What should I do if my tenant in Spain stops paying the rent?
If you own a property in Spain and rent it out long term, one of the worst situations you can find yourself in is having a tenant who refuses to pay the rent.
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As a landlord in Spain, you may be relying on the rent to pay your mortgage or maybe this is your full-time job and that rent is your income.
If you find yourself in a difficult situation where your tenant is not paying up, then what can do?
If your tenant is only a few days late with their rent, it’s best to give them the benefit of the doubt and contact them to find out what the problem is and when you can expect the payment.
But, when your tenant is more than a month late in paying the rent, you may have a bigger problem on your hands. In this case, there are certain steps you can take.
According to Article 27 of the Urban Leasing Law (LAU), non-payment of rent is grounds for termination of the contract and eviction.
This is true even if your tenant hasn’t paid up for one month. You will be able to fully terminate the lease and the tenant must leave the property.
READ ALSO: What Spain's new housing law means for you if you're a landlord
You can’t, however, simply evict them straight away, there are several steps you need to take to first try and sort the situation out amicably.
Your tenant may have a valid reason why they’re late on a payment, such as loss of work or an unforeseeable financial commitment.
Step one: Contact
The first step is to contact the tenant, either by phone or in writing. If they do not respond, then you will need to get in contact again, but this time provide legal proof of the contact.
You can do this by sending a burofax (a registered letter from Correos), a message through a notary, or an act of judicial conciliation. This may be enough to get the tenant’s attention and get what you’re owed, but if they still don’t pay up after being notified again, then you have the right to go to court.
READ ALSO: What’s the difference between a gestor, a lawyer and a notary in Spain?
Step two: Getting legal help
You have the choice either to claim what is owed to you, or terminate the contract and request eviction for non-payment at the same time.
If the tenant is solvent, the best option is to claim what they owe you. If it turns out that your tenant is in debt, then you may just want to dissolve the contract and evict them from the property so you can get a new tenant.
Step three: Going to court
The court process can be costly, so you need to work out whether or not it will be financially beneficial to you. Fees can vary greatly, but for non-payment of two monthly installments of €1,200, the cost of the trial can be anywhere between €800 and €4,000.
If you have any legal defense insurance, which your property insurance may cover, then you can use this.
In the case you think it will be beneficial and you want to go ahead, an eviction lawsuit will have to be filed, signed by a lawyer and a solicitor.
Once the court admits the claim, the tenant will be notified and a date will be set for the eviction, at which time they must return the keys and vacate the property.
The tenant will have one more chance to pay up and can do this before a notary. But, if you want the tenant out quickly, one option is to forgive the payments and simply get them evicted.
The best case scenario, however, is that you will be able to get back the money you are owed, as well as interest for late payment. This will depend on what type of financial position your tenant is in though.
If your tenant refuses to pay up and doesn't leave the property straight away, it may take a while before you can get your property back. The new Housing Law, states that if the tenant is in a vulnerable situation, a Court of Justice may set a period of suspension of two to four months.
How can I protect myself in the future?
While you can’t always predict what is going to happen to your tenant and what type of person they are, there are some steps you can take to protect yourself and your property to stop it from happening again.
- Make sure you have a good contract
- Ask for references from your tenant's previous landlords.
- Get proof of pay slips so you know they are able to pay.
- Ask for a guarantor who can pay up when your tenant can’t.
- Ensure you get a deposit – although deposits should be used for any damages, the Urban Leasing Law allows requesting an additional guarantee of two month’s rent so you may be able to keep this as compensation.
- Make sure you have good property insurance that covers you as a landlord. Some insurers cover non-payment of rent and the eviction process.
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As a landlord in Spain, you may be relying on the rent to pay your mortgage or maybe this is your full-time job and that rent is your income.
If you find yourself in a difficult situation where your tenant is not paying up, then what can do?
If your tenant is only a few days late with their rent, it’s best to give them the benefit of the doubt and contact them to find out what the problem is and when you can expect the payment.
But, when your tenant is more than a month late in paying the rent, you may have a bigger problem on your hands. In this case, there are certain steps you can take.
According to Article 27 of the Urban Leasing Law (LAU), non-payment of rent is grounds for termination of the contract and eviction.
This is true even if your tenant hasn’t paid up for one month. You will be able to fully terminate the lease and the tenant must leave the property.
READ ALSO: What Spain's new housing law means for you if you're a landlord
You can’t, however, simply evict them straight away, there are several steps you need to take to first try and sort the situation out amicably.
Your tenant may have a valid reason why they’re late on a payment, such as loss of work or an unforeseeable financial commitment.
Step one: Contact
The first step is to contact the tenant, either by phone or in writing. If they do not respond, then you will need to get in contact again, but this time provide legal proof of the contact.
You can do this by sending a burofax (a registered letter from Correos), a message through a notary, or an act of judicial conciliation. This may be enough to get the tenant’s attention and get what you’re owed, but if they still don’t pay up after being notified again, then you have the right to go to court.
READ ALSO: What’s the difference between a gestor, a lawyer and a notary in Spain?
Step two: Getting legal help
You have the choice either to claim what is owed to you, or terminate the contract and request eviction for non-payment at the same time.
If the tenant is solvent, the best option is to claim what they owe you. If it turns out that your tenant is in debt, then you may just want to dissolve the contract and evict them from the property so you can get a new tenant.
Step three: Going to court
The court process can be costly, so you need to work out whether or not it will be financially beneficial to you. Fees can vary greatly, but for non-payment of two monthly installments of €1,200, the cost of the trial can be anywhere between €800 and €4,000.
If you have any legal defense insurance, which your property insurance may cover, then you can use this.
In the case you think it will be beneficial and you want to go ahead, an eviction lawsuit will have to be filed, signed by a lawyer and a solicitor.
Once the court admits the claim, the tenant will be notified and a date will be set for the eviction, at which time they must return the keys and vacate the property.
The tenant will have one more chance to pay up and can do this before a notary. But, if you want the tenant out quickly, one option is to forgive the payments and simply get them evicted.
The best case scenario, however, is that you will be able to get back the money you are owed, as well as interest for late payment. This will depend on what type of financial position your tenant is in though.
If your tenant refuses to pay up and doesn't leave the property straight away, it may take a while before you can get your property back. The new Housing Law, states that if the tenant is in a vulnerable situation, a Court of Justice may set a period of suspension of two to four months.
How can I protect myself in the future?
While you can’t always predict what is going to happen to your tenant and what type of person they are, there are some steps you can take to protect yourself and your property to stop it from happening again.
- Make sure you have a good contract
- Ask for references from your tenant's previous landlords.
- Get proof of pay slips so you know they are able to pay.
- Ask for a guarantor who can pay up when your tenant can’t.
- Ensure you get a deposit – although deposits should be used for any damages, the Urban Leasing Law allows requesting an additional guarantee of two month’s rent so you may be able to keep this as compensation.
- Make sure you have good property insurance that covers you as a landlord. Some insurers cover non-payment of rent and the eviction process.
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