Larraín Nesbitt Lawyers is a Marbella-based independent law firm specialized in property conveyancing, taxation, litigation, probate and succession. Expert native English-speaking lawyers and economists blend legal and practical advice providing tailored assistance on your matter. Our range of services cover the greater Marbella area, Sotogrande and Costa del Sol.


The firm focuses advising foreign investors on acquiring residential property in Spain both from a legal and fiscal point of view. Our no-nonsense approach to business coupled with our commitment to clients ensures easy-going transactions. We pride ourselves in putting our clients’ interests at the forefront of everything we do.


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Tenant eviction in Spain

Raymundo Larraín Nesbitt, June, 29. 2021

Lawyer Raymundo Larraín walks us through a tenant eviction procedure.

Marbella-based Larraín Nesbitt Abogados (LNA) has over 18 years’ taxation & conveyancing experience at your service. We offer a wide range of 50 legal and corporate services. Our team of native English-speaking lawyers and economists have a long track record successfully assisting expats all over Spain.

You can review here our client’s testimonials.

Article copyrighted © 2021. Plagiarism will be criminally prosecuted.

 

 

 

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Lawyers
8th of July 2021

It doesn’t escape anyone that the ongoing Covid-19 pandemic has had adverse effects on us all. The virus - and its unending family of mutant strains - has wreaked havoc in the world’s economy exacerbating tenant’s financial woes. As a result of the ongoing onslaught, many tenants are finding themselves in dire straits and struggle to continue paying their rental.

However, every story has two sides to it. On the other side, you also have landlords, often with young families, who are also struggling themselves to stay afloat, many have been laid off from work, many have fallen sick, a majority of them rely on the monthly rental to repay the mortgage loan.

The bottom line is that the virus - like death - is a great equalizer and affects us all, both landlords and tenants. As a result of this we have seen a huge jump in client enquiries over the last year demanding our litigation services. In today’s article we are going to briefly gloss over on what a tenant eviction procedure entails in Spain, keeping it simple, cutting out the esoterics.

The non-paying tenant problem

Non-paying tenants have become a real problem for landlords who rent out their Spanish property, a problem which seems to have been aggravated by repeated government-imposed lockdowns that have caused companies to close and have increased unemployment levels, already at a record high.

While the first thought of a distressed landlord is to lock his tenant out, or shut off the utilities, this is considered illegal by the Spanish Authorities and may lead the landlord to face criminal charges for coercion or harassment, or both. A landlord can be remanded into custody on doing this.

If trying to reach an amicable settlement with a tenant fails, the only feasible option left to a landlord is to start an eviction process through a Spanish Court of Justice.

The loss of rental income during this period of time can leave landlords in a bad financial shape, and things may turn uglier if the rental is partly being used to service a mortgage loan: if the monthly payments are not met in time, the lender could even repossess the property. A horror story that many a landlord may be faced with.

What to do?

The first sign of warning is triggered when your tenant falls in arrears one, or more months. With no delay, the first step should be to instruct a Spanish lawyer who will serve legal notice by recorded delivery giving your tenant a reasonable deadline to pay the rental due (two weeks suffices).

Trying to reach an amicable agreement

We are still in the early stages where we are trying to reach an amicable agreement, as starting an eviction process through a Spanish court of justice should only be really used as a last resort. Eviction processes take long, and the tenant can remain (and will probably do so) in the property until the eviction order is issued.

Landlords, therefore, should note that reaching an amicable agreement is in the best of their interest, even though this may involve, in many cases, relinquishing a few months’ rent. Not many landlords are happy with doing this, but it should be noted that the debt is rarely recovered (tenants usually declare themselves bankrupt after an eviction process), and the longer the tenant remains in the property, the bigger the financial loss is going to be and more chances of them trashing your property.

Some unscrupulous tenants even request from the landlord an amount of money in order to vacate the property, which in our opinion is outrageous and tantamount to blackmail.

If reaching an amicable agreement fails, there’s no other option other than to instigate an eviction procedure through the courts.

Can’t I just lock them out or shut-off the utilities and force them out this way?

