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my tenant is not paying what to do

My Tenant Isn’t Paying Rent, What To Do? (Spain 2022)

It’s been months. You’ve have stopped receiving the rental payments but now your tenant is not even picking up the phone. What to do if your tenant isn’t paying rent?

You fantasize about going over there and confronting him, changing the locks and having a screaming match in the middle of the street. These kind of situations can be quite unpleasant for everybody involved.

In this post, we will take you through everything you should do (and what you should definitely NOT do), if your Spanish tenant, is not paying.

This Post At A Glimpse

Talk to your tenant, find out what the problem is

Don't jump to conclusions

If your tenant suddenly isn’t paying, don’t immediately jump to conclusions. Don’t bring out the big guns yet. There might be a variety of reasons why your tenant is not paying. Many of these situations have been solved by good communication, and it’s not always necessary to take further steps.

What's the story?

What is your tenant’s history? If he/she has always paid on time, there might be a perfectly plausible reason behind the lack of payment.
Talk to your tenant. They might have financial difficulties. Be respectful but firm. Let them know that simply not paying is not an option, but that you’re more than happy to help, and work out some kind of payment plan until their head is above water.

No answer? Time to lawyer up

If on the other hand your tenant is not responding and ignoring your communication attempts, it might be time to move past the talking period and start the legal process. And this stage many owners get nervous and try to take matters into their own hands. This could be a crucial mistake since in Spain you will be held accountable for your actions.

What not to do

Your tenant is ignoring your calls, or flat-out telling you that they have no intention of paying whatsoever. They now occupy your property and will not move. The only way to get them out is by court order and a police escort.

At this point, many owners tend to get creative. They change the locks, turn of the utilities or try to “scare” the tenants by other means.

In Spain, this is highly illegal and considered coercion. Forcing your tenant to vacate the premises without a court order is punishable by law. By signing the lease contract, your tenant has established his legal home at your property. This means that legally he’s attached to the property and may only be removed by the direct order of a judge.

All of this might sound counterintuitive for the owners, but it is quite typical in Spain for an owner to be sued by his tenant if he fails to respect the tenant’s housing rights.

Starting legal action, the proper steps

So your tenant is not paying, and you can definitely not take matters into your own hands. You’ll have to do things the legal way, through the judiciary system. Yes, this means filing a lawsuit.

  • Before you submit your legal claim, you will need proof that your tenant has stopped paying. In Spain, this can be done in several ways. You might send a Burofax, a Telegram (with acknowledgment of receipt) or a notarial requirement. The most common is the burofax. You can send it just a few days after the tenant has stopped paying. In the document, you’ll ask your tenant to resume payments, and you will notify him with a date at which you’ll submit your claim to the courts.
  • Once the date specified in the burofax has passed, you will submit your claim to the courts. For this, in Spain, you will need a lawyer and a procurator (the procurator will be in charge of the documentation, representation in front of the court and enforcement of the judicial resolution).  
  • You may file the claim in three ways. A demand for due payments, a request for eviction or a demand asking for both these things.
  • The documents you will need to file this lawsuit are: A copy of the property deed, the original rental lease, the proof that your tenant has stopped paying (burofax) & power of attorney enabling your lawyer and procurator to represent you in court.
  • Once the lawsuit has been submitted and processed, the tenant will get a notice from the court. In the notice they will be informed about the lawsuit, the date for the trial and the date for the eviction. Unless the tenant challenges the lawsuit, the trial will never happen and the court will proceed directly to the eviction. It is extremely rare for a tenant to challenge this type of lawsuits in Spain.
 
If you need a lawyer we’d happily recommend a legal team which has a lot of experience with these type of situations.
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The Court Resolution

Once the court has issued a favorable resolution, the eviction process starts.

The eviction process might happen without using force if the tenant surrenders the keys voluntarily. If the tenant refuses to leave the property force will become necessary. In this case, the procurator will see the eviction through, accompanied by the local police.

During the eviction process, a record of the state of the property will be made by the judicial commission. This is very important in case the tenant has destroyed anything. Only with this legal record will the owner be able to ask for a reimbursement.

The costs

How much can you expext to pay if your tenant isn’t paying rent?

Wages differ greatly with the professionals you might need for this process, the final cost will depend on each case. But the approximate total figure should be anything in between € 800 and €1400. Let’s break it down:

  • Lawyer. In this type of process, you will need his intervention. His wage will be around € 600.
  • Procurator: He will be in charge of presenting any documentation to the court. He will also be the one enforcing the court resolution. His cost is around € 300.
  • Power of Attorney: This is a document, that will grant the procurator legal permission to represent you in court. The cost is around € 40.
  • Locksmith: He will only be necessary if the tenant has failed to return the keys or has exchanged the locks. Approximately € 100.
  • Court Fees: They only apply if the owner is a corporation. Normally around € 200.
 
This breakdown doesn’t include any damage, which the tenant may have done to your property. Be sure to properly insure your property before renting it out. A great company, we love to work with, for insurance is AXA.

How the tenant might respond

Once the tenant receives the court’s resolution he might respond in several ways:

  •  Stay in the property without resuming payments: In this case, once the eviction date arrives, the procurator (accompanied by the police if necessary) will physically go to the property and escort the tenant off the premises.
  • Pay the debt and vacate the property: This of course is the best scenario, which every owner hopes for.
  • Pay the debt and remain in the property: This in Spain is called “Enervar la accion de desahucio”. With this action, the tenant basically cancels the court eviction notice and may remain in the property. The tenant will not always have this option, it depends on each case and should be discussed with your lawyer.
  • Vacate the property without paying the debt: In this case, the eviction process will be considered finalized, but the process will continue in regards to the debt collection.
  • The tenant opposes the lawsuit resolution: If this happens, the tenant and owner will have a trial at the date stipulated in the court resolution.

How long the entire process lasts

Spanish law tries to make this process as fast as possible. But as in many other countries, the courts are overloaded with work. That being said, this process has been accelerated greatly over the past few years. Not so long ago you probably would have had to wait around for two years before you got any court resolution.

Nowadays the entire process, starting at the date you file your lawsuit, lasts around five to six months (*this might vary after Covid-19)

Will you ever get paid?

Once the court resolution has been issued, the owner will have a five year period in which he may claim the money that is owed to him.

This means that if the tenant doesn’t proceed to pay the outstanding debt, the owner will be able to freeze his assets, accounts, and salaries until complete reimbursement has occurred.

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Better safe than sorry

At Property Management Barcelona we prefer to reduce the risk of a non-paying tenant to a minimum. This makes the screening process, while choosing your next tenant, incredibly important. Before renting out your property be sure about your future tenant’s solvency. Ask him to forward you his work contract and last couple of pay-checks. This is considered standard practice in Spain.

Other helpful measures are:

  • Deposit: A one month deposit is the legal norm in Spain.
  • Complementary guarantees: According to the latest amendment made to the Spanish rental law (Post “New rules for renting property in Spain”) you can legally ask for two more rental months as a complementary guarantee. 
  • Private guarantee: In Spain, it is common practice to ask another person to co-sign the rental lease on behalf of the tenant. This person will be liable in case the tenant is unable to pay.
  • Insurance: You can get insured against non-payment and even for court expenditures. We recommend looking into it, with your Spanish Bank or Insurance company.

What's next?

This type of situation can be extremely annoying at best. Handling the stress of a non-paying tenant is not easy, especially if your property is located in a foreign country.

At Property Management Barcelona, we hope to have clarified your doubts, while presenting you with a proper way to move forward.

As always, if you have any questions or would like us to add anything, leave us a comment or just shoot us a mail.

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