AS we have indicated in previous articles, one of the most attractive guarantees that a landlord or owner of a property can request and obtain from a tenant in Spain, is a solvent third party guarantor for a number of reasons;
- The personal guarantee, depending on how it is worded in the contract, may mean that the guarantor ranks jointly and severally alongside the main debtor (the tenant). Thus, if the guarantor is solvent, his guarantee is not limited to a specific amount, but to the total amount that the tenant may owe, for example unpaid rent or damages to the property, etc.
- Another reason why it is attractive to obtain a third party to act as guarantor in leasing contracts, is that there is no initial cost for the guarantor, the lessor nor for the lessee. Sometimes as an alternative, tenants are required to provide a possibly costly bank guarantee which may include leaving a deposit with the bank or they may be required to make a refundable deposit payment to the landlord of a number of months’ rent.
Such guarantees will result in a cost to the lessee or tenant, or the need to pay extra money, but when the risk is covered by a personal guarantor there will be no advance expenses or costs.
It is essential to obtain the advice of an expert Spanish lawyer when drafting the personal guarantee clause in the letting contract in order to ensure that the objective pursued by the parties is achieved.
Judicial Procedure for eviction following lack of payment
The judicial procedure in respect of eviction for non-payment has numerous peculiarities and requirements which are anticipated and covered in the Civil Procedure Law (LEC).
Although the general rule is that no other claim can be accumulated or added to the legal action for eviction and claim of amounts due, it is allowed to claim against the guarantors within the same eviction action for non-payment.
This is specifically indicated in article 437.4.3 of the LEC, which confirms that actions may be taken against personal guarantors, provided that they have been requested to make payment in advance of the action.
If therefore, you have to file a court claim for eviction due to non-payment against your tenants and also against the personal guarantors (if such has been included in your contract), do not forget to present the formal demand for payment to the guarantors prior to the filing of the claim.
Therefore, if you wish to receive expert legal advice on lease contracts in Spain, find out how to be sure of recovering costs when the tenant cannot pay the rent, the inclusion of personal guarantors in contracts and how to claim for eviction of lack of payment through the courts, contact us.
The information provided in this article is not intended to be legal advice, it simply transmits information related to legal issues.
Carlos Baos (Lawyer)
White & Baos
Tel: +34 966 426 185
White & Baos 2019- All Rights Reserved.