What to do when a tenant does not pay

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According to the latest estimates, four out of ten Spaniards prefer to live in rented accommodation rather than become homeowners and taking out a mortgage. This preference opens up a market for homeowners who decide to rent out their property to third parties, but owners might be nervous about doing this. The most important fear is that the tenant will not pay the rent.

In fact, according to the latest data compiled by the General Council of the Judiciary, there are currently more evictions due to non-payment of rent than foreclosures. This is particularly noteworthy if we take into account that only 17.5% of homes are rented, compared to more than 77% that are owned, either with or without outstanding payments.

From a social point of view, there have been many reports on what, in journalistic terminology, has been called “express evictions” and the drama for the families who have found themselves in this situation.

However, little has been said about the significant damage caused by the tenant not paying the landlord, not only because it implies the loss of his legitimate investment, but also because on many occasions the amount obtained from the rent is used by the landlord to pay his own mortgage, support his family, etc.

So the question is, what can the tenant of a property do when the tenant does not pay?

The most sensible thing to do is to assess the situation and answer some questions: what is the reason why the tenant isn’t paying? Is the tenant insolvent and without guarantors or, on the contrary, is he solvent and have guarantors?

It is not the same if the tenant is behind with one month’s rent when he/she has always fulfilled his obligation to pay than if he has not paid since the first month’s rent. Nor is it the same if the non-payment is due to a mere occasional complication in the tenant’s liquidity and a situation in which the tenant is a professional defaulter.

The solution for the landlord will depend on an assessment of the situation. A solution that ranges from mere negotiation with the tenant, agreeing on collection and whether or not the tenant will remain in the property, to the use of arbitration if both parties have decided by contract to resolve their disputes in this way, or the use of legal proceedings.

In our opinion, if the tenant is insolvent or has no guarantors, it seems that the best solution will be to opt for the amicable route with the aim of getting the tenant to leave the property as soon as possible, causing the least financial damage possible.

On the other hand, if the tenant is solvent or if there are guarantors, we should resort to legal action to guarantee collection of the amounts owed plus interest within an estimated period of one or one and a half years.

The judicial process involves filing an eviction lawsuit, which is nothing more than asking the judge to declare the contract terminated due to the tenant’s non-compliance. This must also include the claim for the unpaid amounts.

However, in order to obtain the expected success, it is necessary to know in depth the ins and outs of the Urban Lease Law (LAU) since taking into account simple aspects such as the reliable claim of amounts through burofax, notarial claim, certified telegram, etc, can mean saving money, time and new non-payments for the landlord.

As specialists in property law, at Bufete Salmerón we offer to study and evaluate your case in depth, offering you a response according to your situation and without any obligation within 24 hours. If you need us to advise you, you can find us at 954 536 038

Image by Hyena Reality (Freedigitalphotos)


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