According to most studies, death, divorce and changing homes are the three most stressful moments in a person’s life. In my opinion, however, renting property out should also be included, judging by the amount of queries, complaints and eviction legal instructions this office receives.

The email below was received from a client who had demanded payment of unpaid rentals on a townhouse and who was fobbed off, by his tenants, in a not very Queen’s English (they are vigorous East Londoners, in fact):

Hiya

As early emails we have NO Contract, you had time to come and see us when I told you of our intentions by email which you replied to,  you have the keys for the property from Monica, we have taken legal advice and been informed no contact has been signed no notary has been attended or no verbal agreement made with you,  as I said before we was all square financially.

The tenants had not paid and simply disappeared without any notice or warning, leaving the keys with the neighbour. The landlord was not expecting a with thanks bottle of champagne but neither breadcrumbs, eggshells, a stinky fridge, walls full of blue-tack and a filthy and defective gas barbecue (which nobody wants to touch), yet the fact that they were, I am told, a couple of alcoholics, helped temper the landlord’s rage, as he’d rather have them out owing money than in without paying (and without being able to rent out).

The lady, presumably after having guzzled a couple of gallons of wine, thought up a new law whereby not having a written contract meant that they were not liable for payment, that a notary was required to make a binding agreement or that no verbal agreement had been struck, in spite of them having paid two months deposit and one month of rent to a real estate agent. A very confused mind, indeed.

Non-payment is a big problem mostly because tenants seem to forget that their obligation of payment (in fact, the only one, other than maintaining the property as they received it) is not conditional upon the landlord doing anything: Spanish law does not allow renters to withhold the rent under any circumstance (other than destruction of the property). If they wish to make a claim, it has to be done separately from the main obligation of payment of the rent.

The string of excuses for not paying is endless, and enumerating all would be boring, so I have thought that the best advice I can provide is for both landlords and tenants to know what their respective rights are and what they can do about them (note that rights have a corresponding obligation, and vice versa).

Rights and obligations of a landlord:

• Right to get paid on time.
• Obligation to provide a property in a good and habitable condition for the use it is destined to, as well as in an optimal hygiene and safety standard.
• Obligation to maintain the property in a good state, carrying out the reparations that are required (maintenance, functionality and security), except for the normal wear and tear the property is likely to suffer with use.
• Obligation to not impede the unhindered use of the property by the tenant, except  in those cases where the property is in need of urgent repairs.

Rights and obligations of the tenant:

• Obligation to pay on time (this means no withholding of rentals).
• Obligation to keep the property in good condition, as was received.
• Right to demand from the landlord the necessary repairs to conserve the property in a habitable condition.
• Obligation to pay for small jobs that are necessary by normal use (wear and tear) of the property

A Note on Maintenance Works and Repairs

In respect of repairs, the following is to be noted:

• Conservation Repairs: The tenant will have the right to demand from the landlord the necessary repairs to conserve the property in a habitable condition for the use it was intended to, unless the damage to be repaired is attributable to the tenant, exclusively. If these repairs are to last more than 20 days, the tenant will have the right to reduce the rental, proportionally to the part of the property he/she cannot use. Small jobs that are necessary by normal use of the property are to be paid by the tenant (wear and tear). According to the Spanish Supreme Court, conservation or necessary repairs are those that are indispensable for the property to be kept in the use determined by the contract, referred to the time when the tenant took possession of the property, without this right being indefinitely extended in favour of the tenant. The tenant will have to notify the landlord, as soon as possible, of the need for any repairs (to keep the property in a habitable condition, as above), and allow the landlord direct verification, for this purpose exclusively, personally or by technical staff appointed for it, of the state of the property. Only where these repairs are necessary to avoid imminent damage or grave discomfort, will the tenant have the right to carry them out, and immediately demand payment to the landlord.

