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Posts Tagged ‘landlord insurance spain’

New Express Eviction Law: Much Ado About Nothing

July 13th, 2009

lb-express-eviction-spain-tenants1Within the next months we are going to be bombarded with articles spinning the Government’s eagerly anticipated new Express Eviction Law (http://www NULL.senado NULL.es/legis9/publicaciones/html/textos/A_032-01 NULL.html) which has yet to be pre-approved by the Senate (http://belegal NULL.com/blog-by-antonio-flores/spanish-express-eviction-law-pre-approved/) before it is returned to the Congress of Deputies for its final enactment and publication in Spain’s Official Law Gazette.

This new law aims primarily to tackle cases of non-paying tenants which overstay in let properties, to the astonishment and despair of landlords.

But will it really help out? In short, no.

The proposed measures implemented by this law can be easily challenged or overcome by tenants. Besides the new measures will not shorten the eviction procedure significantly as sought as it hinges on the courts not being clogged, as they always happen to be. The shortcomings of the proposed measures are self evident.

The core of this proposal is the much vaunted 2 weeks waiting time, dubbed express eviction, as from the time there is a ruling evicting the tenant. But there’s a catch; the trick is that the said ruling can easily take 6 months on average dependent on the courts’ agility, so the tally would really be 6 months plus the 2 weeks. So yes, there is some reduction in the timescales involved to evict non-paying tenants, albeit not groundbreaking enough to open a champagne bottle as we are being led to believe. This half-baked attempt to redress matters will at best save only a couple of months. Landlords will still have to wait months to recover the possession of their let properties.

This is a classic example of passing new laws to satisfy the broad public (read electorate) at large which at the end of the day may only complicates matters further without really tackling pressing issues and even leaving the door ajar to potentially adding new problems. At best we can label it as a half-hearted attempt to address the situation.

At a time when many ex-pat landlords are already struggling with their mortgage loans (http://belegal NULL.com/blog-by-antonio-flores/cannot-keep-up-repayments-on-your-spanish-mortgage-not-all-is-lost/), as they relied on the let’s income to offset it against the mortgage repayments, the last thing they needed was the aggravation of withstanding non-paying tenants (http://www NULL.marbella-lawyers NULL.com/articles/showArticle/spain-tenant-not-paying-rent-spanish-property). This situation has lead many landlords to default on their mortgage loans which in turn have lead to a soar in repossession procedures. (http://www NULL.marbella-lawyers NULL.com/articles/showArticle/home-repossessions-in-spain-defaulting-on-mortgage)

A golden opportunity has been missed –again- by the legislator to address Spanish Tenancy laws that are heavily biased, for historical reasons, in favour of tenants. These laws need to be urgently and decisively adapted to modern social reality. When this is done, here’s wishful thinking, letting will become a serious alternative to purchasing properties allowing the Spanish rental market to pick up from the ground as in the rest of Europe.

In the meantime we will regrettably have to continue waiting until a law is passed that will boldly challenge this unfair situation once and for all allowing for express evictions instead of politically ill-conceived piecemeal attempts aimed to satisfy everyone.

Litigation, Property , , , , , ,

Landlords Afraid of non-Paying Tenants Take Pre-Emptive Measures

September 16th, 2008

As read on the Sur newspaper (http://www NULL.diariosur NULL.es/20080914/malaga/propietarios-pisos-alquiler-blindan-20080914 NULL.html), more than 9,000 landlords have adopted in their tenancy contracts the Arbitrage System which allows eviction associated costs to be cut down significantly. Malaga is the Andalousian province in which this practice has been most successful. More than 8.980 Tenancy Agreements uphold the arbitrage system should one of the parties breach the contract i.e. non-payment.

This system was created back in 2004 and allows to significantly reduce both the associated expenses as well as the necessary eviction time compared to a normal court procedure (which normally averages at least 10 months). However, this system only works if both parties, tenant and landlord, abide the mandatory Arbitral Award something which does not always happen as non-paying tenants may only buying time with no real intention of paying the arrears.

The Arbitral Court guarantees that the case will be examined within 30 days, often even less. The main advantage would be the swiftness in which the arbitral award is obtained. This is particular important in cases in which the landlord offsets the rent against his mortgage repayments.

To apply for it is only necessary to request it in one of the 120 real estate agencies of Malaga province which are homologated by the Arbitral Court or simply including it as a clause in the Tenancy agreement waiving the ordinary court procedure. It only costs 42 Euros plus a further 300 Euros in case of a protracted conflict. A normal court procedure would have an average cost of at least 2.300 Euros. The second advantage would be the considerable amount of money it saves the landlord.

Another option available to the Landlord is to hire a Rental Insurance which cover the event of the tenant defaulting until he is effectively vacated from the property. These insurance companies will request the tenants’ payslips to ascertain their financial ability.

More information on the subject can be found on our article Landlord: Keys to Successful Rental Income (http://www NULL.marbella-lawyers NULL.com/articles/showArticle/income-lease-rental-insurance-spain)

Property , ,