a security deposit in the lease agreement, which under rental law may cover one month’s rent. You may also request an additional guarantee to protect a second month’s rent or arrange rent default insurance.
Maintain strict control over payments by agreeing on an automatic payment method, sending reminders in case of delays, and acting quickly in the event of nonpayment.
If possible, having 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 tool to protect rental income in the event of nonpayment. To take out this type of insurance, the insurer first evaluates the tenant’s profile to determine their financial solvency, generally requiring a permanent employment contract or proof of stable monthly income.
If the tenant stops paying, the insurance company will compensate the landlord for the monthly payments up to the contracted limit, which may range from 6 to 12 months. They also provide legal assistance to file an eviction claim against the tenant.
Some insurance policies include additional benefits such as coverage for damage caused by tenant vandalism, unpaid utilities, and legal assistance.
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Nonpayment of rent is a common concern among property owners who seek to generate income from leasing a property. It is essential to conduct a thorough screening of potential tenants, assess their financial solvency, review delinquency records, and include clauses that cover a couple of months of rent in order to initiate legal proceedings if necessary. With careful strategic planning, you can manage a rental property without major headaches.
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