• Improvement Repairs: The tenant is obligated to accept improvement works that cannot be reasonably deferred until completion of the tenancy agreement. The landlord will have to give 3 months notice prior to his intention to start the works, after which time the tenant will have the right to cancel the contract, unless these are not essential. The tenant will have the right to a proportional reduction in the rental if he/she chooses to remain in the agreement. According to the Supreme Court, these are repairs that enhance comfort, convenience, luxury, recreation, embellishment or value of the property.

Renting property is always a high-risk business, especially when a landlord is unlucky enough to mistakenly end up giving access to a professional at not paying rent. But if this happens, wait no longer than a day after payment was due and get your lawyer to give notice of eviction.

Viewers of this post may initially be lost with the title of it, but will soon know what I am writing about. As we say in Spain, there is a lawyer and a doctor in each family, even if no member of it has finished high-school, given the abundance of advice you tend to get from some family members when you have abdominal pain or you are about to sign a rental agreement with a tenant.

In the Costa del Sol, and definitely in the rest of Costas, many foreign individuals seek advice for legal issues, but they use neither traditional legal advisers nor less formal legal sources. Instead, in the majority of cases (reportedly three quarters!) they obtain advice from family and friends, and from a broad range of non-legal professionals, including professionals working in many other fields who are known to the information seeker. They also have the habit of roaming through expat forums with the hope of getting the answer they wish to listen, and which rarely conforms to reality (unfortunately). Thus, there appears to be an informal network of non-legal practitioners who are routinely consulted by people with legal problems and who have created a parallel case law which is simply wrong.

You will know what I am writing about when you read some the beliefs spread in our Costas during years of pseudo-legalese innuendo, hearsay and gossip in bars and pubs, “chiringuitos”, Christmas Dos and other socializing events appropriately lubricated with abundant booze. Lets start with a few:

Spanish Wills & Inheritance

1. Die without a will and the Spanish Government will snap up everything: this is a classic I must have clarified at least 999 times. NO, Spanish law does not say this, it says that if you die without a will then you die intestate, in which case your personal national law applies, and only if no inheritors turn up will the Spanish Government ultimately claim ownership (someone has to!). As an example, according to Hubert Bocken and Walter de Bondt (Introduction to Belgian Law) most Belgian married people with children die intestate and therefore Belgian rules will apply, with usufruct rights passing to the heirs. This will happen too to any Spanish property or asset owned by a Belgian national because his/her law says so.
2. My English will is not valid in Spain: it is perfectly valid but it needs to be translated, legalized and the authorship confirmed by the Spanish Courts. Of course, it better include Spanish or worldwide assets because otherwise it has not relevance. The best option in this case is to obtain grant of probate by the Courts that can then be legalized and translated for its use in Spain.

Spanish Rental agreements

1. My tenant is not paying, I will change the locks: FORGET IT, you can end up in the gallows for this because it is trespassing.
2. My tenant is not paying; I will cancel the electricity and water supplies: CAREFUL, doing this is punishable under the Spanish Criminal Code as it is considered to be coercion and/or harassment.
3. My landlord has not made some repairs I have asked him to do so I am deducting the repair costs from the rent. NO, if you do this you can get evicted. Rent has to be paid every month, religiously, and if you want to ask him to carry out remedial work on the property you have to notify him formally. They are 2 separate issues and cannot be mixed up because the law has established this.
4. I have an 11 month contract which I am told is short term and so I will be able to kick the tenant out on expiration of the term: FALSE, all residential rental contracts can be challenged and extended up to 5 years, optional for the tenant and mandatory for the owner. A registration certificate with the local Town Hall will suffice to invoke this.
5. My contract is in German so it is not valid: A very common fallacy. Any document which can be translated by a registered or certified translator or interpreter is valid in a Court of law.

More to come on my next Post!

