If you own a property in Spain, perhaps a holiday home that you rent out for the rest of the year when you're not using it, a great way to make some extra money is by renting it out. While renting a property means extra money at the end of the month, more and more landlords in Spain are having problems with their tenants who are breaking rental agreements. Non-payment of rent is one of the problems which is on the rise, and in some of the worst cases, tenants have even owed money for years meaning tenant eviction in Spain is the only solution. As a landlord, what can you do if tenants aren't paying rent?
Tenant eviction in Spain
According to data from Spain's "Consejo General del Poder Judicial" (General Council of the Judiciary), the number of evictions carried out in Spain in the second quarter of 2021 was 11,571, an increase on the previous quarter (10,961) and the same period last year (7,096).
What can I do if tenants aren't paying rent?
A wake-up call
Spain's largest consumer organisation, OCU, advises a landlord to first of all bring the problem to the tenant's attention, either by telephone or in writing. If the tenant does not respond, you will have to claim the payment again, but by a reliable means, that is to say, by means that involve legal proof: burofax, notarial channels, or judicial conciliation. If the tenant still does not pay, there is no choice but to go to court.
Act quickly
According to Arantxa Goenaga, lawyer and partner of the law firm Círculo Legal Barcelona, when there is a non-payment of rent, the most important thing is for the landlord to act quickly and, from the first time a non-payment occurs, to demand that the tenant pays and fulfils his obligations.
"It is important to act quickly for several reasons: firstly, because the tenant sees that we are watching and we remind him of his non-payment so that he does not think that he can stop paying without any consequences. Secondly, it is important to make a written complaint so that it is on record and can be proven; and thirdly, if the tenant fails to pay in the first month, take legal action to terminate the rental contract because, logically, the courts take some time to initiate legal proceedings and this will be done in advance in order to recover possession as soon as possible and not have more months of non-payment than necessary".
Studying the tenant's solvency beforehand
According to Jesús Duque, vice-president of Alfa Inmobiliaria, this problem can be avoided beforehand with the help of a professional, "not only managing the visits of interested parties or setting the price, but what is much more important: studying the solvency of the potential tenant by consulting defaulter records, drawing up the contract so that it is perfectly in line with Spain's Rental Law (LAU), depositing the deposit with the corresponding body, and even managing the contracting of an insurance policy against non-payment". He comments that there are even companies that guarantee the rent to the landlord, as they are the ones who pay the landlord, for which they charge a percentage.
The steps to follow in the event of non-payment of rent in Spain
You can claim what is owed, or terminate the contract and request eviction for non-payment, or both at the same time. The OCU reiterates that, if the tenant is solvent, you should claim what you owe. If not, it is not worth it, since, in addition to not being paid anything, you will have to bear the costs of the judicial process. It is better to focus on resolving the contract and recovering the property.
Alfa Inmobiliario stresses that the landlord must file a lawsuit in court and prove that the tenant has not paid the rent. If the court decides in favour of the landlord, the tenant must leave the property and pay the amount of rent owed. On the other hand, lawyer Arantxa Goenaga stresses that sometimes it is not necessary to start legal proceedings immediately because it is a one-off problem of the tenant's liquidity and a way can be found to solve it, "but you always have to act quickly and you have to see that the property is pending because if the tenant thinks that they don't realise, the non-payment can start to become habitual".
What are the legal consequences of non-payment of rent?
The fundamental consequence, says Goenaga, is that of breach of contract, the obligation to pay is breached and this can lead to the termination of the contract for non-payment. Just one month's non-payment can lead to the termination of the contract.
- Protect yourself against defaulters in Spain, with BDMI, idealista's defaulting tenant's database.