How to deal with rental arrears
Rentals are sensitive to the general economic situation, and in times of abundance cases of unpaid rent are rare. However, in times of crisis many tenants start to have problems and late or non-payment occurs more frequently. Currently, it’s not unusual that landlords can find themselves faced with these problems.
Based on our extensive experience in such cases, we at Manilva Solicitors would advise a landlord to firstly to speak to the tenant directly in order to find out if it’s simply a late payment or if it’s a more serious continuing problem that could be repeated or even get worse. It is important to determine the reason for the late or non-payment so that the appropriate action can be taken. The following situations are likely:
–Isolated cases of default in payment which is due to a temporary lack of liquidity.
–Repeated cases of non-payment When the default is frequently repeated, or two months rental payments are overdue and it seems unlikely that the tenant will be able to catch up with the accumulating debt or it looks like the situation will get worse.
Once this situation arises, we advise that the landlord should consult a Lawyer to expedite both the collection of the overdue rent and if necessary to evict the tenants. The Landlord can then formally claim any overdue rental payments and terminate the lease so that the debtors are obliged to vacate the property.
Formally Claim Overdue Rental Payments
We can save you unnecessary expenses during this process, firstly, by issuing an Eviction Order which would mean that the tenant could not settle any debts before the court case. This is beneficial, as it is a great time saver, because without the Eviction Order the landlord would have to accept mandatory payment and the tenant would be able to remain in the property. The landlord would then risk the possibility that the tenant could not catch up with the rental payments again and the whole process would have to be repeated, which would involve more time and legal costs.
Secondly, when a Formal Claim is made to the courts, the tenant would be liable to pay the court costs even if the tenant admits the claim is justified.
Terminate the Lease
To achieve this, the landlord should send a Burofax to the tenant demanding payment of the overdue rent within 30 days of its receipt, with a warning informing the tenant that legal proceedings will be initiated if full payment is not received within the stated period. If after the 30 day period no payment has been made the landlord can apply for an Eviction Order by providing the courts with the following documents:-
–Property Title Deed or a “Nota Simple”, (A document issued by the Local Property Registry Office), to certify ownership.
– The Rental Contract
– A copy of the Burofax
Once the court accepts the above documents they will notify the tenant, who would then have 10 days in which to reply. From the moment of the notification the tenant cannot pay the debt and can only do one of the following things:-
- Ignore the notification –In which case the court proceedings would continue in their absence
- Accept the eviction in exchange for a reduction or the cancellation of the debt
- Appeal
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When the Landlord has won the case and the judge declares that the landlord has the right to receive payment of the unpaid rent and the cancelation of the contract, eviction is not automatic. In the case where a tenant refuses to vacate the property, the Landlord would have to place a second suit with the courts to order the abandonment of the property due to non- payment of rent. Once this has been approved by the court they will set a date and time for the eviction. A court appointed counsel together with a court official will witness the eviction, with a locksmith and the police if necessary. ONLY ONCE THIS HAS BEEN DONE CAN THE LANDLORD RECUPERATE THE POSSESSION OF THE PROPERTY.
We at Manilva Solicitors recommend that you arrange an appointment with one of our experts on procedural civil law in order to obtain personalized legal advice for your particular case. Please contact us to arrange a free, no obligation appointment to discuss the above or any other legal matter please contact us.
Carlos Ramallo