State in which our client's apartment was left by a defaulting tenant

Great expectation has been raised now that the new law on rental eviction procedure and a few other bits and pieces has been approved. Because what this new law intends to do is to help boot a defaulting tenant in a matter of days, or so it seems when you read it (it now talks about “days” as opposed to “months”). The reality however is that for all its good intents and purposes it is quite possible that landlords will still have to resort to switching off water and electricity supplies, calling in a couple of Liverpool heavies or hiring a failed guitarist to make nights unbearable by playing “Stairway to Heaven” outside the apartment for hours on end. The reason is that, even if the new law is clearly envisaged to speed up kicking out tenants, the stark reality is that Courts in Spain are so slow that it is difficult to see how switching procedures (to a quicker one) and reducing significantly the time to comply with an eviction notice (fifteen days) can succeed.

According to a report released by a Law Firm in Barcelona (Alboreca Abogados de Vivienda), after reading more than 2,000 Court rulings and interviewing a fraction of those poor landlords, the time to finally get a sentence to “launch” (as Spanish law calls it) your hated tenant averages six months and fourteen days. The problem is that you then need to execute this ruling so that eventually the police can effective throw the bastard out and this will take another three months and sixteen days so you are looking at an average of ten months in all…but then again it takes another eight months and five days to make up you mind to go to Court (getting in touch with lawyers, arranging meetings, paying them extortionate fees…) so after you add up it will almost take two years from when the monthly rental fails to show up on your bank account to when you can visit your “investment” property again. Not to mention of course that you should not expect a bottle of champagne with a with thanks note in the living room but quite the contrary: stolen fixture and fittings, destroyed furniture, missing kitchen utensils, dog crap all over the place and to get even more scatological (and not joking here), walls and curtains smothered in human fecal matter. So who the hell would want to rent with this prospect??

According to this report, 50,5% of defaulters are males and 35,7% females, the rest being companies. By nationalities, 74 out of 100 are Spaniards and the rest Brits, Germans and Romanians, by this order.

This same law firm has privately compiled a database with 6,000 Court rulings where “non-complying” tenants are named (unfortunately not publicly shamed) and so for a modest amount of money (7.50 Euros) one can know if we are dealing with the right guy. Obviously not all bad payers are registered, but if they happened to be registered and to avoid 7.50 Euros we incurred in thousands in losses, one would not be happy at all. This database should be also by checked by a lanlord who has a defaulting tenant, for a tenant which has had two court cases for the same reason can be prosecuted for criminal swindle, as opposed to a regular eviction case.

Fortunately enough, the law of averages says that finding a defaulting tenant is not always going to happen, and so it is quite possible that you will be able to have a beer or two with your tenant at some point during your commercial relationship with him/her because he/she has decided to do what all landlords are praying for, i.e., just pay the rent.

With the new law hopefully the almost twelve months from filing to firing will be reduced to, say, three or four months, we can only hope!

At last the Government has pre-approved a law proposal (PDF-Spanish) to encourage property owners to rent out their properties. Even though property sales have slowed down substantially, the property rental market is not increasing, and a staggering 2.8 million properties in Spain remain empty. 

The proposed changes will mainly target the excessive length of proceedings (which in some instances can take up to 12 months) to enforce an eviction process. Below is a summary of the main law changes to be approved in due course:

• Notice of payment prior to going to Court is reduced from 2 months to 1.
• The Court proceedings are now conducted via an equivalent to a small claims court procedure and are therefore a ruling can be reached in a couple of months (depending on the specific Court).
• The Court ruling will now be enough to evict a tenant and will be enforced within 30 days, without having to execute the ruling (whereas before the ruling was not automatically enforceable as the landlord had to instigate this action). If the tenant cannot be found the ruling will be notified in the notice board which each Court has and will proceed to send the bailiffs.
• Landlords will be able to demand return of the property if they need it not only for their own use but for that of parents and children. This clause will have to be inserted into the contract in order to be enforceable.

It will be interesting to see how these measures, in addition to others, bring dynamism to an otherwise stagnant market and, more importantly, if the court system will be able to cope with the expectations these changes will introduce.