No. As written previously, your tenant can report you to the police and criminal charges will be filed against you with very serious consequences that may even land you in a Spanish jail.

This is not a recommended option.

The eviction process

If you have failed to reach an amicable settlement, you will have to hire a lawyer and initiate what is known as a ‘juicio de desahucio’, or simply put, an eviction process. The lawyer will have to wait in some cases a few months of unpaid rental before being able to file a lawsuit.

An eviction process requires both a solicitor and the assistance of a procurador (court agent), who acts as a conveyor belt between the lawyer in charge of the matter and the law court. On litigation matters it is compulsory to employ the services of a procurador. A lawyer will typically charge you a minimum of €1,500 in legal fees, plus a further €500  in procurador fees. Other costs involved are a locksmith to change the locks (circa 200 euros).

The lawsuit is filed by your lawyer in a court where your property is located.

The Debt

The priority of a landlord should be foremost to recover possession of the property and vacate the tenant, not to recover the arrears.

A landlord can withhold the compulsory one-month deposit on long term lets, but may additionally ask for other (additional) guarantees on top.

How can I rent out my property safely?

The widespread fear of landlords not being able to vacate swiftly their defaulting tenants is justified. This helps to explain why there is a huge pool of empty properties in Spain which would be let if only the laws were addressed by those who wield power. For the good of the rental market, and a disenfranchised youth, swift tenant eviction laws should be enacted and enforced by our Authorities. This would immediately unclog supply, releasing millions of properties into the open market, bringing down prices. The overprotectionism of (non-paying) tenants by our lawmakers causes tensions on supply as landlords remain fearful to rent driving prices up which further exacerbates and compounds the problem.

The rental sluggishness in Spain can largely be pinned down to landlords being afraid of renting out properties given how biased historically (tenancy) laws are in favour of (non-paying) tenants. This is the crux of the problem – fix it and you are halfway there to pave the way to a robust rental market. But this requires a kind of long-term commitment and backbone our politicians’ lack.

I’ll keep on dreaming.

In the meantime, the onus falls on landlords to avoid non-payment issues. That is why it is most advisable that on renting out property in Spain, landlords should put in motion a series of measures to screen prospective tenants and weed off unsuitable candidates pre-empting non-paying tenants. More on this in our article: Letting in Spain: The Safe Way – 10th of October 2012

Court ruling

Following the hearing, a judge will set a date for the tenant's eviction.

Eviction & lock change

Depending on whether the tenant remains inside, the bailiffs may need to request the support of armed police who will forcefully remove from the property any tenant that still remains inside.

The locksmith, who will have been patiently waiting all this time, will now proceed to change the locks and hand the keys over to the landlord, or his appointed representative.

This puts an end to many a landlord’s nightmare.

How long does an eviction procedure take from start to finish?

In Malaga, it’s taking 3 to 6 months.

See what our clients have to say about our tenant-eviction service:

We have collated our most recent testimonials on our litigation tenant-eviction service:

"Larraín Nesbitt Abogados has been extremely helpful I do not know what I could have done without Raymond and his team. They have been my continued support throughout this process and I have learnt so much from Raymond with the laws and regulation in Spain. Unfortunately, I was challenged with a very awkward, sneaky tenant who was in fact an estate agent, so be aware and do not even trust so called professionals living in your property in Spain. Raymond communications has been nothing but outstanding, he has always been there when I needed him, replies instantly and explain in terms that we can understand with no legal jargon. The tenant eviction was successful and although it was challenging at times it especially with the Covid situation. Raymond and his team have been an immense support. I could not recommend this firm enough, and to not only help with a non-paying tenant but for all other legal requirements even if it's just for information they are knowledgeable and they say it how it is. Thank you Raymond and the team! FA"

FA, England, United Kingdom. April 2021

"I have been faced with a difficult problem to solve concerning eviction of a tenant’s partner for non-payment of rent for over a year. It has been exacerbated by my not being able to visit Spain and have face-to-face meetings, nor to take care of my business for myself. I greatly appreciate the work which you have done for me in this matter, including introduction to a suitable representative to have a Power of Attorney in the matter. While it has been a long drawn out and expensive process, I much appreciate your clear advice and guidance with respect to the law in Spain, and in the successful conclusion of a court case and sentence for eviction which has now been completed. Thank you for your work for me. I look forward to continuing to using your services whenever I need them again."

Kelso Riddell, Scotland, United Kingdom. May 2021

I’m very happy with Lorrain Nesbitt Lawyers. I’ve worked with a few different lawyers in the south of Spain and Raymundo and his team outshone all with their ability to carve a path through the often obscure and slow mechanics of the legal system. A complex and protracted tenant eviction was resolved in a couple of months once Raymundo took on the case. An outstanding victory. Well done.

RD, England, United Kingdom. June 2021 

Do you have a tenant you need to evict from your property?

According to statistics, landlords take an average of 7 months to start an eviction process. Don’t wait any longer. Act now, call us! 

Please note this service is only available in Malaga region (Costa del Sol).

 

Imagine no possessions, I wonder if you can.” – John Lennon

John Winston Lennon (1940 – 1980).  Was an English singer, songwriter, musician, and peace activist who achieved worldwide fame as the founder, co-lead vocalist, and rhythm guitarist of the Beatles. His songwriting partnership with Paul McCartney remains the most successful in music history. As a dreamer, he imagined a better world, where we’d be as one.

 

Larraín Nesbitt Abogados, small on fees, big on service.

Larraín Nesbitt Lawyers is a law firm specialized in litigation, conveyancing, residency, inheritance, and taxation. You can contact us by e-mail at info@larrainnesbitt.com, by completing our contact form, or by telephone on (+34) 952 19 22 88.

Litigation services available from LNA

 

Litigation related articles

 

Article also published at Spanish Property Insight: Tenant eviction in Spain

Please note the information provided in this article is of general interest only and is not to be construed or intended as substitute for professional legal advice. This article may be posted freely in websites or other social media so long as the author is duly credited. Plagiarizing, whether in whole or in part, this article without crediting the author may result in criminal prosecution. VOV.

2.021 © Raymundo Larraín Nesbitt. All Rights Reserved.

 

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European Court of Justice’s lead council states Spanish Tax Form 720 fines are disproportionate

Raymundo Larraín Nesbitt, July, 21. 2021

Marbella-based Larraín Nesbitt Abogados (LNA) has over 18 years’ taxation & conveyancing experience at your service. We offer a wide range of 50 legal and corporate services. Our team of native English-speaking lawyers and economists have a long track record of successfully assisting expats all over Spain.

You can review here our client’s testimonials.

Article copyrighted © 2021. Plagiarism will be criminally prosecuted.

 

By Raymundo Larraín Nesbitt
Lawyer – abogado
16th of July 2021

Tax form 720, only mentioning it brings cold shivers to most taxpayers. It is single-handedly responsible for a mass exodus of thousands of expats since its inception and has acted as a firm deterrent of thousands more who refused to become tax residents in Spain to avoid it.

The disproportionate fines of this tax form had been challenged at Brussels and we were expecting a ruling on this matter last autumn, but I guess the emergence of the virus impacted on everything pushing it back.

The ECJ’s General Advocate, Mr. Henrik Saugmandsgaard, in a press release of yesterday concluded that Spain’s unfamous tax from 720 had implemented a system of disproportionate fines that go against the spirit of the Union.

Quoting the text: “M. Saugmandsgaard observe que ces amendes forfaitaires sont 15, 50 et 66 fois plus élevées que celles appliquées dans des situations internes.“ The fines are 15, 50, and 66 times higher than those applied in internal situations.

He continues: “Même  en  tenant  compte  de  la marge  d’appréciation dont  disposent  les États membres afin  d’établir  les  sanctions  appropriées, ces amendes  sont  tellement  élevées qu’elles paraissent disproportionnées, sans qu’il soit nécessaire de faire ici la distinction entre les différentes catégories de biens.“ Even if Member states have the power to modulate the appropriate fines, these fines are disproportionate without even needing to go into the different types of assets.

The gist of his report is that, as we had cared to point out repeatedly over the years, the fines levied by the Spanish Tax Office are completely disproportionate by rapport to other cases; they simply jump off the scale for no apparent reason.

He concludes: “L’avocat général propose donc à la Cour de déclarer que l’Espagne a manqué aux obligations qui lui incombent de garantir la liberté consacrée à l’article 63 TFUE (capitaux) ainsi que la liberté correspondante prévue  à  l’accord sur  l’EEE…“ The General Advocate proposes the ECJ to declare Spain in breach of the freedom of movement of capital enshrined in art. 63 of the TFEU. In other words, and in plain English, with this tax regulation Spain is breaching the core covenant of the foundational European treaty of Rome which sets out a series of freedoms as the guiding spirit of our Union.

What significance does his report hold?

None, all.

None, because it’s just a non-binding report. The report has only a purpose of guidance, but it is ultimately non-binding and not enforceable in any way.

All, because in 80% of the cases the ECJ follows the meticulous criteria laid out by its General Advocate. This is the first step of two required to overrule these lopsided penalties imposed by Spain.

The ECJ’s ruling

In a few months’ time (likely by the fall of ‘21) the ECJ will give it’s final ruling on tax form 720. In line with what we were long expecting, it will declare the overblown fines as null and void.

Conclusion

Kudos to our EU Overlords on this, they are right on track to rein in the Spanish Tax Office’s fiscal voracity.

Spain is the fifth country in the whole OECD (38 countries) with the highest fiscal pressure. Notable exceptions within Spain are the autonomous regions of Andalusia and Madrid (because of devolved competencies on tax matters).

If anything, Spain needs to urgently lower its taxes to become more competitive, attract foreign investments, and foster commercial activity on a large scale. Spain’s taxes are far too high as they stand right now. Also, I may add on a personal note, its bloated public sector needs to be trimmed down significantly to more manageable levels in line with fellow EU Member states.

 

L’art de l’imposition consiste à plumer l’oie pour obtenir le plus possible de plumes avec le moins possible de cris.” – Jean Baptiste Colbert.

French economist and Finance Minister under King Louis XIV.

Translated as: “The art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers with the smallest possible amount of hissing.”

At LNA we can assist you buying, selling or renting out your property in Spain. We have 18 years’ experience in conveyance & tax. We are also specialized in Immigration & Residency permits.

Larraín Nesbitt Abogados, small on fees, big on service.

Larraín Nesbitt Lawyers is a law firm specialized in taxation, inheritance, conveyancing, residency, and litigation. We will be very pleased to discuss your matter with you. You can contact us by e-mail at info@larrainnesbitt.com, by telephone on (+34) 952 19 22 88, or by completing our contact form to book an appointment.

Related services:

Tax form 720

Please note the information provided in this blog post is of general interest only and is not to be construed or intended as substitute for professional legal advice. This article may be posted freely in websites or other social media so long as the author is duly credited. Plagiarizing, whether in whole or in part, this article without crediting the author may result in criminal prosecution. VOV.

2021 © Raymundo Larraín Nesbitt. All Rights Reserved.

Blog post first published on SPI: European Court of Justice’s lead council states Spanish Tax Form 720 fines are disproportionate

 

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Marbella’s high-end market is booming!

IDEALISTA, July, 1. 2021

Idealista is Spain's leading online property portal, ranking number one. It was recently sold for over 1.3bn euros to EQT group.

It was founded in 2000 by three partners, brothers Mr. Jesús and Fernando Encinar, and by Mr. César Oteiza. It offers millions of properties for rental and sale in Portugal, Italy and Spain.

Following Nielsen audited ratings, it has over 144 million pages visited every month, 5 million unique users, 300 employees, and an annual turnover of over €40mn.

Idealista kindly published our article in exclusivity on their website in five languages, no less!: Marbella’s high-end market is booming!

English    French     German    Italian 

Polish     Portuguese   Romanian   Russian

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